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Exclusive: Team prize money accelerates 400% over five years

NEWS STORY
19/03/2013

Anyone who knows Formula One's boss Bernie Ecclestone will be aware that he has a wicked sense of humour. It is sometimes hard to tell when he is being ironic but again, the better you know him, the easier it becomes. So when he recently told Pitpass' business editor Christian Sylt that the F1 teams "have all got more money than God," one might assume that his tongue was firmly in his cheek. However, new details have come to light which suggest that he was not necessarily joking.

Listening to the press conference (above) before last weekend's season-opening Australian Grand Prix you could be forgiven for thinking that the teams are cash-strapped and hard done by. When asked to what extent the global financial crisis has affected the teams' ability to pull in sponsors, McLaren boss Martin Whitmarsh lamented "the world economy certainly hasn't made it any easier, there's no doubt about that. But I think there's some positive signs in the market at the moment, that people are seeing that Formula One is stabilising, there have been some great world championships over the last few years. I sense that perhaps we were the last into this recession, we will be the last out of it."

There is no doubt that F1 is an expensive business to be in and Whitmarsh admitted that "if you say we're going to put two cars on the grid 19 times this year and look at the budget, then I think that by most people's... certainly by most people's domestic economics it seems very excessive indeed." However, there is also no doubt that the teams are richly rewarded and this is a subject which was not touched on in the press conference.

According to reports from banks which are analysing F1 ahead of its planned flotation on the Singapore stock exchange, the teams received just over £498.6m ($750m) in prize money last year. They shared in a fund comprised of around 50% of F1's profits and this year even more will be paid out as their split is increasing to 63%.

The 2012 pay-out can not be confirmed since F1 has not yet released its financial statements for that year. However, a sum of £498.6m would not be unexpected since F1's accounts for the year-ending 31 December 2011 confirm that the teams' prize money came to £450m ($698.5m). The figure is likely to have increased the following year since there was an additional race on the calendar with the return of the Bahrain Grand Prix.

It is hard to sympathise with an F1 team which has been on the receiving end of one of the largest shares of a £450m pay-out in 2011 alone. In the current economic climate, or at any time to be frank, that amount of money is incomprehensible to the average man on the street. What makes it all the more remarkable is that F1 company documents also reveal that the team prize money payments came to £124.9m ($248m) just five years ago. It means that the teams' share of the spoils has accelerated by nearly 400% during one of the deepest economic downturns in living memory.

Now it's easy to see why Ecclestone was not joking.

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