Mercedes got $177 million in prize and show money last year. Ferrari got $205 million because their cars are red, although they'll get a hell of a lot less this year due to their poor position in the championship. I'm not sure if there are payments for winning individual races, there are some weird numbers out there.
So with the upcoming $145 million spending cap, both Mercedes F1 and Ferrari will be actual profit centers if you ignore driver salaries.
codrus (Forum Supporter) said:Double_Wishbone said:F1 better come up with a desirable engine formula moving forward. If manufacturers don't want to pay-to-play in Formula E, F1 might be a tough sell. That being said, it looks like IMSA's new LMDh is garnering a lot of support because it'll be really low cost for manufacturers with an added bonus of BoP and parity. I don't see F1 going in that direction though. It's sad too that Honda, who seems to have developed a decent F1 engine, is leaving as well because I'm sure no one wants to spend millions to get stomped by Mercedes.
It's an open question how long Mercedes will be around as well. Winning a whole bunch of championships in a row is great, but at some point the marketing value of it goes into diminishing returns and they'll start to wonder why they're spending that much money on it.
Given how successful Merc has been, I actually wonder how much money Merc even spends on their F1 team. Wolfe is pretty savvy in terms of managment. Thinking about it- it's not as if Daimler is one of the super OEM's- both Fiat and Renault are bigger. I'd suggest they are managing their money really well. And going into the cost limitation set of rules, they should prosper- keeping the costs from Mercedes pretty reasonable.
alfadriver (Forum Supporter) said:codrus (Forum Supporter) said:Double_Wishbone said:F1 better come up with a desirable engine formula moving forward. If manufacturers don't want to pay-to-play in Formula E, F1 might be a tough sell. That being said, it looks like IMSA's new LMDh is garnering a lot of support because it'll be really low cost for manufacturers with an added bonus of BoP and parity. I don't see F1 going in that direction though. It's sad too that Honda, who seems to have developed a decent F1 engine, is leaving as well because I'm sure no one wants to spend millions to get stomped by Mercedes.
It's an open question how long Mercedes will be around as well. Winning a whole bunch of championships in a row is great, but at some point the marketing value of it goes into diminishing returns and they'll start to wonder why they're spending that much money on it.
Given how successful Merc has been, I actually wonder how much money Merc even spends on their F1 team. Wolfe is pretty savvy in terms of managment. Thinking about it- it's not as if Daimler is one of the super OEM's- both Fiat and Renault are bigger. I'd suggest they are managing their money really well. And going into the cost limitation set of rules, they should prosper- keeping the costs from Mercedes pretty reasonable.
Mercedes corporate is spending a lot (not clear how much, but probably > $100M/year) on the team as part of their marketing/advertising budget, to promote the Mercedes and AMG brands. That's fine, but winning your 9th F1 constructors' world championship is not as valuable as winning your first, and at some point questions will be raised about whether or not they're getting their money's worth.
I am also highly dubious about the effectiveness of the cost cap. Think about all the time that F1 engineers spend coming up with creative ways around the technical regulations, clawing back the downforce that they're not supposed to have any more. Now imagine that Mercedes has a bunch of accountants doing the same thing only with the accounting rules instead of the technical regulations. They will, you know.
I'm sure we'll get lots of dry and uninteresting drama when Ferrari protests Mercedes because they spent N million dollars out of some road car development budget that, SURPRISE, just happens to produce some useful data for the F1 team...
In reply to codrus (Forum Supporter) :
According to this https://www.espn.com/f1/story/_/id/29823419/mercedes-f1-spent-442-million-2019-made-money report, the team makes money. $14M profit on $440M spent.
It's not a great ROI but it turns a marketing expense into a profit center and we get some awesome race cars.
