Just how much does Formula 1 cost?

While a culture war divides Formula 1 racing from its closest rivals, the North American racing circuits, F1 is miles ahead when it comes to money. Thanks to a worldwide following of petrol-heads and a colossal advertising budget, the phenomena of Formula 1 rakes in cash faster than Jenson Button’s best lap time.

Are you by any chance a country wishing to raise its commercial profile by signalling its ascendency into the global trading community? Or, are you a small European principality whose status as a tax-haven for the world’s glitterati demands more money spent on entertainment than a Roman emperor? If so, you’re looking at a serious outflow of cash in order to attract the prospect of hosting an F1 race.

The Australian Grand Prix has never turned a profit since it moved to Melbourne in 1996 The Formula One Group received an estimated $568 million (£349 million) in 2010 from hosting fees alone, this breaks down at an average of just over $30m per race. However, with high demand for each of the races and only one supplier in the F1 market it doesn’t take a Harvard economist to work out that it’s the Formula One Group in the driving seat when it comes to negotiations.

As such, one undisclosed party paid just over $50m to host a race in 2010 and most contracts have annual real-term fee increases as standard.


These high hosting costs also explain why the cost of attendance for fans is so high.

For example, the cost for a good seat at the Chinese Grand Prix was over 3,500 Yuan (£338) – roughly three times the monthly salary of the average Chinese worker.

However, even with such high ticket prices, hosting doesn’t always yield a profit, and the taxpayers of the hosting country are often left picking up the tab. Melbourne’s has been repeatedly derided as a folly, recently posting a loss of  close to $50m.


The much coveted Constructors’ Championship paid a top prize of $87m (£53.4m) to the victors Red Bull Racing in 2010.

A report released by F1 monitor Formula Money predicted that the overall prize fund will keep climbing as time progresses. By 2016 it is predicted that the prize for the Constructors’ Championship alone will be worth $222m (£136m).


With such big bucks on offer for the teams it will come as no surprise that the gear-shifting grunt work of driving is also remunerated in rather grand orders.

Last year, Bruno Senna was paid a respectable €150,000 (£132,000) by Hispania Racing, while the likes of Fernando Alonso commanded upwards of €30m (£26.5m) from Ferrari.

Of course there are still several drivers knocking about who actually pay for the privilege of inclusion…


An optional budget cap allows teams extra technical freedom.

The 2010 figure was £40 million, excluding driver’s salaries and engine costs. The total amount of resources available to the competing F1 teams in 2010 racked up to £1.25bn.

Broken down, the figures reveal significant differentials in financial resources across the teams, with Ferrari’s £260m making HRT’s £33m look like an almost measly sum. Behind Ferrari, the next most resource-rich in 2010 were Mercedes (£173m) and McLaren (£137m).

Of course where these funds are derived from differs from team to team, however it is generally a mix of advertising revenue and consumer sales of tyres, engines and the like, in addition to an often weighty contribution from the team owners.


Formula 1 garners an estimated 597 million unique television viewers, so these are events watched by one in twelve people worldwide (with a much higher concentration in the richer parts of the world).

The sport is also growing in popularity in the Far East, epitomised by the success of the Chinese and Singapore Grands Prix, so the consumer base for the sport is massive and expanding. As a result of such impressive exposure, F1 has generated an advertising base that truly spans the globe.

In 2007 the teams received a total of $834m (£512m) from advertising, with a fair slice of this comprised by Marlboro’s ‘silent’ $100m (£61m) deal with Ferrari.


The average revenue produced by each race stacked up to an astounding $229m (£140.6m) in 2006, giving a total of $3.9bn (£2.4bn) for the season, and $4.3bn (£2.6bn) in 2007.

F1 already generates greater revenue than the English Premier League, the National Football League and Major Baseball, and this princely sum is expected to grow even mightier as time passes.


The Formula One Group, that collectively sells the commercial rights of the sport, is comprised of three major shareholders, in addition to some minor shareholders.

The major players are Delta Topco with around 70% ownership, JP Morgan Chase with around 20%, and Bernie Ecclestone’s family trust with most of the remaining 10%.

Article written in cooperation with Money.co.uk


[Images via The Cahier Archive]

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Richard Bailey

Founder & Chief Editor at MotorsportM8
Hasn't missed a Grand Prix since 1989. Has a soft spot for Minardi. Tattooed with 35+ Grand Prix circuits.