Sunteți pe pagina 1din 36

Earnings | Drivers 79

Photography: 2013 Daimler AG

Photography: Getty Images/Red Bull Content Pool

78 Xxxxxxxx | Xxxxxxxx

Formula One drivers are some of the highest paid sports


stars in the world, and the best stand to make hundreds
of millions of dollars during their career
Writer: Caroline Reid

o many fans of the sport, Formula One


drivers represent the archetype of the
playboy lifestyle, with their on-track exploits
driving an earning power to match their
reputations. However, driver earnings can
be affected by a range factors. Skill is only a part of it,
with marketing appeal, nationality and the luck of being
in the right place at the right time all influencing their
earning potential. Shedding light on the future earning
power of F1s stars, research by F1 industry monitor
Formula Money has revealed the expected career wealth
of all 2013 competitors.
The Driver Value Index predicts that 2008 world
champion Lewis Hamilton will become the highest

Above: Mercedes
Lewis Hamilton is
predicted to earn
over $300m more in
his career than the
second ranked driver,
Fernando Alonso

earning driver in the history of the sport by the time his


career comes to a close. The 28-year-old Briton was paid
an estimated $25 million in 2013 by Mercedes and the
research shows that he is expected to make a staggering
$805.9m over the course of his career.
This surpasses even the total earned by seven times
world champion Michael Schumacher, who between
1991 and his retirement in 2012 earned $626.75m. This
consisted of $439m in salary and a further $187.75m in
personal endorsements, from companies such as German
insurer DVAG, which graced the stars cap for a large part
of his career.
The data was calculated by working out the average
career length for all drivers who retired in the last decade

Photography: Sutton-images.com

the race
to riches
and then multiplying the current drivers estimated years
remaining in the sport by their average annual earnings.
The results were then weighted for world champion
drivers and also for those who won their first race or
point ahead of the average time.
As the youngest ever Formula One world champion,
Lewis Hamilton has been a high earner from an early age.
Should he win another championship his earning power
will rise again and he potentially has more than a decade
left in the sport.

Richer still
However, even Hamiltons predicted earnings wont make
him the worlds richest sportsman. Forbes Magazine

Top: Sebastian Vettel


is ranked fourth in
the earnings stakes
Above: Jenson
Button is just below
him in fifth place

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Driver

Predicted total
career earnings

Lewis Hamilton

$805.9m

Fernando Alonso

$475.9m

Kimi Rikknen

$404.2m

Sebastian Vettel

$249.5m

Jenson Button

$175.6m

Felipe Massa

$120.4m

Mark Webber

$69.6m

Pastor Maldonado

$39.1m

Nico Rosberg

$34.8m

Sergio Prez

$22.4m

Adrian Sutil

$10.3m

Romain Grosjean

$5.0m

Giedo van der Garde

$4.0m

Charles Pic

$2.0m

Jules Bianchi

$2.0m

Nico Hlkenberg

$1.9m

Daniel Ricciardo

$1.4m

Max Chilton

$1.0m

Paul di Resta

$1.0m

Jean-ric Vergne

$0.6m

Esteban Gutirrez

$0.5m

Valtteri Bottas

$0.5m

TOTAL

$2,427.5m
$110.3m

Average

Source: Formula Money

2013 DRIVER VALUE INDEX:


PREDICTED CAREER EARNINGS

80 Drivers | Earnings

Methodology
1. The total career earnings so far for all current drivers was
calculated based on the estimates of driver salaries and
personal sponsorship in the Formula Money databases.
Only salaries and sponsorship earned while competing in
F1 were included.
2. To estimate provisional future earnings for the current
drivers the first step was to calculate the average annual
earnings for each driver. Then all drivers who retired in the
last decade were studied in order to calculate the average
career length for race winners, podium finishers and
everyone else. These average career lengths were applied
to the current drivers depending on their performance
status. The drivers estimated remaining years in the sport
were then multiplied by their average annual earnings to
arrive at a provisional estimation of future earnings for
each. As a result, total earnings for drivers close to the start
of their career have been projected using an average career
length for a competitor of their ability. If such drivers race for
longer then they have the potential to earn much more than
our projections.
3. A weighting was then given to the earnings of world
champions. By studying the earnings of champions who
retired in the last decade, a weighting was calculated by
comparing their salaries in the year they won the
championship to those in the year they left the sport.
The provisional future earnings for the existing world
champions were then multiplied by the percentage
increase this produced.

Photography: Sutton-images.com

4. To weight the remaining drivers we calculated the average


number of races it took the current grid to score their first F1
point. In cases where they had scored their first point ahead
of the average, the drivers future earnings were weighted
accordingly. To arrive at our final figures, the average number
of races it took the current race-winners to score their first F1
victory was calculated. A weighting percentage was applied
to correlate with the number of races ahead of the average
that the driver in question won his first race.

Above: Fernando
Alonso currently
earns the most in
the history of F1

calculates that Tiger Woods is the first sports star to make


a billion dollars from career earnings and the golfer made
$78m in the year ending June 2013. This is far more than
the best-paid F1 driver Fernando Alonso on $43m in
annual salary and sponsorship.
Alonso takes second place in the Driver Value Index
with predicted career earnings of $475.9m. He currently
earns the highest salary in the history of the sport, taking
home $40m from Ferrari with an additional $3m coming
from personal sponsors. Hes followed by his future teammate Kimi Rikknen on predicted earnings of $404.2m
and Sebastian Vettel on $249.5m, who has lost some of his
power to command top salary by his determination to
stay with Red Bulls top machinery rather than playing
off rival teams in salary negotiations.
The other world champion on the grid, Jenson Button,
comes in fifth with total career earnings of $175.6m less
than a quarter of Hamiltons estimated haul. As Button
only won the title in his 10th season and at the age of 30,
he hypothetically has less time remaining in F1 to reap
the additional financial benefits that a world title brings.

the research shows that


lewis hamilton is expected
to make a staggering
$805.9 million over the
course of his career
He won just one race prior to taking the F1 title in 2009
which, when combined with his age, explains his position
in the ranking.
Some potential stars of the future, such as Nico
Rosberg ($34.8m) and Sergio Prez ($22.4m) appear
relatively far down the ranking. This is due to the fact that
total career earnings for drivers close to the start of their
careers have been projected using an average career
length for a competitor of their standing. If drivers such
as Rosberg and Prez win the title, then their earning
potential will dramatically expand.

An uneven playing field


On average the drivers will earn $110.3m over their
careers, confirming F1s place as one of the most lucrative
sports for its competitors. However, half the drivers have
predicted career earnings of $5m or less, demonstrating
that the wealth in the sport is not distributed evenly.
With several of the drivers having to provide
sponsorship to secure their place on the grid, it is a stark
case of the haves and the have-nots.

Ferrari | Teams 53

Photography: Sutton-images.com

52 Teams | Ferrari

Ferrari is Formula Ones most successful


team with 16 constructors championships.
Its often had the best car as well as the best
drivers because it has the biggest budget.
There are a few goods reason for that

The secret to
success

F
Photography: Lundin/Sutton-images.com

Ferraris

Writers: Christian Sylt and Caroline Reid

ormula One is awash with gossip


and rumour. Theres constant
talk that certain teams arent
playing by the rules or that a
blind eye has been turned to the
activities of others. Its usually nothing
more than tittle-tattle but one story has
stuck around on the grapevine far longer
than the others. This is the tale that Ferrari
has a veto over changes to the sports
regulations and gets more prize money
than other teams. Its still widely said that
this is nothing more than an urban myth
but in fact thats far from the truth.
In 2012 F1 came just weeks away from
floating on the Singapore stock exchange
and the brakes were only put on the process
due to the unexpected crisis on European
financial markets. Part of the preparations
for flotation involved producing a 498-page
prospectus for potential investors and

although this was never released to the


public copies were soon in circulation
within industry circles. It shed new light
onthe sport.

Preferential treatment
If you have ever wondered whether Ferrari
really does get paid more than any other
team then the prospectus is the place to
look. Ditto if you want to know whether
F1s governing body, the Fdration
Internationale de lAutomobile (FIA), has
given Ferrari a veto over the sports
regulations. In fact, the prospectus reveals
that Ferraris influence stretches so far that
it even has first refusal on supplying cars to
race in the sports support series if the
Porsche Supercup ever vacates this place.
Itmay sound like biased behaviour but
there is good reason for Ferraris
preferential treatment.

Ferrari | Teams 55

Above and opposite: Fernando Alonso at the Spanish Grand Prix in 2013. Ferrari won on this occasion but such is the
the legendary Italian teams influence in F1 it doesnt need race victories to guarantee a nice pile of prize money

The big news comes on page 179 of the


prospectus, which covers the terms of the
teams contracts to race in F1. It states,
In respect of Ferrari only, Ferrari may
terminate if the regulatory safeguards
agreed between the FIA and Ferrari do not
allow Ferrari to veto any change to the
regulations already announced or
introduced (subject to certain exceptions).
It doesnt get much more blunt than that:
if Ferrari doesnt like the regulations then it
can change them and it is the only team in
F1 that has this power. But theres more

before a single
race begins, Ferrari
gets guaranteed
prize money of
close to $100m

the prospectus, and reports by financial


analysts, also reveal that Ferrari gets more
prize money than any other team.

Money matters
Page 176 of the prospectus covers the teams
financial benefits, which for most of them
means a share of F1s prize fund. This is
comprised of 47.5% of F1s profit, which is
known in the trade as Earnings Before
Interest, Taxes Depreciation and
Amortisation (EBITDA). The top 10 teams
in the standings share this but the
prospectus reveals that Ferrari, McLaren
and Red Bull Racing get an additional
payment. This is because theyre what are
known as Constructors Championship
Bonus (CCB) teams The top three Teams
determined primarily on Events won in the
four seasons prior to 2012.
The prize for this success is that in
addition to getting prize money for being in

the top ten, Ferrari, McLaren and Red Bull


Racing share the greater of 7.5% of our
Prize Fund EBITDA, and US$100 million
(the CCB Fund). Ferrari is third in the
ranking based on races won in the four
seasons prior to 2012 and, according to
page 176 of the prospectus, this sees the
third Team receiving 30% of the CCB Fund
(minimum US$30 million).
Page 176 of the prospectus and reports
from financial analysts also reveal that in
return for being F1s longest-standing team,
Ferrari gets the greater of an amount which
is capped at 5% of our Prize Fund EBITDA
and US$62.2 million. This gives Ferrari a
minimum of $92.2m and, in addition, it
gets a cut in the prize fund comprised of
47.5% of F1s profits.
It means that before a single race begins,
Ferrari gets guaranteed prize money of
close to $100m. Putting this in perspective,
its just a shade less than the annual budget
of the backmarker team Marussia. Ferrari
has earned it as its the only team thats
competed every year since F1 began in 1950
and has won more titles than any of its

Photography: Lundin/Sutton-images.com

Photography: Sutton-images.com

54 Teams | Ferrari

Photography: Davenport/Sutton-images.com

56 Teams | Ferrari

Above: Ferrari doesnt just benefit financially from the preferential treatment it receives from the FIA it also gets
to veto regulations it doesnt agree with

rivals. That isnt the only reason for its


preferential treatment.

Just reward
Ferrari is also the only car manufacturer
involved with F1 that directly signs its
contract to race in the sport rather than
using a subsidiary company to do so. This is
crucial because if a manufacturer pulls out
of F1 it can simply close down the company
that runs the team meaning that it cant be
pursued for damages. In contrast, if Ferrari
were to breach its contract by pulling out of
F1 the car company would be directly liable.
It gives F1 impressive security and Ferrari
is well rewarded for doing so. But its
benefits stretch way beyond receiving more
cash and control than any other team in F1.
Page 177 of the prospectus reveals that
the longest-standing team gets a right of
first refusal to run an international motor
sport series for its cars as a support event (ie,
to be included in the track programme of an
Event as a support event to the World
Championship).

Ferraris
chairman Luca di
Montezemolo even
has a say in shaping
F1s future

Ferraris chairman Luca di Montezemolo


even has a say in shaping F1s future, as he
sits on its remuneration and nomination
committees. The former approves the
policy for determining how much directors
get paid and the latter recommends which
directors should be re-appointed.

