Ferrari will again receive the largest share of Formula 1’s prize money despite finishing behind Mercedes in 2017 world championship, RaceFans can exclusively reveal.
Formula One Management projects £715 million in revenue will be shared between teams from income streams such as race hosting fees, broadcasting rights, track advertising and other areas.
Haas stands to gain the most compared to its rivals as having finished in the top 10 for the second time it now qualifies for a ‘column 1′ payment. Its earnings are set to increase by 176%.
McLaren’s favourable commercial terms with F1 mean it will receive the fourth-largest share of F1’s income despite finishing ninth out of the 10 teams last year.
Force India, which equalled its best-ever finish of fourth place in the constructors’ championship last year, is among the teams which stands to receive less money than McLaren. However the team went into administration last week, which jeopardises its claim to that income.
The current payment structure was agreed under Bernie Ecclestone and CVC’s control of the sport and will run until the end of 2020. As RaceFans revealed in April, Liberty Media, who has since replaced CVC as F1’s commercial rights holders, has proposed a new payment structure to teams to come into force in 2021.
Projected 2018 payments to F1 teams
All values in £m.
|Team||Column 1||Column 2||Total||LST||CCB||Other||Total||2017 +/-||2017 position|
The income is distributed as follows: Column 1 is divided equally among all teams which have finished in the top 10 places of the constructors’ championship in two of the past three seasons. Column 2 is shared between the top 10 finishers in last year’s championship, with the champions receiving 19% of the pot and the last-placed team taking 4%.
On top of that, Ferrari receives a unique ‘Long Standing Team’ payment, four teams receive additions ‘Constructors Championship Bonus’ payments, and Red Bull, Mercedes and Williams receive further bonus payments.
The teams receive their payments in a series of 10 instalments. The final balance payment will be received in March next year.
For the full story of why Force India has gone into administration and what the future may hold for the team read @DieterRencken’s new column later today on RaceFans. Find all previous RacingLines columns here
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2018 F1 season
- Honda’s jet division helped F1 engineers solve power unit problem
- McLaren Racing losses rise after Honda split
- Ricciardo: Baku “s***show” was Red Bull’s fault
- “Drive to Survive Episode 1: All to Play For” reviewed
- F1’s television and social media audiences rose last year
97 comments on “Formula 1 teams’ prize money payments for 2018 revealed”
Stephen Crowsen (@drycrust)
1st August 2018, 8:39
I’m very pleased that Haas are being paid for competing. It’s disgraceful that a team can compete a whole year and not receive any income for it. Maybe there’s an argument for not paying a team a “Column 2” amount if they don’t score any points, but if they score points and compete at every Grand Prix then they should be paid.
1st August 2018, 8:44
The sport is a farce that Ferrari can earn more then the winning team, utter joke.
1st August 2018, 8:55
Actually it only shows, a good show needs a red Ferrari .
Keith Collantine (@keithcollantine)
1st August 2018, 16:29
Which unfortunately is why we probably won’t see any new teams before 2021.
Antonius Rock (@antoniusrock)
2nd August 2018, 4:59
Not many of those knocking on the door either….
1st August 2018, 9:56
Ferrari has earned its share by winning.
1st August 2018, 10:55
Actually they earned that particular share by just existing in F1.
1st August 2018, 13:30
Ferrari don’t win much though, other than Schumacher 2000 – 2004 and the lucky Raikkonen title in 07, they haven’t won anything since 1979. So only 6 Driver titles.
In fact since 1979
Williams 7 drivers titles (spent the last 10 years with no money)
Mclaren 10 Drivers titles
Red bull – 4 Drivers titles and they were only set up in 2005
Mercedes – 4 Driver titles and they only came in to existence in 2010
Keith Collantine (@keithcollantine)
1st August 2018, 20:25
Keep in mind these payments are based on constructors’ championships, where Ferrari’s last success is slightly more recent (2008). They’ve had 10 constructors’ titles since 1979.