"The accounts said Mercedes had enjoyed a 23.6% share of television coverage, generating a cumulative television advertising value equivalent (AVE) of $5.406 billion for commercial partners"
alfadriver (Forum Supporter) said:In reply to codrus (Forum Supporter) :
According to this https://www.espn.com/f1/story/_/id/29823419/mercedes-f1-spent-442-million-2019-made-money report, the team makes money. $14M profit on $440M spent.
Mercedes the F1 team is owned by Mercedes the car company. The car company pays the F1 team a ton of money for putting the three-pointed star on the side of the car. So yes, on paper the team makes money, but since they are owned by the company that's paying them most of that money it's a bit questionable as to whether or not that is really a "profit". It's an accounting game, Mercedes is paying that $100M+ to themselves.
And no, I'm doubtful that the team would get anywhere close to as much money if they (for some reason) sold those rights to a different company. Having the Mercedes logo on the side of the car that Mercedes built is worth a lot more to Mercedes than putting (say) a BMW logo on the same car would be to BMW. People would know that BMW didn't actually build that car, they just wrote a hypothetical check, and that doesn't carry the same prestige.
codrus (Forum Supporter) said:And no, I'm doubtful that the team would get anywhere close to as much money if they (for some reason) sold those rights to a different company. Having the Mercedes logo on the side of the car that Mercedes built is worth a lot more to Mercedes than putting (say) a BMW logo on the same car would be to BMW. People would know that BMW didn't actually build that car, they just wrote a hypothetical check, and that doesn't carry the same prestige.
Like next year's Aston Martin that has a Mercedes engine. Or the Red Bull "Aston Martin" engine that was made by Renault. Or the Infiniti branding on that same engine before that...
Keith Tanner said:codrus (Forum Supporter) said:And no, I'm doubtful that the team would get anywhere close to as much money if they (for some reason) sold those rights to a different company. Having the Mercedes logo on the side of the car that Mercedes built is worth a lot more to Mercedes than putting (say) a BMW logo on the same car would be to BMW. People would know that BMW didn't actually build that car, they just wrote a hypothetical check, and that doesn't carry the same prestige.
Like next year's Aston Martin that has a Mercedes engine. Or the Red Bull "Aston Martin" engine that was made by Renault. Or the Infiniti branding on that same engine before that...
Sure, it happens all the time. But do you really think Nissan paid the Renault team as much to put the Infiniti logo on the car as Mercedes-the-car-company did for Mercedes-the-F1-team? I don't think the figures are publicly available, but I'm pretty sure it's not even close.
Of course not. It didn't even seem like anyone was taking it seriously at the time. I don't know if Aston ever actually claimed any connection beyond a logo on the engine cover.
Mercedes pointed out that this is the first of their 255 starts in F1 where they do NOT have a world champion driving for them. Which is amazing. I assume we are not counting the old Grand Prix races.
In reply to Keith Tanner :
Also the first time Lewis has missed a race since Australia 2007
In reply to Keith Tanner :
Actually I think they are as Fangio drove for Mercedes back in the day.
In reply to Javelin (Forum Supporter) :
Yes Fangio, he Moss were teammates at Mercedes
Yeah, Fangio in 54/55. The pre-WW2 grands prix don't count as "Formula 1", that term was invented in 1950.
Keith Tanner said:Mercedes got $177 million in prize and show money last year. Ferrari got $205 million because their cars are red, although they'll get a hell of a lot less this year due to their poor position in the championship. I'm not sure if there are payments for winning individual races, there are some weird numbers out there.
So with the upcoming $145 million spending cap, both Mercedes F1 and Ferrari will be actual profit centers if you ignore driver salaries.
Ferrari gets something like $50-60 million on top just for being there as a legacy payment, IIRC.
Lewis is either gonna go hey I like this having weekends off thing or hey I hate watching from the sidelines thing and decide if its time to retire or not.
I think he could afford to hang up the suit :)
In reply to kevlarcorolla :
My conspiracy theory about this is that Lewis wants to retire after seeing the Grosjean crash. He somehow faked his positive test. He already has WDC and WCC and a positive test lets him skip the end of the season without breach of contract.