Team terms
So how do Ferraris non-financial benefits
differ to those of the other teams? On page
178 the prospectus lists the general terms of
F1s agreements with the teams and they
cover eight key areas. The first relates to
Ferrari, as it allows the team to use F1
footage in its Ferrari World theme park in
Abu Dhabi as well as two additional parks.
However, it also grants equivalent rights to
any other Team which operates a theme
park dedicated to that Team.
It moves on to cover race-specific
benefits and states, Certain Teams have
entitlements to the free transport of their
race cars and some of their equipment and
spare parts to and from the races outside
Europe. It adds, Each Team shall be
entitled to receive all requested passes to
each Event and truck and motorhome space
in the paddock at each Event. Likewise,
each has the right to display its Team name
above its garage entrance and its official
Team emblem on its trucks admitted to a
circuit and its motorhomes admitted to the
paddock at each Event.

More interestingly, at the races, each team


has the right to buy tickets to the Paddock
Club corporate hospitality area and receive
a rebate or commission of 10% on all
Paddock Club admissions purchased and
paid for by that Team or any of its exclusive
team sponsors. Teams or their licensees
also get access to sell their merchandise at
each race and are entitled to a 10% discount
on the fee charged for the rental of
concession space.
The remaining two benefits apply to
teams that are fortunate enough to win.
Whenever a team gets on the podium it has
the right to put on its website, for seven days
following the Grand Prix, a 15-second edit
of its highlights from the race. Finally, any
team which has won a Grand Prix under its
current chassis name has the right to put on
its website for the seven days before the race
a 30-second edit of its winning highlights.

Top dog
Ferrari has a unique status and the benefits
under its Team Agreement reflect this. The
perks on offer to its rivals are nowhere near
as impressive and generally cover the basics
that any team needs to compete.
Ferraris veto over the regulations is at the
top of the list of its benefits and its here to
stay until at least the end of 2020 as that is
when the teams F1 agreements expire.
Although theres now no doubt about
Ferrari having a veto, the next matter of
great speculation is sure to be whether it has
used it. The answer to that question isnt in
the prospectus, so F1s rumour-mill wont
run dry just yet.

F1 evolution | Future 127

Photography: Sutton-images.com

Photography: Tata Communications

126 Future | F1 evolution

racing into
the future
Formula One has been evolving ever since
it launched in 1950. We take a look at what it
still has ahead of it
Writer: Christian Sylt

n November 2011 Bernie Ecclestone


signalled that significant change was
on the horizon when he revealed to
this author that he had been advised
to float Formula One on the
Singapore stock exchange. The news was
printed in the Daily Telegraph and it sent
shock waves around the world of
motorsport. Not only would it enable fans
to buy shares in F1 but it would also mean it
had to lift the lid on its finances and future
plans as part of the mandatory disclosure
process when floating any business.
Although F1 hasnt yet listed on the stock
market, it still plans to do so and the impact
of its preparations has already been felt.
Once a company is floated, its directors

have to try to appease shareholders by


constantly increasing revenue and profits.
In the case of F1 this is largely governed by
one factor the number of races on the
calendar. Each race gives the business
revenue from its hosting fee as well as
trackside advertising and corporate
hospitality during the event. The more races
there are on the calendar, the more F1 can
charge for television fees but there is a limit
on this.

Increased race numbers


Getting on to the F1 calendar is no mean
feat as Ecclestone has committed to hosting
no more than 20 races per year to limit the
amount of time that teams are away from

home and to cut their travel costs. This limit


can be exceeded with majority consent
from Ferrari, McLaren and Red Bull Racing
and it looks like 2014 will be the first time in
F1s history that there will be more than 20
races. If the sport floats, its highly likely
that the number will increase further and
the waiting list is understood to include
Argentina, Hong Kong, Poland, South
Africa and even cash-strapped Greece.
The ones that get on the calendar will
probably be street races as it costs less and
takes less time to get them off the ground
than building a circuit from scratch. They
also show-off local landmarks and dont
leave a white elephant of a venue when the
race contract comes to an end.

Opposite: F1 is increasingly moving into the pay-to-view TV market


Above: Tata Communications, whose MD and CEO Vino Kumar is pictured here alongside Ecclestone, has signed a technology deal with F1, paving the way for live race streaming

More pay TV broadcasters


Perhaps ironically, the races in future may
not be seen by as many viewers as currently
watch the sport. F1 is now the worlds mostwatched annual sports series with over
500m TV viewers last year. Its built up such
a strong position that Ecclestone is no
longer focussing purely on maximising
wide free-to-air coverage. Instead, hes
signing deals with pay TV channels, which
are prepared to outbid their free to air rivals
in order to use F1 as a carrot to tempt
viewers to sign up.
This trend kicked off in 2012 when Sky
Sports took over from the BBC as the UKs
broadcaster of all live races, qualifying and
practice sessions. It was followed by similar
deals in France, Italy and the Netherlands
and there may be more to come. The draft
flotation prospectus for Formula One
reveals that it will explore additional pay
television opportunities.
The higher TV fees filter down to the
teams since their annual prize money
payment comes to around 63% of F1s
overall profits. The increase in revenue
from TV fees therefore offsets a decline in
the teams sponsorship rates, which may
result from the lower audiences pay TV
channels tend to have. To prevent this from

eroding too much of the sponsors


exposure, the prospectus adds that F1 is
not permitted to contract to broadcast
events by pay television only in a country
with a significant audience if it would
materially adversely affect audience reach
in that country.

HD and 3D developments
The prospectus also reveals the
technological developments in F1 TV
production, which are on the horizon. It
states, During the months outside the
World Championship season, we work on
refurbishing our equipment and systems
and on further technological developments
and enhancements. Some of the
innovations we are developing include an
HD on-board camera, a multi-channel
format with different views of the track and
an interactive 3D replay function.

Some of the
innovations we are
developing include
an interactive 3D
replay function

Online streaming of races


Even the way F1 is watched may change as
its considering a radical shake-up of its
broadcasting model, which would make
races available live online at the same time
as them being shown on television.
At the moment, the rights to broadcast
races online lie with each of Formula Ones
broadcasters and they have to ensure that
the footage cannot be viewed outside their
home country, as it could reduce TV
viewing figures elsewhere.
However, the prospectus states that
Formula One is considering removing the
online entitlement from each broadcasting
contract so that it could charge viewers to
watch races live on its own website
www.formula1.com.
It says that F1 is in the initial stages of
developing our digital media assets. The
right to stream races online is typically
licensed out to our broadcast partners
around the world but we may consider
changing our model and exploiting them
independently in the future. As the
exclusive rights holder to the World
Championship, we have the benefit of
controlling both our online platform
andcontent, which gives us a wide
rangeofopportunities to monetise

F1 evolution | Future 129

Online streaming should increase F1s reach


and its planning other manoeuvres to drive
popularity. One of the biggest untapped
markets is the United States. The US Grand
Prix returned to the calendar in 2012 after a
five-year hiatus and another race is being
considered in New Jersey. This has
struggled to raise funding and F1s low
profile in the US doesnt help with that. The
prospectus reveals that F1 is considering
launching an American version of F1s
junior series GP2 or GP3 in order to foster
local talent and interest.

regulations will
force teams to
switch from 2.4-litre
V8 engines to 1.6-litre
turbocharged V6s

Above: Jacques Villeneuve in his BMW Sauber in 2005.


Ecclestone believes BMW will return to F1
Below: Within F1 circles, Red Bull team principal Christian
Horner is being touted as the man to replace Ecclestone

Above: Round 10 of the 2013 GP2 series. F1 is considering launching an American version to foster local talent

This expansion has the working title of


the Americas Series and, if given the green
light, it will feature races in the United
States, Canada and Brazil. The aim is to
stimulate the development of grass roots
motorsports in these countries and
generate publicity for F1 so that it
eventually attracts more local drivers.
According to the prospectus, F1 believes
that it will eventually be able to develop its
business in North and South America to a
level comparable with that in its traditional
European base.

More car manufacturers


Greater presence in the US would make
Formula One more appealing to local
brands looking for national and
international promotion. However, it also
needs the right assets and when it comes to
car manufacturers that means the best
platform to showcase their technology.
In 2014 F1s regulations will force teams
to switch from the current 2.4-litre V8
engines to more environmentally friendly
1.6-litre turbocharged V6s. The move levels

the playing field, as all manufacturers will


have to start from scratch. The efficiency
has already attracted Honda back to
Formula One because it will become
McLarens engine partner in 2015. It might
not be the only one.
In May Ecclestone told this writer that he
would be surprised if we dont see BMW
again. BMW bought Switzerlands Sauber
team in 2005 and spent an estimated 505m
on its bid for F1 victory. It only won one race
and BMW ended up selling the team back to
its founder Peter Sauber.
Ecclestone added, I think they could
come in. The amount of money that they
spent was not significant in the grand
scheme of things. It makes sense for them
toreturn.

Life after Ecclestone


Ecclestones importance to F1 cannot be
understated, particularly since he has no
successor and turned 83 this year. In
November 2012 the boss of the Australian
Grand Prix revealed that he will step down
when Ecclestone gives up the driving seat

and warned that it could trigger an exodus


of top race managers.
Ron Walker, chairman of the Australian
Grand Prix said, There will be a number of
promoters who will retire when Bernie
retires but I firmly believe the races will stay
with the countries. Promoters have a very
special relationship with Bernie. He is more
of a friend than a business colleague and
they are reaching the same age group.
When Bernie retires then I will retire as well
and a number of other long-standing
promoters that have been friends of Bernies
will do also.
Walker is a prominent Australian
businessman who was Lord Mayor of
Melbourne and chairman of the organising
body for the 2006 Commonwealth Games
in Melbourne. He adds, When Bernie goes
Formula One will change. You wont
recognise the sport after Bernie goes
because he has done it in his own way, as
unique as he can. It will be the end of an era.
A lot of people say Bernie is the greatest
sports promoter in history and he has
formed close personal relationships with
promoters over the years.
Its widely thought in F1 circles that
Christian Horner, the boss of
championship-winning team Red Bull
Racing, will take over from Ecclestone.

Names from outside the sport have


included Sainsburys chief executive Justin
King and former Marks & Spencer boss Sir
Stuart Rose.
The prospectus confirms that head
hunting agency Egon Zehnder was hired to
draft a short list of potential replacements
for Ecclestone. It reportedly includes
Richard Scudamore, chief executive of
footballs Premier League, but no one from
the list has been engaged.
F1 only has 313 staff and 10 senior
management with no deputy or chief
operating officer waiting to take over the
wheel. In 2011 David Campbell, the former

European chief executive of entertainment


group AEG, was hired to run Formula Ones
corporate hospitality division. He was
tipped as a successor for Ecclestone but left
F1 after just over a year.
The business is too small to have a
successor lurking in the ranks. The
successor almost certainly has to come
from externally, says a source close to
Formula Ones largest shareholder, the
private equity firm CVC. Any change
presents probably the greatest threat to
thefuture of Formula One, so thankfully,
despite his age, Ecclestone shows no signs
ofslowing down.

Photography: Sutton-images.com

Americas junior series

Photography: Capilitan/Sutton-images.com

ourrights, including through internal and


third party solutions.
It adds, Well continue to enhance the
digital experience over time for our fans by
exploring new opportunities, including
allowing access to premium digital content
as well as adding additional language
options to our website.
It wouldnt take a great deal of time to
implement the plan because 56 out of F1s
63 broadcasting contracts expire before the
end of 2015. Each contract typically has a
duration of between three and five years.
Competition law in the European Union
stipulates that the contracts have to be
limited to five years in countries where a
race takes place and three years elsewhere.
The catalyst for the Formula One Group
considering this new approach was its
signing of a sponsorship deal with Tata
Communications in February 2012. Tata
became F1s official technology supplier
and the deal paves the way for live online
streaming of races to a similar standard as
those broadcast on TV.
One of Tatas biggest strengths is that it
has the largest network of undersea cables
in the world. This allows it to transmit data
at a far higher speed than by using satellites,
as F1 previously relied on, and it also
significantly increases capacity.
Tata plugged F1 into its network soon
after the deal began and it now has fixed line
connectivity at all Grands Prix. A trial of
cable delivery took place at the 2013
Singapore Grand Prix when Tata sent a live
video feed of one of the practice sessions via
its global fibre ring back to F1s TV nerve
centre in Kent.
Importantly, the cable network is
alwaysconnected, unlike a satellite thats
only on for several hours at a time, and it is
bi-directional. This allows individuals to
demand specific content and potentially
interact with it in future. So online
streaming of races may be just the first step.

