Formula One is an expensive sport: Expensive to attend, expensive to watch on TV, but especially expensive for teams taking part in it. In the recently-completed 2013 season, Red Bull and Lotus received the most value for their significant investments.
Value is a nebulous concept in the F1 world. The goal is to win, of course, but the entire sport is also a travelling billboard. Teams count exposure and sponsorship dollars along with podiums and pole positions.
For the purposes of this comparison, though, we will examine the value teams received for their 2013 budgets in terms of their cost for each point scored in the Constructors' Championship.
Spending a lot of money can certainly help you succeed in F1 (and is usually a prerequisite), but it is not a guarantee. Some of the sport's most prestigious teams found that out in 2013.
Ferrari is the oldest and most successful team in F1, the only one to compete in every season since the World Championship began in 1950. The Italian team has won 221 grands prix and 16 Constructors' Championships, both records. Ferrari is also the world's most powerful brand, according to Brand Finance. Befitting such a company, the team's budget is the largest in F1—this past season, it bought the Scuderia a third-place finish, behind a Mercedes team with a budget less than two-thirds as large.
In terms of the amount of money spent for each point scored, Ferrari finished even lower in the standings:
|2013 F1 Teams: Value for Budget|
|Team||Budget* (in millions of £)||Points||£ Per Point (in millions of £)|
|*Budget figures are from Dieter Rencken's 'The True Cost of Formula 1' for Autosport (paywall protected).|
That McLaren finished near the bottom of these rankings will come as no surprise, given the team from Woking's historically bad year (they failed to score even one podium finish for the first time since 1980). Williams' minuscule point total, despite a £90 million budget, is somewhat less of a surprise, given the team scored the same number of points in 2011. They did win a race in 2012, though.
Williams deputy team principal, Claire Williams, acknowledged the problems faced by smaller-budget teams to the official F1 website. "It's become really difficult, for a variety of reasons," she told the site, "like the economic crises that hit in 2009." However, she does not necessarily support a budget cap, saying:
I do believe that it is up to teams to generate their income. But of course with the general global economic climate we have to be sensible about that - but equally this sport is so competitive that the way to win is inevitably to spend money. We have to have conversations about it and I hope that the new strategy group that we have will help to move that forward.
From an efficiency perspective, Lotus was nearly on-par with Red Bull, spending almost the exact same amount for each point they scored. Of course, Red Bull's extra £105 million left a large discrepancy in the actual Constructors' standings. Mercedes was also close, with Ferrari spending about £300,000 per point more than the top three teams.
The fact that the top six spending-teams also finished in the top six in terms of the value they received for their money supports the idea that you need to spend a lot of money to be successful in F1.
The limit is not how much development work can be done on the cars, it is how much money the teams can wring out of their owners and sponsors. If you are wondering where, exactly, all that money goes, Formula Money authors Christian Sylt and Caroline Reid provide an interesting breakdown on NBC Sports.
Of course, all of these numbers will be thrown out the window in 2014 with new engines and other changes to the technical regulations. At the FIA press conference before the 2013 Hungarian Grand Prix, Toro Rosso team principal, Franz Tost, predicted that, "Next year we will have an increase of—I don't know—15, 20 million and that's reality."
The teams with budgets in the £150-200 million range will be able to absorb those increased costs much more easily than teams spending £50-70 million. For that reason, the gaps between the leaders and the mid-field, and between the mid-field and the back-markers, will only grow in 2014.
Follow Matthew Walthert on Twitter @MatthewWalthert