But even so I think to suggest, as some are doing, that this has all been arranged in a fair way to remunerate the teams whose historical associations benefits the sport most is wildly wrong. Compare what Red Bull get to what McLaren get, for example.
It really is a waste of time to take it at face value. The prize money structure is the way it is because Ecclestone bought off some of the teams to wreck FOTA.
mystic one (@mysticus)
1st August 2018, 22:34
Ecclestone was the disease of F1, and finally gotten rid off… He is still showing up and trying to voice if any at all influence and bragging… He wanted to run the show alone, and feeding of off the newcomer’s income and majority of commercial/broadcast rights… He hated FOTA because he didnt want any more voice then his heard anywhere… It was good riddance for the fate of the sport but hopefully it wasnt too late…
Everytime i see his face around, i almost vomit! He destroyed many teams all through silly payment structures, and always did controversial races in questionable countries, and countries hosting races were suffering rather than gaining, because of the fees/costs he was pushing to those countries in the name of “advertising your country, making more tourists come etc” in reality, not many races are profitable for the track owners due to fees/costs associated… and Ecclestone made sure he only receive money and not pay a penny!
Dewald Nel (@ho3n3r)
1st August 2018, 11:39
Not their fault they’ve been there so much longer. Had Mercedes as a team been present since 1955 or whenever it was when they quit, and 2009, they would have gotten the same. That’s 55 years more that Ferrari has been in the sport.
This is the 11th year in total that Mercedes have been in F1, yet it’s Ferrari’s 69th.
I’d say Williams and McLaren definitely deserve a bonus for being in F1 so long continuously as well, albeit not as long as Ferrari.
2nd August 2018, 12:40
No one deserves payments for the length of time they have been in the sport. Payments should be based on success only plus a base payment that all teams get in order to operate.
If we went down that road in Football then Notts County would be rolling in money!
The Prize money in F1 needs a complete overhaul. If Ferrari do not like it then they can bugger off. Everyone should get a reasonable amount and then some smaller bonus payments should be made for success over the previous season.
1st August 2018, 11:47
100% agree. It’s not a sport it is a show. Sports are fair, F1 is not. How can teams spend money to compete and not get paid? How can a team that loses get paid more than the champions? Money enables a team to go faster so paying Ferrari cash for just showing up is the ultimate cheat. But seeing as its not a sport… Good show.
1st August 2018, 8:46
So Ferrari will receive the same amount as the fourth placed team for just turning up.
It would be good value if it stopped their constant whining and threats to quit…………..
In the meantime the afore mentioned fourth placed team as just entered administration.
1st August 2018, 9:02
Imagine the extra £200m which could be spread amongst teams if the extra payments (bar the $40m Ferrari sweetener) could be shared between participants.
I’d spread the money as follows: £45m for each participant; plus £45, 35, 20, 15, 12, 9, 6, 3, 0 based on final position. Thus the WCC will double it’s earnings; top 3 play for big chunks of prize money, and the lower teams still have something to fight for (£3m per place) without it being life or death.
The Ferrari payment should be a one of share options! Not part of the annual prize split.
1st August 2018, 9:58
This is a sensible and fair solution
1st August 2018, 11:00
@coldfly Trouble is that this article is incorrect. Most of the bonuses are paid from outside the prize money budget. Only the CCB payments and half of the Ferrari bonus are paid from the actual prize money.
Then Dieter guesses the CCB bonuses completely wrong to paint an all together false picture (too much bonuses and to low column 1/2 payout). Although seeing how the article on the 2021 prize money is also utterly incorrect it makes sense his take is still wrong now.
When Liberty’s plan goes in effect, they will simply pocket the “other” bonuses themselves. So only a small part of the bonus money will actually be divided among the teams. Plus Ferrari still get $40 million and each of the engine manufacturer will also each receive $10 million (another $80 million which will not be divided).