Photography: Kalisz/Sutton-images.com

128 Future | F1 evolution

Future of F1 teams | Future 111

110 Future | Future of F1 teams

Refuelling
Formula One
Over the four years to 2011 the annual prize money payment
banked by Formula Ones teams accelerated by $450.5m to
$698.5m. It is expected that the 2012 total hit a record $751.8m
so why are more of the teams now at risk than ever before?
Writer: Christian Sylt

ew sports are infused with as


high-octane a mix of glitz,
glamour and excitement as
Formula One. The drivers are
superstars who risk their lives
driving at over 200mph in some of the
worlds most exotic destinations. For
celebrities the pre-race grid is the place to
see and be seen. It has driven F1 to become
the worlds most-watched annual sports
series, with over half a billion television
viewers last year. It has also given it a
powerful financial engine.
While growth of most major sports
series stalled during the recent economic
downturns, F1 accelerated. Its revenues
increased by an average of 9.6% annually
over the eight years to 2011 when they hit
a record $1.5bn. F1s latest financial
statements are for the year ending 31
December 2011 and they show that the
revenue for the series comes from three
main sources.
Organisers of the races pay a total of
$512.1m in hosting fees with revenue from
TV rights bringing in $488.9m. Advertising
and sponsorship generates $223.6m and
corporate hospitality is the biggest single
provider of the remaining $287.7m. The
increase in revenue has been largely fuelled

Photography: Vladimir Rys/Red Bull Content Pool

by escalator clauses in many of the


contracts, which increase the amount paid
by up to 10% annually. An additional boost
has come from sponsorship this year
alone luxury watch-maker Rolex and
international airline Emirates have signed
deals to become global partners of F1. The
teams are the biggest beneficiaries of this
good fortune.

Prize pay-outs
F1s biggest single cost is the prize money
payment of 63% of its operating profit to the
top 10 teams. Yet despite this bumper haul,
more teams are at risk of going under than
at any other time in recent years. At the
end of 2012 the Spanish outfit HRT became
the first F1 team in three years to close its
doors. Earlier this year McLarens team
principal Martin Whitmarsh said he
believes that seven of the 11 F1 teams are
in such financial difficulty that they are in
survival mode.
At the bottom of the grid, it came to light
in October 2012 that the Marussia Formula
One team, which is owned by a Russian
sports car manufacturer, was in talks with
potential investors. A deal has yet to happen
and the teams chief executive Andy Webb
recently confirmed that there are still

on-going discussions with a number of


interested parties.
Marussias closest rival is Caterham,
which has scored no points since joining in
2010. Its shareholders, including Malaysian
airline entrepreneur Tony Fernandes, have
F1s worst record for performance-perinvestment which stands at an estimated
$144.6m as of October 2013 according to
industry monitor Formula Money.
Further up the rankings is Force India,
which is co-owned by Vijay Mallya,
chairman of the grounded airline
Kingfisher, and Sahara, a beleaguered
Indian conglomerate. Reports in early 2013
suggested that Sauber, Force Indias Swissbased rival, was for sale. The need for new
investment seemed to fade when Sauber
signed sponsorship deals with three
Russian companies in June, but it isnt clear
how much money is being provided or how
long it will plug the teams shortfall.
Over the past year Mercedes has
offloaded 40% of its team to motorsport
entrepreneur Toto Wolff and triple F1
champion Niki Lauda. Wolff came from
Williams, which is F1s third most
successful team by championships won, but
has fallen from grace over the past decade.
An estimated 33% of Williams revenue

Future of F1 teams | Future 113

Photography: Charles Coates/LAT Photographic

112 Future | Future of F1 teams

Above: The financial cards are stacked against teams like Caterham that rank lower down the standings
Opposite: Advertising and sponsorship is one of F1s three main revenue sources. Here DHL branding is painted onto the track

comes from a sponsorship deal with


Venezuelan oil company PDVSA, which is
understood to have been endorsed by the
countrys late president Hugo Chavez. It
raises the question of how long that revenue
stream will last.
The sale of a stake in Mercedes is not the
only deal thats been done recently. In May
this author revealed that property
developer Andrew Ruhan had taken a 2%
stake in the Lotus F1 team. The following
month the team distributed a press release
trumpeting that it has new part-owners as
of today but in fact this was not the case. It
claimed that investment group Infinity
Racing had bought a 35% stake in Lotus but
several weeks after the press release had
been written, Gerard Lopez, the founder of
Genii Capital, the investment fund which
majority owns the team, revealed the shares
had yet to change hands.
The state of Lotus finances finally
became clear over summer when I also
revealed that the team had made a net loss

teams are run to


break even. bosses
spend whatever is
available in pursuit
of victory

of 56.8m in the year to 31 December 2012.


It was followed by claims from Lotus lead
driver Kimi Rikknen that his pay cheque
was late and he promptly switched to
Ferrari for 2014.
That leaves just Ferrari, McLaren and Red
Bull. There is good reason why these three
are secure and it partly explains why their
rivals are at risk. F1 operates by the precise
opposite principles of major US sports
leagues, which offer badly performing
teams the first choice in the post-season
draft. The purpose of this is to even out the
field, but in F1 the top performers get the
highest financial rewards. This cements
their power because winning F1 races is so
closely connected to having a high budget.
At one end of the spectrum, Red Bull
received around $87m in prize money for
winning the championship in 2012, and
HRT got nearly nine times less for finishing
last. The 63% prize money payment is
comprised of three elements. The first is a
47.5% share of F1s operating profits, which
is divided into two with half going to the
top 10 equally and the other half split
between them depending on their position
in the standings.
However, in addition, Ferrari, McLaren
and Red Bull Racing share a dedicated
annual prize fund of at least $100m. This
is because they are what are known as
Constructors Championship Bonus (CCB)

teams the top three based on races won in


the four seasons prior to 2012. As the only
team which has been in F1 since the series
started in 1950, Ferrari also gets its own
further annual prize payment of at least
$62.2 million.
This puts the lower ranking teams at a
financial disadvantage although the
income, which is split equally between the
top 10 teams, gave each of them $28m last
year, which alone is far from insignificant.
The reason it isnt enough is that the teams
have a business model that is unusual, to
say the least.

Not for profit


Most companies want to make a profit
first and foremost, but not F1 teams. They
are generally run to break even, meaning
that they make neither a profit nor loss.
This involves the team bosses spending
whatever is available and they do it in
pursuit of victory. The theory is that it is
better to win on track and make no profit,
rather than make money and finish low
down the standings.
Spending all the money available to them
means that it is hard for teams to build up
cash reserves, and it also makes it tough for
them to scale down during an economic
downturn. Even F1s chief executive Bernie
Ecclestone has acknowledged the problem,
and conceded at the end of September, We

Photography: Davenport/Sutton-images.com

are talking about two vulnerable teams at


the moment.
The upshot is that sponsors gravitate to
Ferrari, McLaren and Red Bull because there
is more chance they will win races due to
having the biggest budgets. At the end of
2012 luxury car manufacturer Infiniti
became Red Bulls title partner, and since
then parcel service UPS has inked a deal
with Ferrari. They are the exceptions.
F1s sponsorship prices reflect its status
as the worlds most-watched annual sports
series, with the average cost of a deal being
around $3.7m annually. It means that
during a boom period F1 attracts the most
well-known brands, but when they cut
marketing budgets during a downturn they
are put off by the high cost. Major brands
such as Rolex and Emirates are now signing
deals to become official partners of F1,
rather than team sponsors, because it offers
lower risk.
Brands lose exposure if the cars of the
team they sponsor crash or are slow and are
therefore not covered on TV as much as
their rivals. In contrast, sponsors of F1 itself
get huge billboards at the tracks, which give
guaranteed exposure. They are usually
located on corners where cameras follow
the most exciting racing moves and no
other billboards are present. Logistics firm

DHL even gets access to specific drivers


through its sponsorship of F1 as it presents
an annual award to whoever gets the fastest
lap. It explains why DHL moved from being
a team partner to sponsoring F1 in 2004, a
deal which it extended for several years
earlier this year.
It is a good sign that companies of that
size are making substantial investments,
says Zak Brown, chief executive of leading
motorsport sponsorship agency Just
Marketing. I dont think you can look at
many other sports and see companies of
that stature making those levels of longterm investment.
He adds, In the pit lane everyone is a
competitor. The more competitors the
more anxiety there is. Who would want to
be in a competitive pitch against Bernie?
As he points out, the teams cant do without
the financial support.
It takes a lot of money to make these cars

brands sign deals


to become partners
of F1, rather than
team sponsors, as it
offers lower risk

go round and budgets are not getting


smaller. Therefore there is a greater thirst
and those that dont get sponsorship find it
difficult. Brown explains, Motorsport,
unlike a lot of other sports, has a greater
thirst for sponsorship and has a bigger
revenue model based on that. There is
probably never enough money to go around
so everybody feels like they are doing great.
Because the smaller teams cant depend
on sponsorship or prize money they
increasingly have to resort to hiring drivers
who pay to race, which has led to criticism
that it dilutes the quality of the field.

Rich get richer


It is all down to F1s decision to give the top
performers the richest rewards, which may
sound a dreadful idea because it means that
the same teams are the most likely to win.
However, in fact it secures the sports future.
Except for Ferrari, McLaren and Red Bull,
the majority of F1s teams have changed
names over the past five years alone so
havent built up as much goodwill with
fans. F1 has not been damaged by their
changing identities and this is largely
thanks to the performance of its most wellknown names. So, ironically, if F1s
revolving door keeps on turning, that is not
necessarily a bad thing.

Eco engines | Teams 115

114 Teams | Eco engines

F1 goes
green
The 2014 season will see the biggest change to Formula
Ones engine regulations for nearly a decade. The
impact has already been felt
Writer: Christian Sylt

Photography: Daimler

n May 2013 the world of Formula One


was caught by surprise with the
announcement that in 2015 Honda
will return to the sport, replacing
Mercedes as the engine supplier to
the McLaren team. Hondas previous
involvement with F1 was as a team owner
but it threw in the towel in 2009. The team
was sold to its management after the
Japanese manufacturer had only managed
to win one race, despite spending an
estimated $1.5bn over five years.
It was an ignominious end to Hondas F1
foray and many observers believed it would
be a long time before it returned. However,
theres good reason for it coming back
sooner than expected.
Formula One has never been
environmentally friendly. Lining up at
every race are over 20 cars powered by V8
engines revving to 18,000rpm. Fuel
consumption is around the 4mpg mark,
which is less than 10% of the fuel economy
of a typical road car. Each race is around 190
miles on average and there were 19 this year.
It all adds up and the net result is that F1

engines are far from green. However, the


sports governing body, the Fdration
Internationale de lAutomobile (FIA), is
trying to steer them in that direction.
Indeed, its betting F1s future on it.

High stakes
A huge amount of money is at risk. In 2011
Mercedes spent 116.4m on its F1 engine
division. The engines material costs are
believed to make up at most only 10% of the
total amount invested in them, with the
remainder being spent on development.
The engine is a put under such stress that
it needs to be bolted to the carbon fibre
body and have the transmission and rear
suspension fixed to it in turn. It therefore
has to be extremely strong but also as light
and compact as possible. Adding to the
complication, the engine needs to be
mounted in as low a position as possible to
help lower the cars centre of gravity and to
enable the height of rear bodywork to be
minimised, which in turn reduces drag.
Maintaining the balance between
engine strength and weight at the same

Eco engines | Teams 117

Photography: Sutton-images.com

Photography: Daimler

Photography: Daimler

Photography: Daimler

116 Teams | Eco engines

time as optimising its location in the car is


ultimately why F1 engines are so expensive
to produce.
The bulk of development work is done
during the year before the cars are
launched, so the 2014 engines are already
well in development even though the 2013
season has only just come to a close. Its the
end of an era.
The current 2.4-litre V8 engines, which
have been standard since 2006, will next

The current 2.4-litre


V8 engines will next
year be replaced by
more efficient 1.6l
turbocharged v6s

year be replaced by more environmentally


friendly 1.6 litre turbocharged V6s. Theyll
be the most efficient engines that the sport
has ever seen and this was the driving force
behind Hondas decision to return to F1.
At the announcement Takanobu Ito, the
chief executive of Honda Motor Company,
said, The new F1 regulations with their
significant environmental focus will inspire
even greater development of our own
advanced technologies, and this is central
to our participation in F1.
He added, We have the greatest respect
for the FIAs decision to introduce these new
regulations that are both highly challenging
but also attractive to manufacturers that
pursue environmental technologies.
The rev limit of the new engines will be
reduced to 15,000rpm but thats just the
start. Theyll also comprise a greatly

enhanced version of the current recovery


systems, which convert energy created
under braking into a boost on acceleration.

