Ferrari, Mercedes and Red Bull will receive the most money from Formula One Management this year when close to a billion dollars is disbursed to the teams for their efforts in 2016.
The latest figures that have emerged continue to show the huge discrepancy in earnings between the ‘haves’ and the ‘have-nots’ in Formula 1 thanks to a myriad of complex deals, negotiated with teams individually during the Bernie Ecclestone era, which are set to continue until 2020.
Ferrari will bank the most from the $940-million earmarked for teams, despite only finishing third in the 2016 constructors’ championship, with $180-million destined for the Maranello coffers.
World Champion team Mercedes will receive $171 million for their efforts, while Red Bull will bank $161-million.
McLaren will receive almost half of Ferrari’s income with $97-million due to the Woking outfit.
Despite finishing fourth in the constructors championship last year, Force India will receive only $72-million, while Williams who were fifth will get $79-million thanks to a so called heritage bonus.
The second Red Bull team, Toro Rosso will earn $59-million, while Renault will only receive $52-million. The lowest earned by a factory backed team.
Sauber are due $49-million, while Haas who entered ths port last year take home $19-million.
If the income was shared out equally, each team would bank $94-million which would mean Ferrari’s cut would be almost halved while Saubers share would virtually be double.
The above mentioned income is distributed to the F1 teams during nine monthly payments starting in April, with a final revenue adjustment cheque due to teams in March 2018.
The maths goes something like this;
Of F1’s income, 63% goes to the teams, the rest to boost the profits of the commercial rights holders (CRH). The main shareholder is a venture capital group called CVC Capital Partners; various banks and investment companies also hold shares.
The contracts that define how the teams get paid are confidential and each team has its own commercial deal with the CRH.
However, this is believed to be how it works. Bear with me, because it might make your head hurt.
Just under half (47.5%) of the profit – about £500m in the last year of results – is split in half.
One half is divided equally between the top 10 teams as defined by their results over the previous three seasons; the other is split between the top 10 from the previous year alone, with each position receiving a given percentage. The higher up you finished in the constructors’ championship, the more money you get.
There is also a separate pot called the constructors’ championship bonus (CCB), which is about £187.5m and split between Ferrari, Red Bull and McLaren, with Ferrari earning by far the most.
In addition, the two other teams deemed historically important and who also have permanent places on the rule-making F1 strategy group – Mercedes and Williams – each get payments of just over £18.8m.
And £6.25m is given to each team not in the top 10 but competing in the championship.
On top of that, before any money is divided up, Ferrari receive a bonus just for being in the championship, on the basis of the value their presence is perceived to give the sport.
That is worth 5% of the revenues – 2.5% of the promoter’s share and 2.5% from the teams’ pot.
2017 Formula 1 Revenue share:
Big Question: Is the sharing of F1 revenue as detailed above fair? If not how should it be shared?