1st August 2018, 12:39
Turns out not even the CCB is paid from the prize money budget.
Alianora La Canta (@alianora-la-canta)
21st August 2018, 17:37
@patrickl All of it is paid from the same source in the end – the income from F1.
2nd August 2018, 10:55
Fair enough solution. Mine’s a little more complicated:
Get rid of all bonuses. Define a pot of money for distribution to the teams.
Half of this pot gets split equally between the teams. The rest is prize money, divided as follows:
Each team gets one share per place they finish above last. Tot up the total shares, divide the pot by that, then distribute the money. This accounts for a variable-sized grid fairly.
To account for new teams (those who joined the sport with a new entry, not buying out an existing team, for their first 3 years), make the top performing teams help them out. Give each new team a bonus share. The first entry would have their bonus share taken from the top team, the second from the second-to-top, and so on. They loose this bonus after year 3, or if they manage to beat at least 1 non-new team in the previous season’s WCC (they’ve obviously got their feet under the table if they’ve managed that, and it wouldn’t be fair to continue giving them a bonus over a more established team who is probably struggling).
1st August 2018, 9:02
@DieterRencken I understood that Williams used to receive an additional bonus payment, of about £10,000,000 does that no longer apply? Also, how could Bernie and CV justify giving McLaren the CCB when their last WCC was won a single year after Williams last WCC?
Thanks very much for breaking all this down for us.
Dieter Rencken (@dieterrencken)
1st August 2018, 9:21
You’re right (and wrong): They receive a bonus, but its $10m not GBP. It fell off during the conversion from $ to £. Thanks for pointing it out – it’s corrected.
The bigger question is not how could Bernie (and CVC) justify the McLaren CCB for 1998 but not for Williams for 1997, but how could they justify the CCBs for ANY team?
1st August 2018, 10:04
@dieterrencken That’s because you got the concept of CCB wrong and McLaren wouldn’t have gotten a CCB payment for 2018.
1st August 2018, 10:05
Many thanks @dieterrencken, easy to forget that Bernie’s obsession with doing deals in USD made it the official currency of F1.
The CCB situation is indeed difficult to justify, here’s hoping that the teams who receive them see the greater good in dropping them. I’ll believe it when I see it though. I am sure it was once said of Ken Tyrrell that he’d rather own 100% of 10 than 10% of 200, I get the sense that many in the paddock hold that view.
1st August 2018, 11:09
@geemac CCB is ranked by number of race wins over the previous four seasons
Red Bull 8
The CCB budget is 7.5% of the prize money with a minumum of $100 million and this gets divided among the three top ranked teams. Divided as follows: 37% for the top team, 33% for P2 and 30% for P3.
Since 7.% of the prize money is less than $100, the pot will be $100 millon. Mercedes will get 37% of that which is $37 million. The remaining $63 million will be divided among Ferrari and Red Bull. Seeing how Ferrari and Red Bull ended up on the same number of wins they perhaps divide the money equally or perhaps one gets the P2 spot on some other criterium.
– The CCB is a $100 million pot and not something like $145 as Dieter pretend.
– Only 3 teams get paid from this pot
– It’s based on number of race wins and has nothing to do with WCC classification as Dieter seems to keep implying
1st August 2018, 14:32
@patrickl I’m curious, have you got a link to the source of your information?
1st August 2018, 15:40
It’s from a prospectus when they were trying to float F1 on the Singapore stock exchange. ESPN reported some details in 2013:
The CCB bit is explained half way through.
1st August 2018, 13:25
It is claimed, and no way to verify right or wrong, but events that took place in Germany a few years ago involving BE may be a pointer, that BE negotiated with FERRARI to have that extra payment, and that some of it would find its way to ” you know who”. FERRARI of course being an Italian outfit where what may not be so kosher in other places is regarded as normal. It is claimed that the initial approach was made to MACLAREN (Ron Dennis) and he would not play ball, for legal reasons, partly the reason relations between RD and BE were not very warm.