Out with the old


The systems in use at the moment only
derive power from the rear axle, giving a
boost of 70bhp for seven seconds a lap.
However, next year the devices will also be
driven by heat from the exhaust, giving a
161bhp boost for 33.3 seconds a lap. The
emphasis on energy recovery reflects the
increasing popularity of hybrid vehicles,
and the idea behind the new rules is to align
F1 more closely with the direction the
motor industry is taking. Even fuel
economy has been improved.
Next year a 30% increase in efficiency
will see cars being limited to using 100kg
(around 140 litres) of fuel per race. So, just

Opposite: McLarens current engine is a Mercedes


2.4-litre V8 revving to about 18,000rpm
Top: In 2011 Mercedes spent 116.4 million developing
and honing its Formula One engines
Bottom left: At present F1 car fuel consumption is about
4mpg thats set to improve by 30% next year
Bottom right: Bernie Ecclestone is concerned the new
engines will sound too different from the old ones

as manufacturers of road cars constantly


strive to produce models that do more miles
per gallon, from next year F1 engineers will
be chasing as much power as possible from
a given amount of fuel.
Manufacturers are in talks about how to
communicate the fuel usage to television
viewers, but they may face an even bigger
challenge engaging spectators at the track.

Different sound
The changes to the regulations were first
announced in December 2010 and
originally the replacement was due to be a
four-cylinder, 1.6-litre turbocharged
engine. It faced immediate criticism over
fears that it would sound so different to the
current engines that fewer fans would visit
the races. F1s distinctive sound is one of its
unique selling points, and the sports boss

Bernie Ecclestone was so concerned about


losing it that he said he may have to sue the
FIA. He believed the decision to introduce
the new engines breached his contract with
the governing body, and he wasnt the only
one who voiced concerns.
In June 2011 F1s race organisers took
the historic step of forming a union the
Formula One Promoters Association
and promptly threatened to switch to the
rival US IndyCar series if the engine sound
changes in 2014. The following month
the FIA improved the specification to
the turbocharged V6s, and although the
promoters were pacified, Ecclestone still
has concerns.
However, he says, The engines are fixed
now, like it or not. We have got what we
have got, so we have to keep our fingers
crossed. The wait will soon be over.

Hospitality | Lifestyle 159

158 Lifestyle | Hospitality

Entertainment
in the
fast lane
Formula One is one of the
worlds wealthiest sports so it
needs an incredibly discreet
and high-level environment to
entertain its investors. Thats
exactly what it has got
Writer: Caroline Reid

Photography: Lundin/Sutton-images.com

t may seem like the biggest decisions


in Formula One are made on track,
but in fact the most powerful people
in the sport are found behind the
scenes in what is known as the
paddock. It officially consists of five
different zones: the garages, the pitlane,
the starting grid, the transporters and the
motorhomes. Passes with different degrees
of privilege are required to gain access to
each area and around 500 people can get
into all of them.
Six times more passholders have access
to just the motorhomes area and, as well as
being Formula Ones nerve centre, this is
where celebrities smooch with teams to get

as close to the action as possible. The


motorhomes are equally glamorous.
The first F1 transporter was used in the
1970s when Formula One boss Bernie
Ecclestones Brabham team converted a
hotel companys training vehicle and
painted it in the red stripes of its most
prominent sponsor, drinks brand Martini.
Brabham also added its own plush
hospitality unit another F1 first, which
started a trend that endures to this day.
Motorhomes are used for all the
European races, but at long haul events the
teams are still located in permanent offices
at the circuits just like in the bad old days.
The teams use their motorhomes to seduce
sponsors in an even more intimate
environment than F1s hospitality area, the
Paddock Club. Behind their closed doors
million dollar deals are done.

Pecking order
Motorhomes are positioned according to
the teams performance in the previous
year. Ecclestones two-floored motorhome
with its blacked-out windows heads the
paddock and lines up with the transporter
trucks that face the motorhomes at most
European races. The transporters back up
to the pit garage rear doors and the oblong
tarmac space between the motorhomes

Photography: Sutton-images.com

Hospitality | Lifestyle 161

Photography: Sutton-images.com

Photography: Sutton-images.com

160 Lifestyle | Hospitality

Photography: Davenport/Sutton-images.com

Photography: Sutton-images.com

Above: Entertainment is laid on for teams and guests in the opulent Red Bull Energy Station, a three-storey motorhome
Photography: Sutton-images.com

and transporters is the main paddock area.


F1 Group executive Pasquale Lattunedu is
in charge of the paddock.
The grandest of all the motorhomes is
Red Bulls aptly named Energy Station. Red
Bull owns two F1 teams, Red Bull Racing
and Scuderia Toro Rosso. Towering over its
peers, the Energy Station takes up the
teams entire allocation of spaces. The first
three-storey unit, it was unveiled at the
beginning of 2005 and looks more like a car
showroom than a motorhome.

Mobile mansion
The 210 ton, six-metre-high and 14-metrelong steel and glass curved structure has a
200-person capacity with offices,
bathrooms, two bars, two terraces and a
chillout area. Each driver has their own

the red bull


motorhome has
bars, terraces, chillout areas, swimming
pool and a dj booth

room trimmed with red leather and


frivolous frills, such as a shower with
controllable mood lighting.
The entire structure even has a
hydraulically operated roof, which shuts
the upper terrace in the event of rain. It
doesnt even cut back in the cramped
confines of the Monaco Grand Prix.
The structure sits on a series of huge
polystyrene floating platforms and houses
the front terraces, dining and chillout areas
as well as an upper deck with a swimming
pool, second kitchen and DJ booth. All of
that is built outside Monaco, in the weeks
running up to the race. It is then pulled
round to the harbour where its installed
alongside the regular F1 paddock.
When it is up and running, two
electricians and two technicians are on
duty, while catering involves five chefs. In
fact, despite being classed as a motorhome,
the Energy Station requires nine trucks to
transport it as well as upwards of 40 staff to
erect it over two days. It started a trend
McLarens motorhome is also three storeys
and is known as the Brand Center.
This is more sleek than Red Bulls
motorhome, with polished slate floors and

an abundance of brushed steel 14 trucks


are needed just to move it around and it
takes 23 technicians three days to erect it
and two to take down. There are even 16
staff in the catering team, which serves over
400 people at the most popular races.
The Brand Center is a fitting home not
just for McLaren but also the teams title
partner Vodafone, which occupies the top
floor. Below it, there are executive offices
on the second floor with the ground floor
used for entertaining.

Club class
In addition to having their own
entertainment areas, the teams also get an
allocation of passes for F1s overall
corporate hospitality area, the Paddock
Club. This is a tented structure adorned
with fresh flowers and turf that is flown in
from England before being rolled out on
site. It attracts a suitably high level of
clientle including film stars, politicians,
pop groups, models and sports stars.
The Paddock Club is split into three
distinct areas, with levels of luxury akin to
a deluxe hotel. The Village is a group of
marquees surrounding a central open

garden, each with its own patio seating area


and buffet tent. Separate marquees house
the champagne bar and various
entertainments are found in the garden.
Every Paddock Club pass includes access
to a gourmet banquet, and also a masseur,
beautician and hairdresser. A caricaturist
and card-trick artist are on hand to provide
light relief. Paddock Clubbers can take a
guided tour of the pits before the Grand
Prix and have access to the support race
paddock. Team personnel are also on-hand
to talk the guests through the weekends
developments.

The Pit Building


The second area to the Paddock Club, the Pit
Building Lounges, offers a unique chance to
support the drivers. They are a collection of
individual lounges usually located directly
above the pit lane with a privileged view of
the main straight and the pit lane. When the
drivers enter the pits, the more passionate
Paddock Clubbers can lean over the guard
rails and cheer them on.
The Pit Building Terrace is a collection of
suites above the pits. They are often one
storey higher than the Pit Building Lounges

Top left: The Marussia team motorhome is relatively modest compared with some others
Top right: The sleekest F1 motorhome on the circuit has to be McLarens three-storey construction
Bottom left: Bernie Ecclestone started the trend for plush hospitality motorhomes in the 1970s
Bottom right: Inside the spacious Williams F1 motorhome; each driver has their own luxurious office

and afford panoramic views of the pits and


circuit. It is the roof of this structure which
often features prominently in views of the
track filmed with helicopter cameras.
The Paddock Club keeps F1s wheels
turning as the teams give their passes to
sponsors, which in turn use them to indulge
their own clients in the opulent
surroundings. Keeping sponsors sweet
increases the chance they will renew their
deals, and the teams themselves also give
passes to brands that are not yet involved
with F1 in order to tempt them to sign up.

Keeping sponsors
sweet in the f1
paddock increases
the chance theyll
renew their deals

Tickets are on offer to the public but at a


cost of around $4,000 each, theyre out of
reach for most.
Theyre not expensive for the sake of it.
Setting up the Paddock Club at a typical
Grand Prix requires transporting by road,
air or ship 16km of cables, 77,000 pieces of
cutlery, 40,000 glasses, 30,000 plates, 20
tons of ice, 90,000 litres of water, 5,500
magnums of champagne, 10,000 cut
flowers, 3,000 flowering plants and 200
tons of tent material.
Hundreds of workers are involved at each
race, including catering staff, electricians,
security, entertainers, therapists and
florists. Security, construction, logistics
and catering tend to be handled by the same
contractors throughout the season,
meaning the teams and sponsors know
what they will get at any race, no matter
where in the world it is held. As a global
brand, F1 couldnt do without it.

Pay drivers | Drivers 83

Photography: Sutton-images.com

82 Drivers | Pay drivers

Pay as
you go
Theres a stigma attached to pay
drivers, but they have once more
become a significant presence in
the sport. Is it time to re-evaluate
their contribution to F1?
Writer: Caroline Reid

Photography: Sutton-images.com

ention the words F1 driver and the image that they conjure
up to many people is of a man who has it all, courted by
leading teams who are willing to lavish millions of dollars
on him so he can indulge his love of the high life as he jets
around the world enjoying the ultimate luxuries. But for
many drivers on the grid in 2013 it is a different story. Rather than focusing
on spending their wages they will instead be scraping together every last
penny to support a career at the tail end of the grid. However, it isnt so long
ago that it looked like pay drivers had been banished to the sports history
books. So how did this aspect of F1 go into reverse?
Back in the formative years of F1, it was normal to see privately wealthy
drivers behind the steering wheel. There was no real sponsorship in those
days and drivers were often amateurs who required another source of
income to fund their racing around the world. After F1 became more

Pay drivers | Drivers 85

84 Drivers | Pay drivers


commercialised in the late 1960s the scene
shifted, but some of the slower outfits
would still look to drivers who could bring
the best sponsorship package with them to
the team. By the 1990s, pay drivers had
become figures of fun. They were
epitomised by Japans Taki Inoue, a cult
figure who never scored a point and once
got run over by the medical car, and rich
kids like Pedro Diniz, the handsome son of
a Brazilian supermarket magnate who
brought with him seemingly infinite cash
from brands stocked in the family shops.

