how formula one and f1 teams one generate profits

[nic08]

hi guys how f1 teams and formula one have profits?

[Tim.Wright]

Not even the teams themselves know how to do this...

[alexx_88]

They spend less than they earn . Joking aside, profits probably did exist a few decades ago. Now, with the big car manufacturers in place, spending has gone through the roof, as they can basically afford to run at a slight loss, as long as the marketing value exceeds the losses of running the team.

As a simple example, Williams F1 gets little marketing value from running in F1, compared to, let's say Mercedes or Red Bull. That means that there is little action F1 viewers can take, outisde watching F1, that will benefit Williams, as they don't sell any services or products to the general public. So their team needs to run on what they earn directly through sponsorship and prize money. On the other hand, take Mercedes or Red Bull. For every time their brand gets TV time in F1, there is supposedly a positive effect on the sales of their products. As such, those types of F1 teams can be run at a slight deficit, as long as the financial benefits of the holding company outweigh that loss.

That's why there will never be financial parity between teams, no matter how you split the income. There are some who can afford to run at a loss and some that can't.

[SiLo]

Pretty sure they were spending a lot more in the past, especially the likes of Toyota and Ferrari back then.

I think a lot of their money comes from Sponsorship and prize money, as well as money from TV coverage and selling of team merchandise and other things.

[nic08]

Pretty sure they were spending a lot more in the past, especially the likes of Toyota and Ferrari back then.

I think a lot of their money comes from Sponsorship and prize money, as well as money from TV coverage and selling of team merchandise and other things.

so how much the prize money of formula one? is it really good business?

[hollus]

Seriously, google. It shows up in nauseating detail in a link of the first page suggested by google (which might or might not be the first one when you google, but should be near the top).

[Gaz.]

Pretty sure they were spending a lot more in the past, especially the likes of Toyota and Ferrari back then.

I think a lot of their money comes from Sponsorship and prize money, as well as money from TV coverage and selling of team merchandise and other things.

so how much the prize money of formula one? is it really good business?

From Joe Saward's blog:



https://joesaward.wordpress.com/2014/11 ... sentences/

Obviously the team names change each year but that's the gist of it.

[Just_a_fan]

It's possible that they don't make much, if any profit:

Mercedes has revealed making a loss of almost £77million in the 2014 Formula 1 season it dominated on track to win both the drivers' and constructors' championships.

Mercedes-Benz Grand Prix Ltd, the company name of the Mercedes F1 team, has released its financial accounts up to the end of 2014.

On track, Mercedes achieved what the report - signed off by motorsport boss Toto Wolff - describes as "unprecedented success".

In clinching the constructors' championship, and with Lewis Hamilton winning the drivers' crown, Mercedes scored a record 16 grand prix wins, along with 15 other podiums, that included a record-breaking 11 one-twos.

This high level of accomplishment that "exceeded expectations" triggered numerous staff bonuses, and in conjunction with the introduction of the new 1.6-litre V6 turbo-charged hybrid power units, resulted in the £76.9m loss, a rise of £25.8m compared to 2013.

Explaining the increased deficit, the report states "operating costs rose by £49.5m [£190.7m in 2013 to £240.2m in 2014] due to significantly higher performance bonuses payable as a consequence of the record-breaking level of sporting performance, and also increased costs arising from regulation change".

Another significant impact was a rise in wages from £49.7m in 2013 to £65.2m last year, however, the report claims the overall loss was "within the pre-defined parameters set by the shareholders".

That is despite the fact turnover rose by £21.7m [£125.2m in 2013 to £146.9m in 2014] courtesy of "higher sponsorship revenue and increased income from the Commercial Rights Holder flowing from improved on-track performance in 2013"

From autosport