Ferrari is set to recieve the largest chunk of Formula 1 revenue share despite only finishing 3rd in the constructors championship. F1 follows a very complexed revenue share model and we take in-depth look at how FOM’s 2017 revenues estimated at $1.38bn is distributed among teams and other shareholders.
Ever wondered what financial rewards Formula 1 teams and drivers get for winning races and constructors championship ? well there is a massive profit distribution model in placed by CVC (parent company of Formula 1 group). Formula 1 is one of the most lucrative sporting event in the world and revenue from 1 race can be anywhere in the region of $100 million to $140 million on average while total profit of Formula 1 has been growing in the last decade year after year. In 2014 total profit was around $1.8 billion. But where does the money goes ? we have covered a in depth analysis of Formula One’s revenue generation and distribution
So the total profit is distributed among teams (through prize money fund) and Formula One group. One thing you to remember is that Drivers dont get any prize money regardless of performance because Formula 1 drivers are paid salaries & bonuses by the teams they driver for. So Formula 1 profit distribution is a complex system and we will try to explain in detail.
Where do the Formula 1 Money Goes:
Last year Formula 1 made profit of around $1800 million which is that divided into two categories (50% each) so one half goes to Formula 1 teams (Prize money fund) and the other half goes to formula 1 group and shareholders.
The prize money fund: is further divided into several parts. (Column 1 payment = 23.7% divided equally among top 10 teams while Column 2 payment 23.7% is divided according to how teams finish in constructor championship). 2.5% goes to Ferrari who has a special contract with Formula one.
Things To remember:
- Only top 10 teams get the column 1 and column 2 payments.
- Column 1 payments are shared equally among top 10 teams in last three seasons.
- Column 2 payments is distributed among top 10 teams how they finish in the current constructors championship.
- Teams finishing outside top 10 get a column 3 payment around $10 million just for being part of Formula 1
- All 11 teams get transportation cost from Formula 1.
Here is an diagrame which shows how the money is distributed among teams and the stake holders (CVC & other shareholders)
So now you know how the prize money (or in other words compensation) to F1 teams works we take a look at 2016 Formula 1 Prize money table. Mercedez won the constructors championship title and earned around $148.5 million while Ferrari takes home massive $208 million largely down to historic payments.
|1||MERCEDES||$42m||$76.5m||$30m (Historical payment)||$148.5m|
|2||FERRARI||$42m||$56m||$90m (Ferrari payment) + $20m (bonus fund)||$208m|
|3||WILLIAMS||$42m||$45.5m||$30m (Historical payment)||$117.5m|
|4||RED BULL||$42m||$38.5m||$60m (Bonus Fund)||$140.5m|
|9||MCLAREN||$42m||$17.5m||$34m (Bonus Fund)||$93.5m|