Previous page: Renault was accused of signing Vitaly Petrov more for his sponsors than his talent
Above: Taki Inoue was a cult figure in the 1990s who never scored a point on the race track

standard of drivers at the leading teams. But


now even drivers who might previously
have secured a seat on their own merit were
being chosen on the quality of their backers.
When Williams dropped promising Nico
Hlkenberg in exchange for well-backed
Venezuelan Pastor Maldonado in 2011,
many F1 fans saw it as a sign of the sport
heading in the wrong direction. Although
Maldonado was GP2 champion in 2010,
he had achieved this after running for a
lengthy four years in the series with an
estimated $3m of personal sponsorship
behind him, which gave him a distinct
advantage over his rivals. What was more,
his Venezuelan backers were contributing
an estimated $50m to the team in the form
of sponsorship from state oil company
PDVSA and Venezuela Tourism.
Williams was keen to avoid the stigma
of the pay driver label with then team
chairman Adam Parr stating that he felt it
was repulsive and irrelevant. He added,
We have never sat a driver in our car who
we did not think was ready for F1, deserved
to be in F1 and was capable of delivering.
The guy has just won the GP2
championship with a rookie team, winning
more races than anyone else. The mere fact
that we have to talk about this is absurd.

several drivers at
the back of the grid
bring sponsorship
or cash in exchange
for their seats

It echoed the sentiments of the Renault


team when they too had been confronted
with accusations of valuing cash over
talent. When the team signed inexperienced
Russian Vitaly Petrov in 2010 it was quick to
emphasise that his contribution was more
than just monetary. Team principal ric
Boullier stressed that we actually had
drivers who could have brought twice the
amount Vitaly is bringing with him while
owner Gerard Lopez claimed that although
Petrov was not a paying driver in his
mind, he admitted that the sponsors that
he brought or that came have been very
good sponsors.

Maldonado makes it
At first it looked like Maldonados
detractors were right because he scored
only one point in his first season and
developed a reputation for crashing out.
But then in 2012 everything changed. At
the Spanish Grand Prix, Maldonado sailed
to a commanding victory, Williams first
since 2004. It seemed that finally the pay
drivers had been vindicated.
Maldonado wasnt the only one to
impress. Although Mexicos Sergio Prez
was widely accepted as a star of the future
when he joined F1 in 2011, even he brought
his Sauber team a stack of cash from
Mexico. His backers, including telecoms
giant Telmex and Cuervo Tequila, brought
the Swiss team an estimated $42m in 2011
and $49m in 2012. This didnt stop him
from being seen as one of the best young
drivers on the grid and securing a soughtafter seat with McLaren for 2013.
However, to many the pay driver label

Photography: Sutton-images.com

Above: Promising driver Sergio Prez brought an estimated $42m of sponsorship to the Sauber team when he was signed in 2011
Below: Williams was vindicated for signing Pastor Maldonado when he decisively won the Spanish Grand Prix in 2012

still automatically equates to a young driver


with little talent and a big wallet, and it is a
phrase that teams are quick to deny. It can
encourage a public perception that the team
is desperate for cash to the extent that it is
willing to sacrifice sporting prowess to
scrape together a few million dollars more.

Reality vs rumour
The reality is not quite so clear cut. If a team
has no chance of making it off the back of
the grid, it doesnt need to worry about how
talented its drivers are, but higher up the
grid a few points or podiums brought in by a
talented driver can mean millions of dollars
more in prize money and sponsorship. A
balance between sponsorship and talent
has to be found.
This is the reason that many of the new
breed of pay drivers come with impressive
CVs. Their financial backing serves to make
them more attractive than their similarly
qualified rivals, and its not difficult to see

why they are snapped up by teams looking


to fill a hole in their budget.
The main problem that F1 faces with the
return of the pay driver is that if even
talented drivers have to bring sponsors to
get a foothold in the sport, there is a very
real chance that a star talent will fail to
break into F1 if he doesnt have the budget
to match his skill.
But for the drivers that do make it onto
the grid they get to showcase their talents
in front of F1s power brokers and to
become salaried stars themselves later
in their career. And despite lingering
memories of wealthy failures, its certainly
not impossible for a pay driver to make it to
the very top of the podium.
After all, seven-times world champion
Michael Schumacher paid the Jordan team
$150,000 for his first drive back in 1991. He
made that back in salary and endorsements
more than 4,000 times over in the following
two decades.

Photography: Lundin/Sutton-images.com

By the mid 2000s it looked like pay drivers


were becoming a thing of the past. As F1s
global fanbase boomed, interest in the sport
grew in the corporate world, and at one
stage there was only one team on the grid,
Williams, that was not owned by either a
car manufacturer or a billionaire.
Then came the global economic crisis.
En masse, the car manufacturers exited the
sport and were replaced in 2010 by new
smaller teams who were often either not
willing or not able to pay big money to their
drivers. As spending by team owners
plummeted from $1.6bn in 2008 to $611m
in 2010, teams were forced to look for new
sources of funding to stay in the sport.
The driver line-up is now one of stark
financial contrasts. According to Formula
Money estimates, a total of $129.65m was
spent on driver salaries during the 2012
season, but a massive 84% of that ended up
in the pockets of just six drivers Fernando
Alonso, Lewis Hamilton, Sebastian Vettel,
Felipe Massa, Michael Schumacher and
Jenson Button. Alonso is also the best paid
driver of all time, with a record annual
salary of $40m from Ferrari.
At the back of the grid it was a very
different story as several drivers chose to
forego salaries and instead bring cash or
sponsorship to their teams in exchange for
their seats. Still more were paid a token
salary to race as their home sponsors
decorated their teams cars. Formula Money
calculates that in 2012 there were four
unsalaried F1 drivers and 11 drivers who
were paid less than $1m. All but one of
these 15 drivers competed for the majority
the season. This contrasts sharply with
2009 when there were no unsalaried drivers
and only eight drivers were paid less than
$1m, five of them racing for less than half
of the season.
As a result the average driver salary fell
from its 2008 high of $7.8m to $5.2m in
2012, and some talented drivers found it
difficult to get a seat if they didnt have the
budget to match their results. In the words
of Spains Jaime Alguersuari, who lost his
drive in F1 for the 2013 season, F1 has
become an auction.
Yet the nature of the new breed of pay
drivers was in some ways very different to
their predecessors. The pay drivers of the
1990s had been largely well below the

Photography: Sutton-images.com

Corporate growth

Rich list | Lifestyle 131

The
rich
list

F1 is a rich mans game and its not


even the multi-millionaire drivers
who are raking it in the most

hoever wins on track at any given race, one


thing is certain: Bernie Ecclestone is the real
victor in Formula One. The 83-year-old Formula
One boss is the richest man in the sport that he
transformed into a global phenomenon, with a
fortune worth more than 6bn.
The true extent of Ecclestones fortune was revealed in a German
court case in 2011. F1s former chairman, German banker Gerhard
Gribkowsky, was on trial accused of taking a 29.5m bribe to
undervalue F1 when it was sold to investment firm CVC in 2006.
Ecclestone admitted making the payment but denied it was a bribe.
He told the court instead that he had been blackmailed by
Gribkowsky who had threatened to make false allegations about
Ecclestones family trust to the taxman. This, Ecclestone said, could
have left his family with a tax bill of a massive 2bn.
Assuming a tax rate of 40%, this means that the Ecclestone family
trust contains assets worth a huge 5bn. Over half of this is from the
sale of stakes in F1 with the rest believed to come from Ecclestones
wide range of other investments, including Asian shopping centres
and a hotel in the Swiss resort of Gstaad.
Ecclestone still owns 5.3% of F1, with another 8.5% in the hands
of his trust. The value of these stakes together is worth 940m.
Other assets bring the total family wealth to 6.2bn. This puts
Ecclestone way ahead of Red Bull energy drink founder and team
owner Dietrich Mateschitz, who is worth a mere 4.8bn.
The Formula One Rich List shows why F1 has a reputation as a
sport for the super rich. Even the poorest person on the list team
boss Frank Williams is worth 130m.
There are six British personalities on the list, plus three
Malaysians, two Italians, two Americans and one person each from
Austria, France, Australia, India, Luxembourg, Spain and Finland.
No women make it onto the list in their own right and 16 of the 20
men are over 50 years old.

Writer: Caroline Reid

Ecclestone is not the oldest person on the list. That honour goes
to 86-year-old Red McCombs, the Texan owner of the United States
Grand Prix venue Circuit of the Americas. The youngest person is
double world champion Fernando Alonso, who at the age of just 32
has made 170m from F1.
There are nine team owners on the list, four people involved in
the running of the sport, five circuit owners or managers and only
two drivers. It may come as a surprise that some of the sports
biggest stars do not appear, but the wealth in the sport is largely
concentrated on the behind-the-scenes power brokers. However, in
the next few years, more drivers may join the list.
Lewis Hamilton might not be one of the 20 richest people in F1 at
the moment, but he looks set to join the elite by the time his
Mercedes contract ends in 2015. Hamilton is currently worth an
estimated 89m, falling 40m short of the 130m needed to scrape
onto the bottom of the rich list. However he will be paid 60m by
Mercedes over the three years of his contract, which will boost him
into the top 20.
Unlike his previous team, McLaren, Mercedes also gives the 2007
world champion more freedom to sign up personal sponsors, which
could add up to 7m a year onto his earnings. Mercedes is also
known to pay its drivers a million dollar (700,000) bonus if they
win a race.
As a result, Hamilton can be expected to end his Mercedes
contract at the age of 30 with a net worth of 177m. This would put
him 16th on the F1 Rich List (compiled by Formula Money), ahead of
rivals Fernando Alonso and Kimi Raikkonen and just behind Lotus
owner, tech tycoon Gerard Lopez.
Together the 20 men on the list are worth 20.7bn. The list only
includes people who have an active current role in Formula One.
Ifthe list included former team owners and drivers and people with
an indirect role in the sport, then the value of the top 20 would be
higher still.

,150m
6
Bernie
Ecclestone
Formula One Group chief executive

Bernie Ecclestone is not only the richest


person in Formula One, he is also the most
powerful. A former car salesman, hes controlled
the commercial side of the sport since the early
1980s when he invented the Concorde Agreement,
the legal document that binds the teams to turn up
for every Grand Prix. This was the pint-sized
billionaires masterstroke as it made F1 more
attractive to TV stations that didnt want to pay to
show races that didnt include the big names.
By the late 1990s Formula One had become a
global phenomenon and Ecclestone sold off a
series of stakes in the sport to financial
institutions. He currently owns just 5.3% of the F1
Group, with another 8.5% held by his family trust
Bambino, but he is still very much the driving

force behind the sport and nothing happens


without his say-so.
Unlike many billionaires he doesnt have an
extravagant lifestyle. He lives in an apartment
above his Knightsbridge office and has the
milkman deliver direct to his door. He has a
private jet, but uses it mostly for work, and is
known to go round his home switching off lights
in empty rooms to save on electricity.
However, his socialite daughters, Tamara and
Petra, more than make up for his lack of
extravagance. Tamara owns a 200,000 handbag
collection and a 1m crystal bathtub while Petra
bought a 52m 14-bedroom Los Angeles mansion
in 2011, despite already owning a six-storey 56m
house in London.

Photography: Sutton-images.com

Nationality / British

2,680m

134 Lifestyle | Rich list

Dietrich
Mateschitz
owner of Red Bull Racing and Toro rosso

Nationality / Austrian

Red Bull energy drink founder Dietrich


Mateschitz is such a big fan of F1 that he owns
not just one team, but two. The sports-mad
Austrian founded Red Bull in 1984 based on
local energy drinks he discovered on a
business trip to Thailand. Over the following
three decades he has turned it into one of the
worlds most famous beverages.
He first got involved in F1 as a sponsor of
Austrian driver Gerhard Berger in the late
1980s then in 2004 he bought Jaguars F1
team, which he renamed Red Bull Racing, with
the aim of turning it into a championship

winner. Six years later his dream came true


when Vettel took the world championship.
Mateschitz also owns Laucala, an island in
Fiji, and a large collection of vintage planes,
which are displayed at Red Bulls state of the art
Hangar-7 complex in Austria. But his main
love is sport and he has driven Red Bull to
invest in four football teams and a hockey club
as well as the former home of the Austrian
Grand Prix, which he has renamed the Red
Bull Ring. In 2012, Red Bull hit the headlines
asthe main sponsor of Felix Baumgartners
record-breaking leap from space.

John Paul DeJoria


co-owner of Circuit of the Americas

Nationality/ American
Photography: Gettty/Circuit of the Americas

Photography: Sutton-images.com

4,755m

Although he is one of the richest people in F1,


John Paul DeJoria is a relative newcomer to the sport
and is little known within the paddock. The Austin,
Texas resident invested in the citys new Circuit of the
Americas, pumping in the funding needed to get
construction finished in time for its first race in
November 2012.
DeJoria made his fortune as the founder of Patron
Tequila, House of Blues nightclubs and the luxury

shampoo range Paul Mitchell. It hasnt always been


easy for him, though, as he grew up in foster care and
at one stage had to sleep in his car because he
couldnt afford rent.
His first experience of F1 came in 1995 when he
visited the Monaco Grand Prix with his wife Eloise
and her good friend Cher. He was hooked from that
moment on. His daughter, Alexis, is a top-level
dragster racer.

