Solving Formula One’s prize money problem

 

abudhabi2015

Credit: Bleacher Report

Last week, Autosport revealed that Formula One teams had been awarded a prize pot of some $965m for their performances last season.

The money was given by Formula One Management (FOM) to the ten teams that competed in the 2015 world championship, with newcomers Haas not yet eligible for a share of the pot.

While the teams were all awarded some part of the cash for participating in the series, as well as for performance, a staggering $295m of prize money was awarded not on merit, but to a select few teams as a result of pre-signed agreements with Bernie Ecclestone.

It means that Ferrari – which benefits from a $35m constructors’ championship bonus as well as a controversial $70m payday for its status as Formula One’s most historic team – took home $192m for its 2015 efforts, while runaway champions Mercedes – which enjoys $74m in bonus payments – earned just $171m.

A further $74m in bonuses for Red Bull meant that the Austrian concern was given $144m, while Williams – which is entitled to just $10m in added payments and beat them to third place in the constructors’ standings – earned just $87m.

McLaren – which endured a wretched 2015 and placed a disastrous ninth – were the fifth most successful team in the earning stakes, with a generous $32m bonus handout netting the Woking outfit $82m.

Beneath McLaren are the teams not deemed eligible for these funds in the eyes of the sport’s elite. Force India earned $67m, while Lotus (now Renault) took home $64m. Toro Rosso was rewarded with a $57m piece of the pie, while Sauber benefitted to the tune of $57m. Manor, the only team not to score a point in 2015, earned $47m.

A full breakdown of the prize fund for 2015 can be seen here:

Pot 1 ($335m) Pot 2 ($335m) Pot 3 ($295m) Total Prize Money ($965m)
Ferrari $33.5m $53.5m $105m $192m
Mercedes $33.5m $63.5m $74m $171m
Red Bull $33.5m $36.5m $74m $144m
Williams $33.5m $43.5m $10m $87m
McLaren $33.5m $16.5m $32m $82m
Force India $33.5m $33.5m N/A $67m
Lotus $33.5m $30.5m N/A $64m
Toro Rosso $33.5m $23.5m N/A $57m
Sauber $33.5m $20.5m N/A $54m
Manor $33.5m $13.5m N/A $47m

Thanks to gift-wrapped bonus payments, what these figures create is a huge disparity between the teams fortunate enough to have been around long enough or been successful enough in the past, and those whose efforts have not been rewarded on the track.

That Formula One currently finds itself in a situation where teams at the back of the grid are struggling to make ends meet while the sport’s coffers are being divided in such an unfair manner is a damning indictment of those at the top.

Ferrari may be the longest serving and most successful team in Formula One history, but what gives a team that has won nothing in the way of championships since 2008 the right to a healthy bonus of more than $100m, while teams like Sauber and Manor earn nothing as they face a desperate struggle for survival?

Mercedes may be the team of the moment, and Red Bull, McLaren and Williams have certainly enjoyed many a day in the now firmly set suns of yesteryear, but in the here and now, prize money should be what it says on the tin. It needs to be distributed in a fair way, based on performance, and not as a note of thanks for their contributions to the sport.

That a team like Force India has produced such fine cars in the face of such a raw deal from the sport’s kingmakers is a glowing testament to the talents of their workforce back at Silverstone. With a fairer share of the prize pot, their potential to achieve would only be greater still.

A redistribution of funds

F1 Grand Prix of Italy

Credit: Bryn Lennon/Getty Images

Now, armed with a calculator and with my Bernie Ecclestone-styled wig firmly donned, I have devised an alternative prize pot with the aim of rewarding teams on performance rather than prestige.

To make this a fair experiment, I will be playing with the $965m that the teams were given in the real world, but I have changed the way in which it is handed out.

I have split the total prize fund into three distinct pots, the first two worth $432.5m apiece, with the third pot containing $100m.

Pot one will be given to teams for their participation in the sport, ensuring that, straight out of the box, everyone earns a nice starter of $43.25m.

Pot two is a tiered performance bonus, with Mercedes, as champions, earning 14.5 per cent, with Ferrari netting 13.5 per cent for coming second and so on until you get to Manor, which gets 5.5 per cent of the pot. This ensures that each team earns a minimum of $67.05m, more than Force India got in real life for finishing fifth.

This brings us to pot three, which is a pure $100m performance bonus, and is shared between teams based simply on how many points they scored in the previous season.

Mercedes finished with 703 points in 2015 – 36.6 per cent of those available, and therefore, they take away $36.6m, with Ferrari – who amassed 22.3 per cent of the possible points on offer – bagging $22.3m. This filters down to McLaren, which earned just 1.4 per cent of the points last season. Manor, which failed to score in 2015, gets nothing from this pot.

This leaves us with the following breakdown:

Pot 1 ($432.5m) Pot 2 ($432.5m) Pot 3 ($100m) Total Prize Money ($965m)
Mercedes $43.25m $62.7m $36.6m $142.55m
Ferrari $43.25m $58.4m $22.3m $123.95m
Williams $43.25m $54.1m $13.4m $110.75m
Red Bull $43.25m $49.7m $9.7m $102.65m
Force India $43.25m $45.4m $7.1m $95.75m
Lotus $43.25m $41.1m $4.1m $88.45m
Toro Rosso $43.25m $36.8m $3.5m $83.55m
Sauber $43.25m $32.4m $1.9m $77.55m
McLaren $43.25m $28.1m $1.4m $72.75m
Manor $43.25m $23.8m $0 $67.05m

As a result, the amount of prize money that each team earns reflects fairly their on-track performance during the 2015 season.

While in real life, the difference between the amount of money awarded to the highest-earning team and the lowest was $145m. Under my system, this disparity falls to $75.5m. Mercedes, Ferrari, Red Bull and McLaren all find themselves worse off, but the four richest teams in the sport aside, every other constructor benefits to the tune of at least $20m.

This boost in revenue would give the midfield teams more funds, which could be used to invest in better personnel and facilities, increasing the chances of added competition on the grid. Teams would be less likely to need to procure the services of pay drivers, opening up more room for the most talented youngsters to progress to Formula One.

At present, teams only begin to earn prize money at the end of their second season, and only the top ten in the championship benefit from the system. I would change both of these factors, which would allow the Haas team to immediately reap the fruits of their vast investment into the sport and prevent the risk of any one team being cut adrift as a result of a lack of money.

With a formula in place that rewards teams on current endeavours rather than past glories, the message would be simple: if you want more money, do your talking on the track.

Stephen D’Albiac

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