Sunday, June 8, 2008

Show me the money!

During the Turkish GP’s Pre-race show… (Ever heard of those, FOX?) Peter Winsor did an interesting bit about the potential costs of running an F1 team in today’s business climate, while noting how Emperor Bernardo was overly keen to remain “Monosyllabic towards ANY hard numbers…

Yet Winsor ascertains that the average per season price of admission will set you back $200 million… With Bob Varsha commenting during the Canadian GP that the top F1 teams such as Toyota and most likely all of the major auto manufacturers are spending somewhere in the region of $700-800 million per season!

Although the FIA doles out $50m to each team in the form of travel expenses and “Prize” money, with a further $40m being accumulated by all Constructors VIP operations… The various teams are still left seeking to secure approximately half of their working budgets from sponsors… And this does NOT include all of the various other sundry businesses involved, i.e.; Oil Companies, lubricants, tyres, parts specialists, etc. which will potentially chip in to the teams budgets.

Yet, lets consider the costs of building a current racing circuit, as the latest to join the fray is the ultra modern, sheik Istanbul Autodrome, at a cost of $250m. And if we take a look at the latest four “Super” circuits: Abu Dhabi; Bahrain; Malaysia and Singapore, the cost EXEEDS $1 Billion! While ALL of today’s Modern circuits MUST be designed by Herman Tilke, who’s quite lavish over his pit lane complexes, amongst overall venue layout amenities.

And just what does the first three figures pertain to?

Team Budget; $200m
(Average for all ten teams currently competing)
This cost includes: Team personnel, Engines, R & D and Logistics

FIA; $50m
This cost includes: TV Rights, Circuit appearance fees and F1 Endorsements

Team VIP’s; $40m
This cost includes: Admittance into the very exclusive team Paddock Club which sees an average of 70 attendees per event. (Avg. price = $3,000 per attendee)

Overall, Formula 1 is a $2+ Billion per year industry…

Budget capping Italian style
While there are rumours speculating about a new Budget capping system being proposed in Formula 1, which would see the FIA impose a three year cap reduction, beginning at $150m Euros next year, it wouldn’t include Driver and Team Bosses salaries, nor Engines or Marketing costs.
Which ties in nicely with the figures thrown around by the House of Winsor during his Pre-race monologue at Istanbul… Yet, once again leave it to Ferrari to try upsetting the Apple Cart as they may have as much as a $100 million head start