Rich list | Lifestyle 137

Ong
Beng Seng

Red
McCombs

Nationality / Malaysian

Nationality / American

Although he was born in Malaysia, Ong Beng Seng


known as OBS in F1 circles made his name in Singapore.
He owns large property interests in the country, which made
him the perfect businessman to fund the Singapore Grand
Prix when it came onto the calendar in 2008. He owns three
of the citys top hotels and Grand Prix weekend is one of the
busiest times of the year. Its great promotion for his assets.
In the five years that its been on the calendar Singapore
has already become known as one of the top races in F1 and
has frequently been compared to Monaco. Ongs contacts
and know-how have made this possible.
F1 brings 80,000 people each year to Singapore. They stay
in Ongs hotels, eat in his restaurants and shop in his luxury
goods stores. Plus the race is great advertising for Singapore
as the city street circuit gets beamed to half a billion viewers
around the world.
Ong isnt a one-man show. His wife Christina is an oil
heiress who owns a stake in Mulberry handbags. Their other
assets include Singapores Ferrari dealership and the Hard
Rock Hotel in Bali.
Despite his F1 interest, Ong is known locally for his poor
driving skills and once drove his Volvo into the middle of a
roundabout on a busy Singapore junction.

Texan billionaire Billy Joe Red McCombs is a late-comer to Formula


One, first getting involved as an investor in the new United States Grand Prix
venue, Circuit of the Americas, at the age of 83. McCombs made his fortune
through the Red McCombs Automotive Group chain of car dealerships, which
he set up in the 1950s. At its peak he owned 55 dealerships across America. He
then founded the Clear Channel Communications advertising and
entertainment group in 1972. Clear Channel went on to become one of the
worlds biggest media companies with a string of radio stations, billboards and
live events and McCombs cashed out his interest in 2006.
Hes a big sports fan and in 1972 bought the San Antonio Spurs basketball
team, which he guided into the top NBA league before he sold the team in 1985.
He later spent 150m on the American football team, the Minnesota Vikings,
which he sold in 2005, and owns a horse racing stud farm in Kentucky.
In 2010 he turned to F1 by becoming a major shareholder in Circuit of the
Americas in Austin, Texas. The 250m circuit has since been hailed as one of
the best venues on the calendar.

promoter of the Singapore Grand Prix

940m

1,070m

Photography: Sutton-images.com

co-owner of Circuit of the Americas

870m

Mansour
Ojjeh
co-owner of McLaren

Photography: Sutton-images.

655m

Mokhzani
Mahathir

Nationality / French/Saudi Arabian

chairman of Sepang
International Circuit

Son of the legendary Saudi arms trader Akram Ojjeh,


Mansour Ojjeh owns 25% of the McLaren team through his
TAG Group. Ojjeh became hooked on F1 after visiting the
1978 Monaco Grand Prix as a guest of the Williams team. He
led his fathers company TAG into F1 first as a sponsor of
Williams and then as an owner of McLaren.
In 1985 TAG bought Swiss watchmaker Heuer, creating
TAG Heuer, and the brand became a prominent feature in F1,
sponsoring McLaren and the on-screen timing features.
Under Ojjehs expert guidance, TAG Heuer sales rocketed
as he modernised the watchs image by using well-known
sports stars in its advertising campaigns, and in 1999 he sold
the company to Frances LVMH for 500m.
Hes a regular at F1 races and is often pictured hanging
outwith his high profile friends, such as Michael Douglas
and Catherine Zeta Jones. Ojjehs other assets include
Farnborough airport and Kogo, one of the worlds largest
private yachts.

Photography: Sutton-images.com

Photography: Sutton-images.com

136 Lifestyle | Rich list

Nationality / Malaysian
The son of Malaysias former prime minister Mokhzani
Mahathir is one of the richest and most influential men in the
country. Hes best known in F1 as the chairman of Sepang
International Circuit, the home of the Malaysian Grand Prix.
Sepang joined the calendar in 1999 and despite early
criticism from fans that the circuit was boring it remains a
fixture 14 years later.
He started his business career with Shell as a petroleum
engineer. His experience led him to set up Kencana
Petroleum, the source of most of his wealth. When Kencana
merged with another Malaysian oil company, SapuraCrest,
in 2011 it became Malaysias largest oil and gas provider and
propelled Mahathir into the league of the super-rich.
He admits he is hooked on fast cars and is a keen
amateur racing driver. He owns a string of Porsche
dealerships and is the owner of one of only two Bugatti
Veyrons in Malaysia. He doesnt spend all his money on cars
and is a keen philanthropist. He also owns a hospital group,
which sends doctors to Malaysian villages to provide free
treatment and medicine to local people.
Photography: Getty

Rich list | Lifestyle 139

Tony Fernandes
owner of Caterham

Nationality / Malaysian

550
m
Ron Walker
chairman of Australian Grand Prix Corporation

Photography: Sutton-images.com

470m

Photography: Sutton-images.com

Nationality / Australian
Former Lord Mayor of Melbourne Ron Walker brought
the city onto the calendar as the new home of the
Australian Grand Prix in 1996 and has been a well-known
figure in F1 ever since. Walker made his first millions in the
1970s when Brooke Barmer, the chemicals company he set
up, was sold for 8m and hes featured on lists of Australias
richest men since the mid-1980s.
After his success in the chemicals industry he turned to
property and took advantage of a building boom in
Melbourne. One of his biggest deals was developing the
citys Crown Casino, the largest casino complex in the
Southern Hemisphere. He also made money from

investments in Fairfax Media, the publisher of some of


Australias biggest newspapers, and in the mining and
telecoms industries.
But sport was always his real love. Before turning to F1,
he led Melbournes unsuccessful bid to host the 1996
Olympics and was the chairman of the committee that
brought the 2006 Commonwealth Games to the city,
personally lobbying voters in 71 countries to secure
thebid. Hes still heavily involved in the Grand Prix
although has had to slow down in recent years. In 2010
heunderwent brain surgery following a fall while cycling
inMelbournes Botanical Gardens.

Malaysian airline tycoon Tony Fernandes has one of


the fastest growing fortunes in F1. Educated at British private
school Epsom College, he worked as an accountant at Virgin
Atlantic before being promoted to financial controller at
Virgin Records. He returned to Malaysia in 1989 to run
Warner Music in the country, but the airline industry
remained his big love.
After seeing EasyJet founder Sir Stelios Haji-Ioannou on
TV in 2001 he was inspired and bought the Malaysian
governments stake in struggling AirAsia for just one ringgit
(20p). Its now worth 1.8bn. Fernandes made the airline a
success by making it the cheapest option to fly in Malaysia, a
country where he estimates only 6% of people have flown on

a plane. A ticket gets passengers just the flight all luggage is


charged for and blankets and pillows can be bought onboard
along with meals. Hes since launched another four airlines
and also Tune Group, which has given him the opportunity
to branch out into hotels, banking and telecoms.
Hes a big sports fan and tried to buy West Ham before
Bernie Ecclestone sold him 66% of Queens Park Rangers in
2011 for a rumoured 35m. QPR has not performed as well
as he hoped and was relegated from the Premiership at the
end of the 2012/13 season.
His F1 team is also performing below expectations. In its
first three seasons in F1 it finished in lowly 10th place in the
championship every year.

Rich list | Lifestyle 141

140 Lifestyle | Rich list

Paddy
McNally
Paddock Club founder

Photography: Moy/Sutton-images.com

Nationality / British
A former boyfriend of the Duchess of York, Paddy
McNally made his name in Formula One as the founder of
the Paddock Club, the sports luxury hospitality business.
When he began his work three decades ago, hospitality in F1
usually meant being served a warm beer and a packet of
crisps. However, McNallys relentless attention to detail saw
F1 hospitality become the global standard in sport.
Today F1s organisers transport 40,000 glasses, 30,000
plates, 10,000 cut flowers, 5,500 magnums of champagne,
and 200 tonnes of tent material to each race. McNally also
oversaw F1s trackside advertising operations and
transformed it from blocks of scruffy, randomly sized
hoardings to neat rows of banners, optimised for TV, which
cost sponsors millions of dollars per race.
McNally sold his company Allsport to F1s new owners
CVC in 2006 and although he has since retired from the
day-to-day running of the business he still owns a 1% stake
in Formula One, worth around 60m.
He spends much of his time in the Swiss ski resort of
Verbier, but recently restored Georgian mansion Buckland
House in Oxfordshire, despite opposition from local
cricketers who he banned from playing on the front lawn.

Photography: 2013 Sahara Force India Formula One Team

460m

450
m
Vijay Mallya
owner and team principal of Force India

Nationality/ Indian
There is a saying in motorsport that the best way to become a millionaire in
Formula One is to start as a billionaire. Flamboyant Force India owner Vijay
Mallya knows the feeling. He has a wide range of business interests spanning
breweries, airlines and engineering, and has also served as an MP in his home
country, but recently times have been tough. Once one of a select group of
Indian billionaires, Mallya has seen his fortune plummet in recent months as
his Kingfisher Airlines was grounded.
The son of industrialist Vittal Mallya he was always destined for a business

career. Mallya took over as chairman of his fathers company United Breweries
Group in 1984 and set about turning the struggling brewery around. By 2007
United had become one of the worlds biggest brewers.
In 2007 he teamed up with Dutch internet entrepreneur Michiel Mol to buy
Force India for 80m from supercar manufacturer Spyker and has been an
enthusiastic member of the F1 circus ever since.
He is a great self-promoter, involved in a wide range of projects. His
Kingfisher brand has its own swimsuit calendar, which was the subject of an
Indian reality TV show.
He owns more than 40 houses around the world, including a Scottish castle
and a South African game lodge, plus a tropical island, a stud farm and a vast
collection of classic cars, the highlight of which is a Rolls Royce garbage truck
that used to belong to a maharajah. He spent 1.2m at auction acquiring the
belongings of Mahatma Gandhi. His private yacht, the Indian Empress, is one
of the largest in the world at 95 metres.

270
m
Luca di Montezemolo

290
m
Piero Ferrari
Ferrari owner

Ferrari chairman

When Enzo died in 1988, Piero was his only


heir and he was elected as vice chairman of
Ferrari. He also has other business interests
including a stake in car design firm Pininfarina
and is president of the Piaggio Aero private
jetcompany.
Through his role at Piaggio he commissioned
a one-off Ferrari-branded small plane, which
reflects the design of the companys cars and is
one of the most powerful aircraft of its type.
He lives in his fathers old home in Modena
and is a big supporter of his achievements.

Photography: Sutton-images.com

The only surviving son of the late great Enzo


Ferrari, Piero Ferrari has a 10% stake in the car
company and is a keen follower of the F1 team.
Pieros mother was Enzos mistress, Lina Lardi,
and his father didnt publicly acknowledge him
until the death of his wife Laura in 1978.
Piero had already been working incognito at
Ferrari for several years by then. He inherited
from his father a love of engineering and
worked on the road car division of the car
company before taking a job overseeing the
racing department in the mid 1970s.

Nationality / Italian
Photography: Lundin/Sutton-images.com/Getty

Nationality / Italian

The younger son of an Italian aristocrat,


Luca di Montezemolo flirted with being a rally
driver before he got a job as Enzo Ferraris
assistant in 1973. A year later he was appointed
team principal of Ferraris F1 team and under
his guidance it won world championships with
Niki Lauda in 1975 and 1977.
Ferraris new owner, Fiat, was impressed. Di
Montezemolo was appointed as the car
manufacturers head of external relations in
1977 and at the age of 30 was the youngest
senior manager in the history of the company.

He worked for various parts of the Fiat empire,


including jobs as head of drinks company
Cinzano and running the first Italian Americas
Cup yachting entrant. He also masterminded
the Italia 90 World Cup tournament.
But fast cars were still a big draw and in 1991
di Montezemolo was appointed president of
Ferrari, which had been struggling since Enzos
death in 1988. He not only brought it back into
the black but he also spearheaded its return to
F1 success by signing Michael Schumacher who
would go on to win five world championships.

