What is Formula 1?

Formula 1 is la creme de la creme of racing. Super Cars are handcrafted by some of the finest engineers and driven by the finest. Each team gets to design their ultimate race car and modify it to their likings. The catch is that after each race, each team can go back to the drawing board and enhance their car depending on how they performed.

This in turn makes for an extravagant spectacle of modern technology mixed with the thrill of racing. From one side of the hemisphere to the next, all over five different continents, twenty three stops year round in some of earth's most precious destinations. Decadent, blood-pumping action.

Each team must produce two cars and have two drivers to race for each event. The main objective of the driver is to get the fastest time during qualifying for a better spot during race day, therefore improving the chance of passing the finish line first. The sole objective of the team is to build the most efficient and greatest hypercar. In a nutshell, drivers drive the fastest. Teams build the best car.

The single goal of each team is to accumulate the most amount of points per stop.

Each team is awarded points based on their place at the end of the race. There are two championships that all teams are competing for at each stop. The Drivers Cup, and The Constructors Cup.

The Drivers Championship

The drivers championship is for the drivers only. The driver accumulates points based on performance, as in which place they land in during each race. The top 10 get most of the points as the rest don't get any. At the end of a season the driver who accumulated most points gets to lift the Drivers Championship and all the glory.

The Constructors Championship

Similar to the Drivers Championship, the constructors championship is won by the whole team behind building the Formula 1 race car. The team earns points based on which place the car finishes in. Teams are awarded two spots for two drivers. Therefore they devise a strategy to earn the most points in a season and become victorious. This could even include the not so exciting pass through, where one driver on the team lets the other pass just to accumulate more points for the team overall.

But how much does it cost to run an F1 team?

Formula 1 is a very expensive pass time mainly for billionaires. Supposedly the quickest way to go from billionaire to millionaire is to have your own Formula 1 team.

To put it into perspective, Ferrari spent $463 million during their 2021 season. Mercedes spent $485 million. Red Bull, $445 million. Renault being a mid level F1 team spent $272 million during their 2020 season. The least competitive team Haas spent $80 million.

Finances

To start a formula 1 team you have to have your finances in order. The estimated amount is within the 9 figures. Minimum. Just the entrance fee alone to race is 200 million dollars.

If your uncle happens to be a rich Russian oligarch, you may consider writing a check. If not, then you must go and find investors. Sponsors are crucial as they usually amount to half the team's income.

Teams do what they can with what they have. Some teams get most of their money from sponsors. Some teams need money so bad that they only have drivers who pay to be on the roster.

Capital

Formula One comes with many expensive add-ons. First you need a facility where you can keep your team of engineers and drivers. This would include, but not limited to; a race factory, offices, wind tunnel, race control, and a private test track.

Next, you can't have your engineers making a car out of thin air or your driver running around the track in his underwear like Ricky Bobby. You're gonna need to invest in computers, softwares for race car design and engines, desks for blueprints and coffee, chairs to sit in, tables for food and beverages and other important things, and maybe even a mini food court for all the workers.

One of the most crucial and expensive parts of creating the car is the machinery alone. This would include anything and everything that is used to build the components of your f1 racer car. 3D printers for your 3D molds, CNC machines, workbenches, drills and other tools.

Teams buy their parts from other race car manufacturers. Yes, they literally buy parts off other teams such as Ferrari or Delara rather than building it themselves. I mean why waste resources and efforts when you can just go to the best and buy it off of them.

These parts include but are not limited to the engines, gear box, and chassis and other listed parts on the regulations for F1. This helps teams with lower budgets’ cut costs, including research and development costs. This can save teams millions.

Labor

Securing the finances for the team is phase one. The land and facilities included. For everything to function, employees are a necessity. Mercedes reported a total of 1,400 people working for them last season.

There are many roles on a F1 team. Not everyone on the team can be the Mercedes-AMG Petronas F1 executive, billionaire, and owner Toto Wolf. Nor the hotshot pilot for Red Bull, Max Verstappen. There are technical roles, operational roles, race roles, and business roles. Some people have to design the parts for the cars. Others have to weld. Some manage the electronics. Some focus on shedding inches off the car for increased downforce.

After the car is crafted and polished in le fabrique, it is sent off to be tested on the test track.

There the focus is on performance. Trackside engineers and strategists gather together to analyze results and crunch numbers. Pictures are captured by track photographers for updates and press leaks. The pit crew is also present, ready for action.

Business roles set up day to day operations. Administrative roles who take on marketing, public relations, logistics, and accounting.

Then last we have the directors and the drivers. The public figures. Those who take on the nitty gritty needs of the press.

Operations “Travel and Lodging”

Teams travel from event to event. At each of the 23 stops, they assemble everything together for the grand prix. It takes up to two days for the teams to set up.

Freight costs to transport all the equipment can be quite expensive. This includes Mobile facilities. Motorhome, Pit wall, Computers and tech. Travel and lodging costs for 50 plus employees. Also all the additional costs of missed flights and lost items.

Teams bring the buildings with them via freight. Red Bull has a literal building including three stories with living rooms, offices, and bars.

Sponsors

Most teams make money through sponsors. This translates to brands wanting air time during a race for coverage. That would consist of brands paying large sums of money for spots on both the car and the driver suit.

Mercedes accounted for 19 percent of TV air time during the 2021 season. Sponsors want to be associated with the best of the best. This usually entails being associated with winners. Mercedes being the publicity monster that they are can afford to bargain for better deals with sponsors.

Last season almost every team broke even. Only Red Bull and Mercedes were able to make a decent profit. $20 million sounds like a big profit. But considering the fact that both teams invested within the $450 million dollar range makes this profit at most meek.

To be on the suits or cars of Ferrari and Mercedes, sponsors are looking at $3-$5million dollars a year. Sponsors who are looking to be involved can begin with an initial investment of about $500,000 a year.

This however will not lead to branding on teams cars or drivers suits. Cognizant invested $35 million for a spot on Aston Martin. Petronas spent a proper $42 million on Mercedes. Oracle put up $300 million to get with Red Bull.

Every team is paid roughly around $36 million USD. This is only for being in the F1 circuit. The Constructor's Cup comes with a payout based on where a team finishes at the end of the season. In 2021 Mercedes received a cool $61 million USD. Last place earned $13 million USD. Ferrari earned $68 million USD. Plus another Constructor’s Cup Bonus of $36 million USD to Mercedes, Ferrari, Red Bull, and McLaren.

PAYING FOR A SPOT

Some drivers pay for a spot on the team. Yes, rather than getting paid to drive, these drivers pay to drive. This has been going on since the beginning of motorsports.

Though heavily criticized by others, these drivers bring in more revenue for the team. Current driver Lance Stroll is backed up by his father Lawrence Stroll.

Nicola Latifi is behind the wheel for Williams, as the sponsorship money from Sofina Foods and Lavazza Coffee is too good to turn down. Until the Ukraine War, Nikita Mazepin was a driver for Haas due to his fathers company paying the team's bills.

Conclusion

Formula 1 is known for fast cars, exotic locations, and million dollar budgets.

With teams needing to travel year round to five different continents and 23 individual races, a hefty checkbook is more than absolutely necessary. Formula One is grand. Exquisit. Rousing. And elegant.

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