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Analysis: How F1 teams spent $2.2 billion in 2018

2018 F1 season review

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RaceFans has revealed how much Formula 1 teams spent on their racing activities in 2018.

The 10 teams spent a combined total of $2.2 billion (£1.73bn) to build their cars and run their teams over this year’s 21 rounds.

How big were their F1 operations? How much prize money did they receive? And which teams gave the best value for money? Compare all the data below.

NB. Budget and staff figures for Mercedes, Ferrari and Renault exclude their engine operations for ease of comparison

Staff

At the track each team has two drivers and a fixed limit on the number of staff which can support their race operations. But for the front-running teams these are merely the tips of vast icebergs. Ferrari and Mercedes’ chassis operations alone now number almost 1,000 people each.

These staggering figures stand in sharp contrast to those employed by the likes of Haas. F1’s youngest team runs an extremely lean operation by virtue of relying heavily on Ferrari for its power train and associated parts, plus Dallara for much of the rest.

F1’s planned budget cap from 2021 is now expected to take the form of a ‘glide path’, gradually trimming budgets from $200 million in the first year to a targeted $150 million. There will also be several big-ticket exemptions to these figures. Nonetheless the biggest teams are, not unreasonably, concerned how they will ‘right-size’ their operations to fit the new limit.

Prize money

F1’s current prize money structure has been blamed for much of the inequality in the sport. It was introduced by Bernie Ecclestone under the sport’s ownership by CVC Capital Partners and will remain in place until the end of 2020.

In August RaceFans revealed how this year’s income will be distributed, though this remains subject to F1’s final revenue figures for 2018. Questions also remain over the extent to which Force India/Racing Point is eligible for income this year following its formal return to the sport as a new constructor at mid-season – an issue Haas is keenly pursuing, as events in Abu Dhabi demonstrated.

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Regardless of those changes, the inequality between those who receive the special bonuses agreed by Ecclestone and those who do not are clear to see. Liberty Media, now in their third year running F1, plan to introduce a more equitable distribution of prize money in 2021. Ferrari, Mercedes and Red Bull stand to lose the most, as RaceFans reported in April.

Cost per point

Which team achieved the most with the resources it had? We can get a rough idea by comparing budgets with points tallies. But as the graph above indicates, this has an obvious drawback.

Points are only scored by those who finish in the top 10 positions. This means many finishes by the least competitive teams effectively do not count towards their final rankings.

This approach therefore negatively exaggerates the performance of the teams who had the most non-points-scoring finishes. This above all applies to Williams, who had 34 such finishes. In comparison Mercedes, Ferrari and Red Bull had just two between them.

Cost per second of lap time

A more instructive connection between spending and performance can be made by comparing the teams’ budgets with their lap time gain from season to season. Williams still ranks the worst, but this gives a more realistic impression of their performance compared to their rivals.

In particular, it shows how F1’s richest teams are spending huge sums in the pursuit of comparatively little extra performance, because they have the means to do so. For the big three teams, F1 is an exercise in brute force expenditure and expertise versus the law of diminishing returns.

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Compare all the teams

TeamBudget (m)Lap time improvement vs 2017 (s)LTI $m/secPoints$m/pointC’ship pos.
Mercedes400-1.133536550.61st
Ferrari410-1.193445710.72nd
Red Bull310-1.313664190.73rd
Renault190-1.911571221.64th
Haas130-1.8968931.45th
McLaren220-0.92240623.26th
Force India / Racing Point*120-1.24961111.17th
Sauber135-2.4754482.88th
Toro Rosso150-1.14131334.59th
Williams150-0.33450721.510th

*Force India / Racing Point scored a combined 111 points over the course of the season, but the 59 points they scored in the first 12 races were not counted towards their final tally due to their re-entry into the championship, hence their final championship position of seventh instead of fifth.

2018 F1 team budgets in full

Read the full breakdowns for each team here:

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2018 F1 season review

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Author information

Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...
Dieter Rencken
Dieter Rencken has held full FIA Formula 1 media accreditation since 2000, during which period he has reported from over 300 grands prix, plus...

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Posted on Categories 2018 F1 season, 2018 F1 season review, F1 StatisticsTags , ,

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  • 33 comments on “Analysis: How F1 teams spent $2.2 billion in 2018”

    1. Interesting.

    2. In short: L O D S O F E M O N E

      1. Count De Money

    3. I think the first graph is the instructive one:

      The part of the money generated by Formula 1 and then distributed to the actual teams putting on the show is used in large parts to gainfully employ thousands of people across Europe and the World.

      The other almost half of the revenues gets distributed to the investors.

      And which of these parts is supposedly “wasteful” spending and shall be curtailed by hook and by crook?

    4. Some questions come to mind:
      The staff of Merc and Ferrari is including the motor divison i guess?
      Compared with the staff off RBR: only for the chassis its something to account for. RBR can give more attantion to aero and Chassis.
      Renault staff is excluding Viry i guess? So Renault has a much lager staff and lower spending on “hardware”?