Rich list | Lifestyle 145

144 Lifestyle | Rich list

200m
Ron Dennis
McLaren owner

that they won 15 out of 16 races. Under Denniss control,


McLaren became the second most successful team in the
sports history, behind only Ferrari.
It wasnt only about racing. Dennis built up other parts of the
McLaren business as well, including electronics, catering and
marketing divisions. But it was as a sportscar manufacturer that
McLaren become most well-known outside racing, first in 1992
with the McLaren F1 once the fastest road car in the world
and more recently with the MP4-12C.
Dennis retired as F1 team principal in 2009 but is still
chairman and owns 25% of the McLaren Group. He was
involved in the negotiations to try to keep Lewis Hamilton
atMcLaren when the star left for Mercedes.

Photography: Sutton-images.com

Ron Dennis started his F1 career as a junior mechanic for the


Cooper team aged 18. He has gone on to become the most
successful team principal in the history of the sport, winning
ten drivers and seven constructors championships.
After his F1 apprenticeship, Dennis was keen to be his own
boss and set up his own team, which competed successfully in
junior series. He was keen to return to F1, however, and when
former world champion McLaren began to struggle in 1980 he
bought into the team and became team principal.
Dennis turned the teams fortunes around and in 1984
Dennis won his first world championship with Niki Lauda
behind the wheel. In 1988, the McLarens, driven by the
legendary pairing of Alain Prost and Ayrton Senna, were so fast

Photography: Sutton-images.com

Photography: Lundin/Sutton-images.com

Nationality / British

Rich list | Lifestyle 147

146 Lifestyle | Rich list

Gerard Lopez

Sir Martin Sorrell

Lotus team owner

Nationality / Luxembourg

independent director of F1
company that looks after the business interests
of drivers such as Romain Grosjean and
Jrme dAmbrosio.
Genii bought Renaults F1 team in late 2009
when the car manufacturer decided to quit
team ownership following the Crashgate
scandal. After losing its main backer, the team
was expected to struggle, but Lopez has turned
its on-track fortunes around.
Lopez poached Lotus as a partner from
Tony Fernandess team and renamed his own
team after the classic marque. He brought on

board a list of high profile sponsors, including


Microsoft, Unilever and Coca-Cola, and
persuaded 2007 world champion Kimi
Rikknen back into F1 to lead the team.
Rikknen won the 2012 Abu Dhabi Grand
Prix, finishing in third place in the
championship and marking Lotuss return to
the forefront of F1. However, despite its
on-track success and big-name partnerships,
the team has struggled financially and in mid
2013 Rikknen announced he was leaving for
Ferrari after not being paid by Lotus.

185m

Nationality / British

Photography: Sutton-images.com

Gerard Lopez has only been involved in F1


for just over three years, but has already made
his mark. A graduate of Miami University,
Lopez went on to set up two venture capital
firms, Mangrove Capital Partners and Genii
Capital, specialising in technology. Mangrove
was one of the first investors in Skype and
made an estimated 120m from selling its
stake in the company.
It was through Mangrove that Lopez first
became involved in motorsport. Mangrove
owns Gravity Sport Management, the

Photography: Lotus F1 Team 2013

Sir Martin Sorrell is well known in British


business circles as the boss of top advertising and
PR firm WPP. WPP started life as Wire and Plastic
Products, a manufacturer of shopping baskets,
before Sorrell took it over in 1985 and steered it
towards advertising. Today it employs more than
165,000 people in 3,000 offices worldwide and
Sorrells remaining stake is worth around 150m.
Sorrell was knighted in 2000 and last year was
named Britains Most Admired Leader by
Management Today magazine. He is a trustee of the
British Museum and was part of the FAs bid team
to stage the 2018 World Cup. It hasnt all been
plain sailing though.
In 2005, Sorrell was forced to sell a stake in

WPP worth 12m in order to fund a 30m


divorce settlement to his first wife Sandra. She
also received a 3m Georgian townhouse and two
underground car parking spaces at Harrods.
Sorrell was appointed to the board of F1 in
2006 by the sports new owners CVC. Since then
he has had several high profile clashes with the
sports boss Bernie Ecclestone. In 2009, after
Ecclestone described Hitler as a man who could
get things done, Sorrell said he was appalled
by the comments. He also hit out at the F1
supremos support for his friend Flavio Briatore
when he was banned from the sport for cheating
later that year. Sorrell claimed Ecclestone was out
of touch with reality.

175m
Photography: Hardwick/Sutton-images.com

140m

170m

Donald
Mackenzie
Formula One Group chairman

Fernando Alonso

Nationality / British

2005 and 2006 world champion

but things didnt work out and was soon back at Renault. In
2010 he was signed by Ferrari to lead their title challenge.
Hes impressed at the Scuderia and many considered
him the best driver in 2012, winning three times despite a
car that was believed to be slower than the Red Bull. His
performances have justified Ferraris investment in him,
despite his failure to replicate his championship success.
Alonso is not known as a big spender despite his wealth.
One of his few indulgences is a private jet, which helps
make his hectic travel schedule a little easier to manage. In
2011, he quit his home in Switzerland to move back to
Spain because he was homesick, even though the move has
landed him a 33% tax bill on his salary.

Photography: Lundin/Sutton-images.com

Nationality / Spanish
He may not have won a world championship since 2006,
but Fernando Alonso is still the highest paid driver in the
sport, commanding a salary estimated at 27m a year
fromFerrari. It hasnt always been so easy for the Spaniard.
He started his career at the backmarker Minardi team in
2001 where he had to find sponsorship to cover the cost of
his drive.
Alonso impressed despite his poor machinery and was
snapped up by Renault as a test driver. He graduated to the
race team in 2003 and won the Hungarian Grand Prix that
year, becoming the youngest ever F1 race winner at 22.
He followed this up with two championships for Renault
in 2005 and 2006. He moved briefly to McLaren in 2007,

Photography: Sutton-images.com

Rich list | Lifestyle 149

148 Lifestyle | Rich list

Donald Mackenzie is rarely seen in the Formula One


paddock and is so low profile that some of F1s key players
might not recognise him. But he is one of the most powerful
people in the sport.
As one of the founders of CVC Capital Partners, it
wasMackenzie who drove the investment firm to buy
Formula One back in 2005. At the time, the top teams were
threatening to set up a rival series to F1 and CVC paid just
600m for a majority stake.
F1 is now worth 6bn and CVC has already made a 4.4bn
profit on the deal. The turnaround was possible because of
Mackenzies vision for the future of the sport.
Mackenzie set up CVC in 1988 and has been behind many
of its successful investments. He has also been a director of
several of CVCs other high profile investments including
Kwik Fit and bookie William Hill.
Mackenzie was appointed F1 chairman in 2011 and is
known to get on well with F1 chief executive Bernie
Ecclestone, making it a partnership to be respected.

Rich list | Lifestyle 151

Sir Frank Williams


Williams team principal

Nationality / British
Frank Williams is Formula Ones longest standing
team principal and has been at the helm of his team since
1977 before most of the current driver line-up was born.
During that time Williams has built up an enviable
record in the sport. His team has won seven drivers titles
and nine constructors with some of the biggest names in
F1 behind the wheel, including Nigel Mansell and Damon
Hill. The team has won 114 races, most recently the 2012
Spanish Grand Prix.
But it hasnt all been about victories. Until Venezuelan
driver Pastor Maldonado won in Spain last year Williams
had not won a race since 2004 and had started to flounder

at the lower end of the standings. Sponsorship has been


hard to come by as a result of the poor form.
In March 2013 his wife of 39 years, Ginny, died after a
two-year battle with cancer. It was the latest in a string of
tragedies to hit the team, including the crash that left Frank
Williams wheelchair-bound in 1986 and Ayrton Sennas
fatal accident at the wheel of a Williams at Imola in 1994.
The teams failing form has led it to find business
solutions. In 2011 it became the first F1 team to go public
when it floated on the Frankfurt Stock Exchange, valuing
the team at 208m. Williams cashed out shares worth
13.4m in the float and still owns a 50.3% stake in the team.

130m

135m

Kimi Rikknen
2007 world champion

Its difficult to believe that just a year


ago many people thought Kimi Rikknen
was a spent force in Formula One. However,
his return to the sport after a two-year
sabbatical in rallying saw him win the
AbuDhabi Grand Prix and finish third in
the championship.
Its typical of a career in which
Rikknen has frequently defied
expectations, both for better and worse.
When he debuted in F1 for Sauber in 2001
he had previously competed in only 23 car
races and was so inexperienced that he was

nearly denied a racing licence. When he


scored a point in his first race it swept away
those negative opinions.
Rikknen joined McLaren between
2002 and 2006 before he switched to Ferrari
in 2007 to replace Michael Schumacher. The
move made him the highest paid driver on
the grid with an estimated salary of 23m.
He also won the title that season by a
single point, sneaking past better favoured
Lewis Hamilton and Fernando Alonso.
Great things were expected to continue for
the Ferrari-Rikknen partnership. But

disappointment followed and he won only


three races in the next two years before
quitting F1 to go rallying.
Concerns about Rikknens form on
hisreturn to Formula One with Lotus in
2012 led to a relatively small salary of an
estimated 3m and even that was late in
arriving, as Lotus hit financial difficulties
in2013. However, Rikknens dedication
has paid off. Ferrari, the team that
unceremoniously dumped him at the end
of2009, will be welcoming him back at the
wheel in 2014.

Photography: Sutton-images.com

Photography: Lotus F1 Team 2013

Nationality / Finnish

F1 stars holidays | Lifestyle 167

166 Lifestyle | F1 stars holidays

Jet-set
holidays
Theres no doubt that being a Formula One
driver is a high-pressure job so where do the
sports superstars go to let off steam?

Sir Jackie Stewart


Three-time F1 champion Sir Jackie Stewart is
known for his close links to royalty. In 1971 he
was nominated as Sports Personality of the Year
alongside Princess Anne, who won the award.
The two became close friends, with HRH
inviting Stewart to Sandringham on many
occasions. Stewart even holidays with royalty,
though it isnt in the way you might expect.
The royalty in this case is the Queen Mary 2,
one of the biggest cruise liners at sea. One of
the most enjoyable and, I would suggest,
sensible ways to cross the Atlantic, is to travel

Photography: Bruno Senna for Zoom

Writers: Christian Sylt & Caroline Reid

cruise ship, a theme park, a waterfall and a


mountain. It may sound like a question in
a cryptic crossword, but in fact its a list of
some of the holiday destinations visited by
current and former Formula One drivers.
Theyre some of the worlds most well-paid sports stars
so naturally they visit some luxurious and unusual
destinations, but they also happen to be very private
individuals so its been tough to find out just where they
holiday. Until now.
A new initiative called Zoom has shed light on where
F1 drivers go to relax and the results are as surprising and
varied as you might expect. Zoom is a photo auction in
aid of Great Ormond Street Childrens Hospital and it has
a unique twist. Most charity auctions in F1 are of signed
photos of the drivers or their overalls. However, the
difference with Zoom is that the drivers took the signed
photos themselves and it gives a glimpse into their highoctane lifestyle.
Team principals also took part in Zoom, as well as
former drivers and other personalities closely connected
to Formula One. Some of the most unusual destinations
visited are covered on the following pages, along with
explanations from the stars themselves about why they
choose them. They arent what you might expect

Former Williams driver Bruno Senna is the nephew of the


late Ayrton Senna and his holiday destination of choice has close
connections to his family. This photograph is of my familys
beach house just south of Rio in Brazil, he says. I have many
happy memories of this house, spending a lot of time here as a
child surrounded by my family. It has breathtaking scenery and is
very tranquil so I like to visit as often as I can.

Photography: Cunard

Bruno Senna

on the Queen Mary 2, Stewart says, adding,


The accommodation is probably the finest of
any ship in the world. The opportunities for
entertainment and relaxation are many and my
ideal would be to make the journey at least once
a year. Very spoiling, but most relaxing.
One reason why the QM2 is so popular with
big spenders is the subtle separation between
them and the masses. Stewart is such a fan of
the QM2 that he celebrated his 70th birthday in
2009 by taking his family to New York on it. His
next trip is planned for early 2014.