1st August 2018, 9:13
Quite a clear distinction between the F1 A and B teams in that last graph. Look forward to Liberty implementing their 2021 proposal
Thomas Bennett (@felipemassadobrasil)
1st August 2018, 9:18
Apparently this FI thing has just got more controversial, with Andretti or the ex West Ham owners looking to buy it
1st August 2018, 9:42
Wait, so column 2 means that teams don’t actually receive money for where they finished in 2018, but where they finished in 2017? What happens when a team dissolves, did Manor get the money for the 2016 season at the end of 2017?
1st August 2018, 10:51
That was one of the smarts that Bernie built in. @hugh11
To collect your hard earned prize money you have to compete the next year. And if you go into bankruptcy you cannot collect money at all.
I’m sure Bernie would have preferred even to make it a pyramid scheme ;-)
Dieter Rencken (@dieterrencken)
1st August 2018, 9:50
Yes, the money is paid according to current year projections, but per a sliding scale based on 2017 constructors’ championship classification. A team in administration (or wound-up) forfeits its benefits unless all other teams agree – the big bunfight over Force India at present.
1st August 2018, 10:03
Unfortunately these are wrong:
– As I already explained before, McLaren is not getting a CCB payout for 2018.
– Mercedes was miles ahead of Ferrari and Red Bull in CCB ranking, so Mercedes will be the only team with the top payout and not something equal to Ferrari. Ferrari and Red Bull did rank equal over 2014-2017 so their payout would probably be the same, but obviously a lower step than Mercedes.
– Mercedes get an extra performance bonus. They get a “domination” bonus for having two consecutive championships (with a very high number of race wins). This gets quoted as $25 or $30 million. Documents also indicate that this bonus has increased over the years.
– Williams and McLaren would probably still be getting a heritage bonus and Red Bull get their bonus for killing off FOTA. I understand that it’s pretty much guesswork what these bonuses amount to, but the figures quoted here very much deviate from figures uncovered by other sites (for instance Ferrari getting $90 million instead of whatever it is here and Williams $10 million instead of 0).
BTW Why on earth convert these dollar amounts to pounds?
1st August 2018, 15:28
Interesting info @patrickl. Can you tell us where you got these numbers?
@dieterrencken @keithcollantine Can you speak to why the above wasn’t included or why your figures are different?
My impression is that the Ferrari LST was a thumbsuck anyway.
1st August 2018, 16:01
@rpiian The CCB bit and 5% of prize money (or minimum of $ 62.2 million) Ferrari bonus you can find explained in a prospectus from when they were trying to float F1 on the Singapore stock exchange. ESPN (Christian Sylt) reported some details from this in 2013:
The “domination” bonus is explained in several other Christan Sylt articles. For instance this one:
In fairness I quoted the highest figure I could find for this bonus and since the article already claims it increased from $22 million to $25 million. I went with $30 million as is reportedly the current figure.
Christian Sylt (Formula Money) is the only reporter who actually does seem know F1 finances and seems to be trustworthy on the figures he posts.
Dieter unfortunately has a clear agenda to exaggerate the bonus amounts and no desire to get to the bottom of this. He simply keeps rehashing some old figures without understanding what CCB (among others) means. Therefore he just posts the same wrong numbers every year confusing old CCB payouts for historical payments which would in his mind still be paid today. Also every year repeating the same astonishment how McLaren get such a huge CCB bonus and how unfair that is. When in reality they haven’t gotten that bonus since 2015.
He did fix the $10 million Williams omission though.
1st August 2018, 16:16
@rpiian Here some more details. Where Christian Sylt was already correcting Dieters incorrect 2014 numbers:
1st August 2018, 20:16
@Patrickl journos, like Sylt who write in their article: “My colleague Caroline Reid and I are the only journalists worldwide who specialise in covering the business …” and about someone with a different view “had an ulterior motive” don’t make me feel confident. They sound a bit like “the banker who has the only good investment opportunity“.
