Unequal Formula 1 Prize Money Distribution Continues to Hurt Smaller Teams

Matthew Walthert@@MatthewWalthertFeatured ColumnistApril 22, 2016

Some of F1's smaller teams, like Sauber, have been struggling financially in recent seasons.
Some of F1's smaller teams, like Sauber, have been struggling financially in recent seasons.Clive Mason/Getty Images

Formula One brought in nearly $2 billion in 2015, yet unequal revenue distribution is still threatening the future of some teams.

Despite finishing second in the constructors' championship last year, Ferrari will receive $21 million more in prize money than any other team this year, according to Autosport's Dieter Rencken and Lawrence Barretto. More than half of Ferrari's $192 million payout comes in the form of various bonuses, though, rather than for their 2015 performance.

Meanwhile, Sauber's financial problems meant their 2016 car was not ready for the first pre-season test and the team has been late paying their staff.

"If you try to explain to people out there the kind of income the sport generates—and it has, year by year, gone up if you look at the last few years—yet so many teams are having issues, this can't be right," Sauber team principal Monisha Kaltenborn told Crash.net. "Something is fundamentally wrong in the sport."

Sauber team principal Monisha Kaltenborn.
Sauber team principal Monisha Kaltenborn.Ross Land/Associated Press

Force India have also been struggling financially and, along with Sauber, filed a complaint with the European Union's Competition Committee last year, "questioning the governance of Formula 1 and showing that the system of dividing revenues and determining how Formula 1's rules are set is both unfair and unlawful," according to the BBC.

Indeed, according to Autosport's figures, both Sauber and Force India (along with Renault and Toro Rosso) will receive less money than McLaren in 2016, despite finishing ahead of the Woking-based team last year.

Again, the bonus payments are to blame, as just $50 million of McLaren's $82 million haul is for the team's on-track performance. Like Ferrari, McLaren receives extra cash due to their heritage and perceived importance and value for the sport (the team has been around since 1966, winning 12 drivers' and eight constructors' titles).

2016 F1 Team Payouts
TeamPerformanceBonusTotal2015 Constructors' Standings
Ferrari$87 million$105 million$192 million2
Mercedes$97 million$74 million$171 million1
Red Bull$70 million$74 million$144 million4
Williams$77 million$10 million$87 million3
McLaren$50 million$32 million$82 million9
Force India$67 million$67 million5
Renault (Lotus)$64 million$64 million6
Toro Rosso$57 million$57 million7
Sauber$54 million$54 million8
Manor$47 million$47 million10
Autosport

With a similar legacy, Williams do receive some bonus money, but they still took in $57 million less than Red Bull from the prize fund, despite finishing 70 points ahead of the Bulls in last year's constructors' standings.

Again, more than half of Red Bull's payout comes in the form of bonus money, despite the team being a relative newcomer to F1 (2005 was their first year as a constructor). However, Red Bull were in the midst of a four-year title run when the last commercial deals were signed, giving them significant leverage.

Williams technical director Pat Symonds recently admitted the team is still trailing some of the deeper-pocketed outfits when it comes to tools for managing race strategy. "Pre-race it's not a problem but to have the live strategy tools that other people are using—we're still not there," he told Autosport's Barretto.

Symonds went on to explain that, as a result, the team's risk tolerance is perhaps lower than others'. This has manifested itself in some (overly) conservative strategy calls in the past two seasons that cost them chances to win races, such as the 2015 British Grand Prix.

A more equal revenue distribution model (hopefully coupled with a spending cap) would help ensure the survival of smaller teams like Sauber and Force India, as well as level the playing field (somewhat) for teams like Williams, hoping to compete with the big, manufacturer-backed teams at the front.

Instead, the sport is stuck in an unhealthy stalemate while some teams teeter on the brink. Since 2012, the sport has lost HRT, Caterham and very nearly Manor. 

Even the drivers agree changes need to be made. The Grand Prix Drivers' Association recently published an open letter saying, "the decision-making process in the sport is obsolete and ill-structured and prevents progress being made":

Unfortunately, the FIA under president Jean Todt has abdicated its responsibility to govern the sport, and the teams have too much power through the Strategy Group. Why would Ferrari, Mercedes and Red Bull vote to lower their own revenues?

It may take something like the EU investigation to force the hands of those running the show, but, as ESPN F1's Kate Walker pointed out, "any EU investigation will be slow to reach a conclusion. Previous investigations have taken years, not months, to complete, and there is no guarantee that the EU's findings will result in any change to the way F1 operates."

Earlier in April, F1 CEO Bernie Ecclestone told Autosport's Ian Parkes he has had conversations with the EU about the current situation in the sport. "They're starting to get more and more interested in the anti-competitive way that we've got," he said. But that is still a long way from anything being solved.

In the meantime, the big teams keep getting more money while the small teams keep struggling along. There is enough money to make everyone happy, but some people just don't like to share.

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