In reply to AaronT :
I thought about that too but he could still race Abu Dhabi.
z31maniac said:Keith Tanner said:Mercedes got $177 million in prize and show money last year. Ferrari got $205 million because their cars are red, although they'll get a hell of a lot less this year due to their poor position in the championship. I'm not sure if there are payments for winning individual races, there are some weird numbers out there.
So with the upcoming $145 million spending cap, both Mercedes F1 and Ferrari will be actual profit centers if you ignore driver salaries.
Ferrari gets something like $50-60 million on top just for being there as a legacy payment, IIRC.
Ferrari gets $73 million for being Ferrari. Then they get another $41 million as a "Constructors championship bonus" - Mercedes also gets $41M, Red Bull gets $36M and McLaren gets $33M. Then there's a bonus paid to four teams as a lite version of the Ferrari Money from what I can tell - $35M to Mercedes and Red Bull and $10M to Williams.
After all that, the teams get a share of the overall pot ($35M each) and then the constructor championship prize money that is distributed according to finishing position.
If you're following along, that means that Ferrari gets $149 million just to show up. If they finish last in the championship, they'd get paid a total of $164 million. Last year, Red Bull got paid less than that for finishing third.
Someday Ferrari will do the math and realize that the difference between winning the championship and just showing up is $51 million. That's only about 25% of the maximum payout. They could stop development on the car and the engine and grab some F2 midfield driver with a sponsor and sit back and enjoy.
I think it's odd that Lewis hasn't finalized a contract for next year, but he's only 35. He could conceivably have 10 more years in F1 if he wanted to. Schumacher raced until he was 43, Kimi is 41, Alonso is making a comeback at 39. And I'd say Lewis is in better physical condition than any of them.
I think it'd be nice if he retired, because it would make 2021 more interesting at least (2022 and beyond might be interesting in their own right, but right now 2021 is looking to be a repeat of 2020). He could also set a precedent that 7 world championships is enough for anyone, which I don't think would be a bad precedent. But he doesn't have kids and he's given no indication that he wants to "settle down" or anything. Maybe he'd want to work on his music career or something, I dunno.
steronz said:I think it's odd that Lewis hasn't finalized a contract for next year, but he's only 35. He could conceivably have 10 more years in F1 if he wanted to. Schumacher raced until he was 43, Kimi is 41, Alonso is making a comeback at 39. And I'd say Lewis is in better physical condition than any of them.
My guess as to why he hasn't finalized is money. Salary cap comes in 2023 and is going to cut his pay, so probably they're negotiating for a bonus while it's still allowed.
Keith Tanner said:Someday Ferrari will do the math and realize that the difference between winning the championship and just showing up is $51 million. That's only about 25% of the maximum payout. They could stop development on the car and the engine and grab some F2 midfield driver with a sponsor and sit back and enjoy.
That is assuming they want to do as little as possible. Coming in last place for a long time probably wouldn't benefit their road car image all that much either. I will make the positive assumption that the management and people at Ferrari have some sort of mission statement that is more around making winning cars or safe cars than to maximizing profits through leveraging past performance to get easy income...
Given their performance in the post-Schumi era and the continued adoration of the tifosi, I don't think it really matters where they finish :)
I think the reason that Lewis' contract hasn't been finalized for 2021 is that he knows he wants to come back, Mercedes wants him back and so it's just a matter of details. He's concentrating on winning races. A few years ago, he'd visibly back off after winning the championship. Not anymore. Plus there's a non-zero chance that he and Toto are just screwing with everybody because it's fun.
In reply to Keith Tanner :
Well Massa had won the championship for like 60 seconds or so, Alonso almost won it more than once and Vettel would have won at least one if he didn't take himself out in Germany. Ferrari has been very good up until the last 2-3 seasons. Shoot, even old man Kimi won a race in one of them.
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