How F1 Teams Make Money

So Formula 1 aint cheap.

Mercedes spent 460 Million Dollars to win the Constructors championship in 2020, and Red Bull weren’t far behind that number. Then in 2021 - even with cost cap regulations the numbers were astronomical.

So how on earth did the majority of the teams turn a profit?

How do you spend that much on designing, making and racing the most advanced cars on the planet - and still make some significant dough?

Well let me take you through where all that money comes from - and no, it’s not all from Daddy Stroll.

➤Follow us on:

So Zak Brown said recently that the era of F1 teams being worth ‘Billions’ is fast approaching, but on the face of it - that is hard to understand.

With engines costing more than 25 million dollars a year and drivers taking salaries that rival even the biggest sportspeople in the world - it gets even harder to understand.

Especially as you bear in mind that Mercedes made a loss in 2017, and 2018 and 2019 - even after winning the constructors AND the drivers championships by miles.

And that has been standard practice for years. F1 wasn’t meant to make money in itself, it was meant to be a marketing exercise for the sponsors and teams - who would them make the money off the back of it.

This then means they can spend more money sponsoring teams and the cycle continues.

But this has changed in recent years - the teams are starting to make some serious dollar.

📺 F1 Driver’s Technique Explained

📺 F1 Engineering

🏎️ Track & Racing Driver!

🏁 Sim Racers!

#Formula1 #McLaren #Money

[Driver]

So all that's standing between me and having a Driver61 F1 team is $450M - anyone fancy sponsoring??? 💸

[Goodnewsglobal]

Logistics and travel is actually paid for by F1.. I was surprised to discover this myself but it does make sense..

[aumpauskar]

Just to add with the inclusion of cost cap still the big teams spend more than the small ones as there are some things which are not included under the cost cap (drivers, top personnel, engines etc.)

[leamigo]

5:00 I can't escape the Discord noises

[fauxbro]

It's not only marketing but R&D does eventually make it into production vehicles

[DaniMacYo]

Do a video on how much F1 roughly spends globally a year. Minus the crashes, parts and components replacements during a season. Even how much is spent to host a race to see roughly how much money is needed overall to get F1 through a full season. Including the travel costs for the cars and equipment. How much is made from the fans during a live event, how much from tv viewing and so on.

[RepUtoKa]

Maybe something that came short in this video: F1 is also a great advertising space for the teams themselves. Ferrari does not mind making a loss in F1, because they know, that they will sell more road cars than without F1 and making a profit there. Same goes for teams like Mercedes and Red Bull.

[callmeshaggy]

How do these teams make money?? They get paid by their points. Who pays them? _"The Bahrain Grand Prix has secured rights to host a race til 2036"_

[disasterarea]

Man, that was excactly the question that came to me this morning and then i see this. Best youtuber. Cant wait that this 4 min ad ends and the Video starts

[shadowwsk]

When the cost cap was announced, I did wonder if teams will start to make profit if they will be earning more money than they can spend, or they'll just spend all the money somewhere else.

[yodaisgod]

The teams can thank Liberty Media. You will see F1 teams being bought and sold like other sports teams over the coming decade because of their ever increasing valuation.

[NoMoreMrNiceGuy]

With the American market at F1 doorsteps i think it's going to be the biggest championship in the world.

[realkilju]

5:02 lol someone joined a discord call 🤣

[axem.]

Ferrari get paid separately for being Ferrari, haha.

[danielsgrunge]

The cost cap is gonna be awesome
Hope we get more teams soon

[JAEWST]

There is no way that this is the same guy from older videos

[gandalf_thegrey]

0:44
I may misunderstanding the situation but having significant amount of money spended helps with company value rather than making it harder.

The fact that Lewis Hamilton is signed to Mercedes is worth way more for Mercedes F1 (as a company) than the 50 million dollars spended on him year after year. His existence alone absolves his salary and company worth. Additionally his racecraft increases the likelihood of having a good WDC/WCC position and therefore access to prize money, advertisement and media attention.

Company worth is a really weird thing. For example Facebook lost nearly 300 billion dollars in worth since the start of February. But nothing has happened, the EU laws that Meta stocks now suffer from aren't even in place yet.
Just wait for the moment it arrives in the real world, it'll tank it even more.

[GonzoDonzo]

The McLaren looks bent due to the paint lines, halo angle, and downward sweep of the nose.

[CrimsonFlame]

The discord join sound at 5:02 caught me off guard haha

[dm]

5:02 Diver61 just slid into the server!