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Red Bull increased F1 team spending by 17.5% in 2017

NEWS STORY
10/10/2018

The new aero regulations introduced last season, were part of the reason that Red Bull had to increase its spending on its two F1 teams by 17.5% in 2017, The energy drinks manufacturer upping its spending to a record 170m ($223.8m)

Forbes reveals that according to Red Bull Racing's latest financial statements, it spent 230m ($301.9m) in 2017, up 16.8% on 2016.

The documents state that "the cost base remains under tight control, with the increased costs in the year reflecting a combination of higher chassis development, increased driver costs and payments for the power unit".

Much of the chassis development spending was down to the new regulations introduced in 2017 in a bid to improve the racing and look of the cars, supposedly making them look "more aggressive".

Along with increasing the minimum weight and doing away with the controversial engine token system, front wings were widened, as were the cars, shark fins returned and the size of barge boards increased.

Whether the racing improved is debatable, but Mercedes still won both titles and Red Bull slipped behind the German team and Ferrari in the constructor standings.

Red Bull Racing is owned by Red Bull Technology, which although involved in other projects including a 225 mph hypercar with Aston Martin and a partnership Sunseeker to develop a range of yachts, its "principal activity (of the group) is the design, development and manufacture of Formula One racing cars".

In 2017, Red Bull Technology's costs increased 14.8% to 279.4m ($366.4m), the bulk of that spent on Red Bull Racing. Research & Development increased by 10.5% on 2016 to 107.9m ($141.5m), while staff numbers increased by 35 to 793, leading to a wage bill of 82.9m ($108.7m). In total, Red Bull gave Red Bull Technology 94.2m ($123.5m) up 20.4% on 2016.

All in all, Red Bull Racing was left with a 0.6m ($0.8m) net profit in 2017 as it had $231.3m ($303.4m) of revenue which mainly came from prize money and sponsors, not to mention Red Bull itself.

Because it is based in Italy, sister team Toro Rosso's accounts are not easily accessible, but Forbes, for the first time, has been able to crunch some of the numbers.

In 2017, Toro Rosso was paid 76.2m ($100.3m) by parent company Red Bull, which was around 55.6% of its total revenue, which is interesting when you consider that the far more successful main team received just 18m more.

That same year, Toro Rosso's costs were 134.9m ($177.4m), which, following a 1.06m ($1.4m) tax bill left it with a 1.6m ($2.1m) net profit.

This year the Faenza outfit has switched to Honda engines, and while the need to accommodate the new power unit will drive up spending, so too will the need to prepare the way for Red Bull's own move to the Japanese manufacturer in 2019.

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