How much does it cost to run a Formula 1 team?
June 16, 2010
Joan Villadelprat is characterised in F1 terms as someone who knows his onions. In his journey from mechanic to team manager Joan has worked for McLaren, Ferrari, Tyrrell, Benetton and Prost. He is now hoping to make the final step on the ladder, first climbed by Ron Dennis, to become a team principal with his Spanish based organisation Epsilon Euskadi running an F1 team in the 2011 championship. In a recent interview with Autosprint, Joan expressed his concerns about the timing of the 13th team for 2011 – as an FIA announcement is not due until the end of August, by which time the new team will have precious little time to design and build their F1 car for 2011. What is also interesting is that Joan comments on the level of funding he feels is needed to run a competitive team.
Team operating budgets are an interesting topic,given that the teams do not generally publish such figures, or if they do heavily disguise them, estimates range wildly as to what these actually are. For example in 2009 the Black Book estimated Ferrari’s budget as USD404million and McLaren at USD377 million, with the smallest budget being Toro Ross at USD112million. In contrast Formula Money, estimated Ferrari at USD371million and McLaren at USD484million, with the smallest budget being Force India with USD120million. One thing that appears to be agreed, certainly among the teams themselves, is that these figures need to come down. In 1992 Williams employed 190 people, in 2008 it was 540, in 1992 they won the world championship, in 2008 they finished 8th.
When Virgin committed to Virgin Racing they did so when the FIA intention was to impose a budget cap of £40 million for all teams, excluding drivers salaries and a few other costs. This never happened and so Virgin decided to keep their own budget cap in place in the hope that other teams would have to come down to their level. The Formula One Teams Association (FOTA) agreed that costs should come down and that they should aim to be back to 1992 levels by the end of 2012, although how this would be measured and policed remained unclear.
Back in August 2009 Auto Motor und Sport published a piece claiming that the exact details of the cost cutting would remain a closely guarded secret, but that the number of staff travelling to Grand Prix was going to be capped at 45 people, which would have consequences for the drivers physio’s amongst others – it was interesting to see that at the start of 2010 the drivers were protesting about the absence of their physios on the grid (rather than at the Grand Prix) – so whether this was linked to some form of agreed reduction is open to question. The article also said that team expenditure, excluding driver and top management salaries and marketing costs, would not exceed Euro 100m in 2010 and Euro 50m in 2011. It is therefore interesting that in commenting on team budgets Joan suggested that if a team wanted to develop a competitive car then Euro 100m was needed to avoid the team ”..having to start over from zero every year.” This is bad news for Virgin as it implies that the 2011 budgets will not be down to Euro 50m as suggested by Auto Motor und Sport, although they may well be limited to Euro 100 million as suggested by Joan Villadelprat, who, whether or not he becomes a team principal, still knows an onion when he sees one.