So what if the figures are of with a margin of a few percents. I’m sure the figures are well hidden, and even the auditors won’t agree.
What is a sure thing, is: B.E. got his wealth somewhere, and a lot of teams are like Dieter: bald in places where you don’t want to be bald. Teams like McLaren should be having trouble finding a spot to add a sponsor on their car, instead of having trouble to pay the paint in between…
Keith Collantine (@keithcollantine)
1st August 2018, 20:56
@rpiian The simple answer is that this is comparing information we have obtained to assumptions other person/s have made.
To put it another way, we are not saying ‘our calculations lead us to believe the totals will be X’, we are saying, ‘information we have received tells us the totals will be X’.
1st August 2018, 10:46
I’m sure Mercedes are not stuck for the odd million or two, but it would be interesting to know why they stand to receive less than last year. (2017 +/- column shows a 1.1m reduction on last year.)
1st August 2018, 19:18
probably because the prize money pot is smaller, primarily due to higher expenses by Liberty.
1st August 2018, 11:49
However unfair people might find Ferraris payment, after witnessing the torrent of red shirts descend on Budapest last weekend you have to appreciate Ferrari being in F1 brings in the fans, the money, and that benefits the other teams. An “unfair” slice of a big pie is still larger than a “fair” slice of a small pie for the other teams.
I’m no Ferrari fan, but being pragmatic F1 needs Ferrari more than Ferrari needs F1.
1st August 2018, 13:38
I doubt it is more than the torrent of orange shirts in Budapest (or Austria, Germany or Spa). So maybe they should pay Max Verstappen bonus money as well for the fans he brings to the track :)
1st August 2018, 16:49
The orange grand stand in Budapest made it look like there was more there than there actually was. Trust me there were more Ferrari fans.
1st August 2018, 20:30
About the orange shirts: The Dutch are a bit “special”. They even went to Russia in their Orange shirts to support their absent team in the WM soccer… Some countries could learn from them. Donald French Smurfs probably thought they were his fans :)
2nd August 2018, 7:49
A lot were also in Red Bull colours which could explain the looks..
2nd August 2018, 17:12
And I’m sure some were walking around topless given the 33 degree weather.
I guarantee there are more Ferrari fans than fans of Verstappen/Red Bull.
1st August 2018, 12:09
Disgusting to look at, as it has been for many years.
Little wonder we have multi-tier F1 and can’t even sustain 10 healthy teams. If Liberty fail on fixing this, they’ve failed on everything.
1st August 2018, 13:28
Couldn’t have said it any better
1st August 2018, 12:24
I did some checking and Dieters figures are even more wrong than I first thought.
If there is a $900 million pot of prize money, the column 1 payments would amount to $42.8 million per team (47.5% of the prize money divided over 10 teams equally). Column 2 would be the other $428 million divided over the teams based on WCC standings in 2017. This is an amount of between $81.2 million (19% of $428 million) for Mercedes and $17.1 million (4%) for Sauber. Lastly the $45 million bonus for Ferrari paid from the prize money.
So that would give these payouts from the prize money:
Red Bull 98,3
Force India 89,8
Toro Rosso 72,7
For a total of $900 million.
Then there are bonuses paid outside of the prize money. Ferrari gets another $45 million from there. Mercedes gets $30 million (or $25 million) “domination” bonus for winning two championships back to back. Then there are the CCB payments ($37 million for Mercedes and probably $31.5 million for Ferrari and Red Bull) based on race wins over the previous four seasons.
No one has an exact idea what the other bonuses are which McLaren, Williams and Red Bull have negotiated and these are not paid from the prize money budget anyway. So I will leave these out.
