FORUMula1.com - F1 Forum

[darwin dali]

Some interesting money data presented by NBCSN today:

Caterham and Marussia don't make sense though...

[myownalias]

No wonder the smaller teams falter when you look at the cost of modern F1, $120m when the newbies were lured into a $45m formula that never materialized.

It's interesting how McLaren, a team in decline during 2013/14 managed to turn the biggest profit in 2013, despite JB's $15m salary!

[racechick]

Woah look how much money Ferrari get!! And spend! Red bull not far off. McLaren do best on budgeting then. Now they need to start winning again . And Merc are in the red! But .they got prize money coming

[CookinFlat6]

Income doesnt mean sales, it includes funding from a parent or from shareholders, so those numbers are pretty much meaningless as a comparison or a scale as the compilers will be guessing because apart from Williams they are all private concerns.

We do know that every F1 team will spend its income on its budget, the only reason they have income is to spend as their budget

Otherwise we would need to define each of those entries, not as an F1 team, but as a business, which would be very hard to do because of the arrangements each has. RBR for example gets income from 2 seperate Red Bull companies.

Anyone who really thinks Merc spent the same as McLaren, or somehow has a loss in its bank accounts would be approaching the figures too seriously

Lets say the income numbers were estimated from FOM payout, then the 'profit' implication is that they didnt spend all their FOM income whereas Merc did - so again that would be a vastly distorted picture

[What's Burning?]

No wonder the smaller teams falter when you look at the cost of modern F1, $120m when the newbies were lured into a $45m formula that never materialized.

It's interesting how McLaren, a team in decline during 2013/14 managed to turn the biggest profit in 2013, despite JB's $15m salary!

They sell a lot of swag, which goes a long way. The only reason they made a profit is because they've run leaner than Ferrari and Red Bull. A lot of interesting points points to be had in the list though. The one real meaningful number is the operating budget for the teams, and it's very telling.

1) it's obscene what Ferrari and Red Bull spend compared to the competition, and it's obscenely obscene that Ferrari are spending that much and have gotten squat for their expenditure. At least RBR has four double championships out of it. If you took out the 90 million they get for being Ferrari the numbers would be scary.

2) From a business model standpoint the smaller your budget the more efficiently you've got to run your team. Obviously Mercedes and McLaren are doing very well with the balance of the budget.

3) no way in hell an independent Ferrari would be allowed to spend that much on an F1 team. No board would tolerate that expense with the abysmal results they've shown. For Ferrari (as we know it) to survive I think it would have to be privately, Rich Arabs, or the Italian government or something but there's no way that a board would allow 20% of the annual corporate earnings to be spent on running the F1 team.

4) there are certainly intangibles here that you can't easily factor, Especially for Ferrari, McLaren and Mercedes as they get a certain amount of cache for the brand by competing and winning. You couldn't buy advertising for a global audience of half a billion people for the price Mercedes "spent" for the year and the increase in sales has to be very palpable for them, especially with the season they're having this year.

5) F1 is a business first and foremost, lest we not forget that!

[racechick]

That money that Ferrari get given just for being Ferrari is more than Marussias whole budget . If they'd been kind and let it be shared between Caterham and Marussia , even just for one year, maybe those teams would have survived.

[CookinFlat6]

We know what will happen to Ferrari, they will have to spend what they got paid by the FOM the year before + an increasingly reduced amount as the company weighs up the benefits of spending more for less in F1 vs using the money to target consumers in China and Korea.

The irony is that someone will say, 'hey 70% of the road cars and merchandise sales are pumped into F1 as advertising and marketing, but we are not winning, so theres no connection, so lets not spend the money'

[What's Burning?]

Actually another thing to note is how committed to the sport and how committed to winning Red Bull really are. They are in it purely for the sport, it's not like F1 is helping them sell a half billion dollars more a year in cans of Red Bull.

[darwin dali]

Actually another thing to note is how committed to the sport and how committed to winning Red Bull really are. They are in it purely for the sport, it's not like F1 is helping them sell a half billion dollars more a year in cans of Red Bull.

You never know...

[Jabberwocky]

If caterham and murussia are running without a loss how have they gone bust?

[darwin dali]

If caterham and murussia are running without a loss how have they gone bust?

That's what I meant with:

Caterham and Marussia don't make sense though...

[racechick]

Perhaps the list's a bit old? And they've suddenly spent a lot?

[Ferrari man 009]

Perhaps the list's a bit old? And they've suddenly spent a lot?

That was 2013's list, and doesnt include the £25m extra expenditure on the new turbo's for this year, which probably finished both teams off.

[sagi58]

... £25m extra expenditure on the new turbo's for this year, which probably finished both teams off.

So... the teams spent all that extra money on new turbo's which, for all intents and purposes were frozen as far as development goes.
IF there had been some relaxing of the rules, it would have cost more to continue development, I get that; but, that also would mean that there was a possibility of more competition.

Without that possibility, how it could possibly have ended any other way?

To bring it down to a personal level, that's like buying a new house/apartment and not expecting to spend any more money on it to make it a home.

[racechick]

Thing is, Merc would have developed too, and recent history suggests they're rather better at it than the other two, particularly Ferrari. And so we would have had spiralling costs and teams going bust.