      1. Headcounts exclude engine divisions as we’ve noted in all the components leading up to this analysis, plus I’ve stated and restated it here in reply to similar comments.

    5. What’s the reason Red Bull received less prize money than both Williams & Force India?

      1. Same question here, @dave-f.
        I thought it was an error, but the same numbers are in the racinglines articles by @dieterrencken.
        A good old table with the various sources of FOM money would be welcome.

        1. in 2017 this was the result:
          https://www.autosport.com/f1/news/129388/formula-1-team-payments-for-2017-revealed

          so i guess this must be in error in this article

          1. And 2018:
            https://thesportsrush.com/formula-1-discloses-2018-prize-money-payments-for-all-teams/

            Ferrari leads the pack with £147.2m set to be paid to the team. This is the highest amount any F1 team will receive from its 2017 season, Ferrari gets more than Mercedes despite having finished 2nd in the constructor’s championship, as Ferrari has a ‘Long Standing team’ payment clause in its payout structure.

            Mercedes are second on the payment list, with the team set to receive a payment of £128.8m.

            Red Bull(£110.7m) are 3rd on the list, followed by McLaren(£61.7), Force India(£52.4), Williams(£49.9), Renault(£47.3m), Toro Rosso(£42.4m), Haas(£39.9) and Sauber(£34.9m).

            1. Those were based on my relevations for a previous outlet in 2017. Formula 1 did not ‘disclose’ the payments – indeed, it’s covenants require that he payments to be kept confidential – but once they had been revealed every second outlet leapt on the bandwagon…

        2. Correct – there was a calculus error in Red Bull’s FOM income spilt: although the overall amount received from FOM is correct at $150m, the split is roughly 50/50 ‘prize money’ and bonus. The graphic has been corrected.

          As for earning roughly the same as Force India and Williams, a link in the article explains the revenue structure. Bear in mind that all teams receive an equal share of Column 1 and the average delta from first to tenth place is 2% per placing. Payments are based on the previous year’s championship classification applied to current year’s income, and RBR came 3rd in 2017 and FI and Williams 4th and 5th respectively.

          So there is a 2% difference on around half the earnings per placing.

          1. Thanks @dietrrencken.

            Could you please also check the split for Mercedes & Ferrari?
            Mercedes’ $100m prize money seems a bit high, compared to a low $80m for Ferrari (2nd) and Red Bull’s $75 (3rd).
            In your article of 1/8/18 you put an equal step between the first 3 teams (3%pts).
            – all get 10% of column 1
            – and respectively 19%, 16%, 13% of column 2.
            thus $95m, $85m, $75m would make more sense.

            1. Those are the numbers I received from a source, and checked with others. The only change is to RBR as above which came about because I’d added one if the bonus amounts into the base FOM figure rather than the bonus total.

              Bear on mind that the payments are estimated based on projected F1 income. The final (check) payments will be made in March.

    6. So much money, for racing on about two dozens sundays . Sure, the money is probably meant to employ people. But for some fun racing on sunday afternoon?! Don’t repeat all the technological-advances-reasons, because I don’t believe in that anymore.

      1. @krizz everything about the sport is expensive from sponsorship, building and maintaining the tracks, hosting the races. Even going to the races can be ridiculously expensive if you have a family and just do a weekend getaway that involves flights/hotels etc.

        All commercial sports are becoming expensive though. Some soccer teams’ players are worth billions as are the teams and they have crazy yearly budgets too. Let’s not talk about the Olympics which can bankrupt nations…

        1. Totally right. That is why I sincerely think that so-called professional sports or commercial sports as you call it, is ridiculous.
          I would actually prefer the small scale, regional club racing scene more. Like the regional karting scene, grand-ma-shopping-car racing/rallying series or the classic formula ford idea (no high-tech, scientific/expensive aerodynamics, just clean lines). There seems to be less pressure to perform (and, thus, spend) in those racing categories and more emphasis on just having fun on a sunday afternoon. Okay, I’ll admit that the current Formula Ford might become professional more and more or is meant for people with pro-ambitions. Yet, consider this: I found out that there exists something funny as a go-karting championship for plain rental gokarts!

          All that money involved in professional sports…. it could also be used to feed millions of hungry people in some forgotten third world countries (if not governed/distributed by some selfish/hypocritical/bureaucratic government or agency…) And, yes, I know, this is an easy, classic opinion to give, but it is worth considering this thought.

          1. @krizz

            Or the world could spend less on military and we can still enjoy F1. Look it up, check how for example the usa spends for 50% of the world budget. Money enough everywhere, just not enough political will..

            1. Yes, I know, the USA does spend a humongous amount of money on the military. Although, with less money, F1 could also still be F1 I think, but well…

            2. Ridiculous comment. You are comparing apples to potatoes. One is the amount of money a Government spends on national defense through funds gained by taxation while the other is a purely commercial venture spent for entertainment through funds gained by sponsorship and corporate profit. What is spent on one has zero impact on what is spent on the other.