So for actual prize money paid out from known structures we get (in millions of USD):
Red Bull 129,8
Force India 89,8
Toro Rosso 72,7
Probably Red Bull, McLaren and Williams will receive some more bonus, but we won’t know exactly how much.
So, I’d say this prize money isn’t that badly distributed compared to the performance. Of course Ferrari is disproportionally awarded, but it’s been like that for ages.
Then the 2021 prize money structure which is supposed to “change everything” will not change a thing really. The CCB and domination bonuses will probably be dropped, but instead other bonuses will be paid out.
From the Liberty announcenement:
ie They propose it will be “more balanced”, but historical team bonusses will remain and engine menufactures will start to receive a payout.
From projected figures it looks like basically only the column 2 percentages will be adjusted slightly. Other than that, bonuses will still be paid outside of the prize money structure to the top teams and barely a thing will change.
So the “more balanced” bit comes out as that the top performing team will get 14% instead of 19% for actually doing their best to win the championship. While the bottom feeders get 6% instead of the 4% they receive now for coming in dead last.
Dieter Rencken (@dieterrencken)
1st August 2018, 13:35
@patrickl: I am not usually given to rudeness to readers, but I ask you not to display your utter ignorance so publicly. For reasons best known to you, you have taken to criticising virtually everything that is published under my name, and while I have no issue with informed debate, I object to having our readers so wilfully misled.
For starters, since 2009 I have had in my possession the formula used to calculate team payouts, and this breakdown complies in every respect with that, save where currency factors influence the numbers. IF the numbers are wrong, THEN FOM has misled the teams about the level of income – which is HIGHLY unlikely given they have access to the audited statements.
Second, the breakdown of these numbers are, down to the closest decimal, as per the document circulated to teams by FOM in March – save for currency factors – and were checked with two sources, both of whom received the original document directly from FOM.
I am not even going to bother commenting on McLaren’s 2018 CCB payment, save to say that it provides further proof of your obvious ignorance when it comes to F1’s revenue structures. For your info, the values in the table are quoted in GBP, not US$.
I don’t know, or care, where you get your supposed information from – although I glean from some of your comments that you applied provisions from the 1998-2007 Concorde Agreement that have since been superseded (twice over) – but request that you mislead readers elsewhere, and not on RaceFans. Thank you.
1st August 2018, 14:04
@dieterrencken Indeed you don’t care where I got my information from. It’s very clear you have an agenda and to that end you’d rather keep on misleading the readers on how (unfair) the money is distributed rather than post truthfully.
So if anyone is rude here then it’s you for keeping on rehashing the same incorrect numbers and misinterpreted rules when more objective journalists do get it right. You probably just don’t want to follow their numbers because it puts a much more fair and balanced number on what the teams get.
For instance people like Christian Sylt (Formula Money) and even Joe Saward (but others too) do produce numbers in line with what is known about the current contracts. Instead of the numbers which you keep pushing out based on incorrect figures which you have available since 2009 (and which are indeed clearly outdated).
The details on the CCB structure are well know for years (From the prospectus which ESPN reported in 2013):
amount: “the greater of 7.5% of our Prize Fund EBITDA, and US$100 million (the ‘CCB Fund’).”
ranking: “determined primarily on Events won in the four seasons prior to 2012.”
steps: “the Team ranked first receiving 37% of the CCB Fund, the second Team receiving 33% of the CCB Fund and the third Team receiving 30% of the CCB Fund.”
It’s crystal clear that McLaren are not eligible for a CCB payout.
For your info, I already lamented the fact that your figures were posted in such a marginal currency.
So get of your high horse and educate yourself. It’s already embarrassing enough that I have to correct such a huge list of errors in your figures.
Even worse, that even after you have been exposed for being so wrong you still not can’t be bothered to look up what is correct and what not just shows that it’s you who purposefully misleads the readers here.
1st August 2018, 14:09
1st August 2018, 14:14
@robbie Seriously? They guy is posting nothing but nonsense and you attack me?