          2. @krizz yes, it would be nice to have regional racing but who watches regional racing? no one really does and that’s why the contestants have to bear the cost of organizing it without any compensation. Unfortunately, the majority of the money in sports is only available at the top categories and let’s be honest some sports don’t pay anything.

            As for world hunger, sports are probably not the answer. As for F1, there’s the possibility of some improvements trickling into manufacturing. If they can improve the efficiency of the average combustion engine by 1%, they will have covered the cost of F1 for everyone out there making F1 the greenest sport on earth. Even integrating hybrid technologies at a lower cost would improve the world dramatically. Most hybrids still remain uneconomical unless you are a part-time Uber.

            1. @freelittlebirds
              If there wouldn’t be F1 (or F2) I’d be watching far more F3 races. If top class racing is “beheaded”, so to say, I guess that carracing fans will just watch lower (simpler, less expensive) racing categories. The racing battles in the lower, more regional categories can be just as exciting, if not more exciting than in the global racing categories.

              And I don’t expect miracles for world problems like world hunger, if F1 would become drastically less expensive. Yet all small steps will help in such global problems. And, to cut short my reasoning: I think we should go back to animal-drawn transportation, abolish fertilizers. Just keep the drainage systems, like the Ancient Romans already had, apparently. In short: less people –> less environmental problems. Means a whole bunch of people (including myself maybe) might have died in infancy, but would that really make such a big difference. It would slow down global progress or something, but what’s progress anyway, it’s just which point view one takes….

            2. @freelittlebirds sorry for the bad spelling at the end of my last message, but I think you’ll get it, sort of ;)
              By the way, are you a parttime Uber?

    7. First of all thanks for an interesting article, it tells a lot about the bizarre amounts of money that goes around in the world of Formula 1.

      But then: Cost per second of lap time. I don’t buy this as a telling metric, for the following two reasons:
      One is that lap time has no value to a team if they cannot convert it to points. Force India for example have generally been great at converting their pace into points for the last couple of seasons. Toro Rosso are the polar opposite; they are remarkably weak at converting pace to points. Arguably this also goes for Haas, a team which has shown plenty of pace yet has struggled to extract the maximum result available to them. Thus although helpful, laptime is only an in-direct way for teams to gain championship places and therefor financial awards. Points are one step closer to being a direct factor.
      Secondly: If we are judging how effectively teams created value out of their budget in 2018, we cannot compare season-to-season. Such comparison would not limit the perspective to 2018. A team on-the-up such as Sauber is flattered as a result of their previous struggles. A team on their way down such as Williams is disadvantaged in comparison.

      I suggest awarding points for all the race results this season, 20 for a car finishing first and 1 for a car finishing last (if all cars finished) and use the sum of these points per team and compare that to each teams’ budget. This would be a more true measure of how a team actually performed in 2018.

    8. I hope Stroll could still able to fully cover ‘Racing Point’ cost since they’re likely get no FOM income next year.

      1. ‘Only’ column 1 would be at risk, @ruliemaulana.

        But that estimated $33 will be covered somewhere in an agreement between FOM and Racing Point I assume.

    9. A note: it’s really hard to read some of this on mobile because the graphs squash themselves and hide the x axis labels, hiding half the team names.

      1. Showing fine on my Android using Chrome.

        1. Having the same issues as Passo, half of the team labels on some graphs are missing.

          1. @dieterrencken

            Yep same here, on Android. The cropping on the axis is an issue, the labels tend to miss/disappear.

            The legends also are generally cropped so much that they are not understable. Can they be moved to below the graphs?

    10. How many people work for Dallara and are they included in the HAAS headcounts? They do the work that other teams are doing in-house…

      I agree that the graphs indicating points/performance per expenditure aren’t very telling. F1 is such a complex beast, there is no doubt some of that money is being spent on infrastructure/investment for future seasons or in for example the case of Alfa Romeo Sauber cashing in on savings made previous seasons with the outdated engine.

      More attention to these numbers are a good thing. How and why F1 is considered so valuable will never cease to amaze me and ultimately is what attracts me to it above other motorsports. No one involved is just playing around, there is beyond imaginable investment in just competing.

      1. @skipgamer, the difficulty is in working out what proportion of Dallara’s workforce are involved in Haas’s F1 division, as Dallara are involved in a wide range of projects. The situation is also a little more ambiguous as I believe that, according to comments Haas has made in the past, there are a small number of staff that belong to Haas but are on secondment to Dallara to co-ordinate production.

    11. Yes F1 is costly and as “entertainment”, could be a challenge to justify. But just out of interest I looked up Manchester United FC. Annual budget in 2018 of $741 Million US (and change). One might ask … for what.?
      Then as is oft quoted …. “That’s show-business”.
      http://www.statista.com/statistics/383889/manchester-united-operating-expenses/
      It would be expected that there are many teams with similar budgets and not just in Football (yes, reference to any and all forms of Footy).

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