F1 stars holidays | Lifestyle 169


Photography: Moy/Sutton-images.com

168 Lifestyle | F1 stars holidays

Sebastien Buemi
Former Toro Rosso driver Sebastien Buemi calls this place
paradise island and its easy to see why. This picture was taken
on the island of Mauritius, he says. As everyone knows, the
Formula One season is very long and I really like to take a little
break somewhere very calm and relaxing after the season. I like
this place very much because the weather and the beach are
very good. I can really recover and when I fly back to Europe
Im full of energy.

Photography: Sebastien Buemi for Zoom

Thierry
Boutsen

Red Bull Racings championship-winning


lead driver was born in Heppenheim, Germany
but he has close ties to Austria. Red Bull is 49 per
cent owned by 69-year-old Austrian Dietrich
Mateschitz and the company is based in the
country, so its little surprise that Vettel has
explored the area.
This is the mountain known as the Red Wall,
in Vorarlberg in Austria, he says. Its an
awesome view! I know the area really well. I went
on my first skiing trip there with my family and
my good friend, Joschi Walch, who ran the
hospitality unit when I made my F1 debut and
now has a hotel in the area.
Vettel enthuses, I love to go to the region on
holiday and it really is a home away from home
as F1 catering boss Karl-Heinz Zimmermann has
his Alpenblick restaurant nearby. I love it!

Photography: Sebastian Vettel for Zoom

Sebastian Vettel

Few personalities in F1 know


Monaco as well as Boutsen. Having
driven for Arrows, Benetton, Williams,
Ligier and Jordan, Boutsen raced in
over 160 Grands Prix, including 10 in
Monaco, and this was the origin of his
strong ties with the principality. I
discovered Monaco driving a Formula
One car, he says. I immediately found
the place marvellous, surrounded by
the Mediterranean sea and the
mountains. He liked it so much that
he decided to take holidays there and
then became a resident.
Monaco has a radiant glow and
everything seems to sparkle.
Balustrades and cascading fountains
abound and even the streets shimmer.
Monacos restaurants are as much of
an event as the rest of the states
attractions, and the views are a
dazzling distraction. Head up to the
palace it must be one of the few
places in Europe where you can clearly
see three countries in one sweep.
Excess is the norm in Monaco. Its
centrepiece shopping centre has
chandeliers hanging from the ceiling
and the states underground walkways
have marble floors and mirror-lined
walls. The quality of life is extremely
high: no criminality, nice weather all
year long, no paparazzi, 20 minutes to
Nice international airport and very
good facilities to train the physical
condition, says Boutsen.
The annual Grand Prix that snakes
through its streets is of course the most
famous of its sporting spectacles, and
youll find motor racing monuments
across the state. There are iron models
of ancient race cars, shops packed with
team merchandise and, of course, the
streets themselves. The place to be
photographed is the Fairmont hairpin,
replete with rubber on its red-andwhite kerb amassed from years of
four-wheeled action.
Racing in Monaco is an absolutely
amazing souvenir, says Boutsen. The
most exiting moment was certainly
driving a 450kg Arrows BMW with
1200bhp and qualifying tires. Even in
sixth gear I had wheelspin.

Adrian Newey
acclaimed f1 engineer and Seb Vettells
championship-winning car designer Adrian
Newey prefers to travel further afield than Seb
and his choice of holiday destination is a lot
less glamorous. However, it also has a close
connection to racing. This picture of a
tractor was taken in India last year, explains
Newey. I took some holiday with my family
after the Grand Prix and travelled round.
Towards the end of the trip we stayed in a
Photography: Adrian Newey for Zoom

wilderness camp in Rajasthan and toured


round some of the surrounding villages.
He adds, Life there is humble with no
televisions and simple homes. The people are
happy, friendly but have a tough existence off
the land. I thought this tractor epitomises
those characteristics.
For someone renowned for designing the
most high-tech cars in the world, it couldnt
be much more ironic.

F1 stars holidays | Lifestyle 171

170 Lifestyle | F1 stars holidays

Pastor Maldonado

Pedro de la Rosa
Ferraris test driver Pedro de la Rosa likes to holiday close to his home
country of Spain. Every summer he visits the island of Mallorca, off the
Spanish coast, and he has sentimental reasons for doing so. This picture is
very special because its the entrance to the bay of Porto Colom, where I spend
my summers, he says. That is the bow of my boat. The house you can see is
the house my parents rented in summer when we were small and, as a result of
spending my summers there, we decided to build our own house nearby.
De la Rosa says his boat is like a second home. He adds, If I were to describe
what I feel when looking at this picture in one word it would be happiness,
because that is where I would go for a swim with my friends when I was a kid.

Photography: Daniel Ricciardo for Zoom

Photography: Pedro de la Rosa for Zoom

Williams driver Pastor Maldonado likes to return


home when holidaying. The 28-year-old says, Im a
proud Venezuelan and its a beautiful country
something this photo clearly shows. Its of the Sapo
Falls, or Frog Falls, in the Canaima National Park.
The best time to visit is in November, just after the
rainy season, when the volume of water over the
waterfall is at its largest.

Photography: Pastor Maldonado for Zoom

Photography: Sutton-images.com

Bernie Ecclestone
Few people in Formula One have travelled as much as the
sports boss Bernie Ecclestone. He rarely takes holidays but
when he does, it isnt to a private island or a bolthole for
celebrities. Instead, Ecclestone takes his 37-year-old wife
Fabiana to Croatia and in 2012 Red Bull Racing team
principal Christian Horner joined them.
I was always happy here. I know this place well, he says.
Its little surprise that Ecclestone is well-acquainted with the
area because when he visits he stays on his 52-metre yacht
and cruises the Adriatic. It is really amazing. This is the best
place in the world.

Daniel Ricciardo
Toro Rossos Daniel Ricciardo is taking over from Mark Webber in the Red Bull
Racing seat in 2014 and both holiday in their home country of Australia. Quad
biking is awesome, says Ricciardo. Theres a lot of great beaches near my home
town of Perth that are ideal and I like heading down to Lancelin or further north to
Jurien Bay. Camping and quad bike riding with my friends is a perfect weekend for
me. Putting my feet up and a couple of cold beers never hurt.

F1 stars holidays | Lifestyle 173

172 Lifestyle | F1 stars holidays

Rubens Barrichello
The last place you expect to find an F1
driver training is in a theme park, but Disney
World in Florida is an exception. The former
Ferrari driver is a theme park fanatic and even
runs in an annual marathon through the
Disney resort in Orlando.
My first visit to Disney World was in 1983
with friends, says Barrichello. He was 11 at
the time but a love of Disneys parks in
Orlando has stuck with him just as much as
his passion for motor racing.
I visit twice a year more or less, says the
beaming Brazilian and hes proud of it. From
his Twitter page Barrichello links to photos of
him and his family standing in front of the
world-famous Cinderella castle in the Magic
Kingdom park.
With F1s low profile in the US it isnt likely
he will be pursued by fans there either. Its
very peaceful and my kids enjoy it so much,
he tells us. While the theme parks are the big
draws for his two sons Eduardo and Fernando,
Disney World also has the added attraction for
Barrichello of five lush golf courses.
The golf is also great, he admits and its no
exaggeration, as the courses are so impressive
that until recently an annual round of the PGA
Tour was held there.

Sport is never far from Barrichellos mind


on vacation and in January 2010 he mixed
business with pleasure when he ran a half
marathon from Epcot, Disneys science park
in Orlando, to the Magic Kingdom. I did it for
pleasure and fitness, explains Barrichello,
adding, It was my first one. Despite this, he
still finished in 1,671st place out of 17,143
runners. Among those who finished ahead of
him was former Jaguar driver Luciano Burti
who was ranked 1,383rd.
They had an unexpected factor hampering
progress as the weather in Orlando was far
from what would usually be expected of the
sunshine state. Temperatures hovered around
zero during the race as the runners were
pelted with snow and rain. It was really cold
and I started too far back so had to overtake a
lot of people, describes Barrichello. He adds

Barrichellos
favourite Disney
attraction, Soarin,
is as peaceful as
they come

that despite this the rest was great and I had


lots of fun. It didnt put Barrichello off and he
ran again in 2011, finishing in an improved
1,208th place.
The half marathon complemented
Barrichellos usual training regime and he
explains, Because of F1 I have to be well
prepared, but I had never run such a long
distance. I had to alter my training a little but it
was good fun and it was good for me.
Being in the vacation capital of the world
means that there are endless opportunities to
recuperate and Barrichellos favourite Disney
attraction, Soarin, is as peaceful as they come.
The ride is a simulated hang glider ride over
some of Americas most well-known
landscapes and landmarks.
But the most ingenious Disney ride is the
centrepiece of Disneys Hollywood Studios
park: Toy Story Mania. My kids love this one,
says Barrichello. You don 3D goggles and take
control of a light gun to shoot at targets.
Unlike most rides this one fights back even
crack shots get blasted with bursts of air timed
to 3D projectiles hurled from the screen.
Barrichello is such a fanatic that he bought
a house near to the Orlando parks and if he
isnt at a track youre likely to find him there.

Photography: Barrichello family

Jaime Alguersuari
Jaime Alguersuari, Ricciardos predecessor at Toro
Rosso, is a DJ when he isnt racing and owns a recording
studio in Barcelona. The Spaniard performs under the stage
name Squire and has played sets in the party island of Ibiza
and his home country of Spain.
My photo is of the Alhambra palace in southern Spain,
he says Its a beautiful place. I love this amazing Andalusian
spot, one of the most visited in the world.

Photography: Jaime Alguersuari for Zoom

174 Lifestyle | F1 stars holidays

F1 stars holidays | Lifestyle 175

Kamui Kobayashi
Former Sauber driver Kamui Kobayashi holidays in
Japan and with vistas like this, you can see why. I took
this picture when I visited Mount Fuji for the first time,
he says. Its a beautiful landscape in the Japanese Alps.
You can go by car a good way up to this holy mountain
and this view is what you see when this road ends.

Photography: Kamui Kobayashi for Zoom

Costs | Teams 23

22 Teams | Costs

RunninG on

Empty
Formula One teams are renowned for
owning some of the most expensive hi-tech
cars in the world and employing the
best-paid drivers, but few of them actually
make any profit. We take a look at why
Writer: Caroline Reid

Photography: Boland/Sutton-images.com

ormula One teams are far from


typical businesses. Their shop
front is seen by hundreds of
millions of people every year
and when theyre winning, as
if by magic, they can charge more for
companies to sponsor them. It makes
victory on track the main objective for the
teams and this is what makes them unique.
Most companies want to make a profit
first and foremost, but not F1 teams. Theyre
generally run to break even. This involves
the team principals spending whatever is
available and they do it in pursuit of victory.
The theory is its better to win on track and
make no profit rather than make money
and finish low down the standings.
Victory on track increases the value of
the team, which gives the owners a payout
when they come to sell it. It also increases
the teams ability to bring in more money

from sponsorship, because brands are


prepared to pay more to be associated with
a winning team. Team owners can get a
financial return in the long run by selling a
team, and while its running to break even
they receive rich rewards in the form of a
salary. This comes out as a cost to the team
and the team owner is often the highest
paid director.

Public knowledge
A total of eight of the teams are based in the
UK and therefore have to file publicly
available financial statements. The most
recent year for which a complete set of
accounts is available is 2011 and this reveals
that the team with the highest paid director
was Red Bull Racing. Its team principal is
Christian Horner and hes believed to have
received the sum of 1.3 million shown on
the statements.

Xxxxxxx | Xxxxxxxxxx 25

24 Teams | Costs

Photography: Sutton-images.com

If the owner of a team is a company that


sells products, such as Mercedes, Ferrari or
Red Bull, the benefit they get while the team
runs to break even comes from television
exposure of their logos on the cars.
According to F1s trade guide, Formula
Money, Red Bull was the most exposed
brand in F1 for the past three years running.
Its Advertising Value Equivalent (AVE) the
price it would have to pay to buy a similar
amount of on-screen exposure came to an
estimated $414.9m in 2011. This decreased

team revenue is
fuelled by F1s huge
television audience,
just over 500 million
viewers last year

to $322.8m last year, due to Vettel winning


fewer races, but it was still 14.2% of the total
gained by all the teams.
In 2011 the accounts show that F1s UKbased teams had revenues of 97.6m on
average, with Red Bull Racing the highest at
a whopping 176.8m. The teams revenue
generally comes from three sources, with
each providing a similar amount. Theyre
all fuelled by F1s huge television audience,
which amounted to just over 500 million
viewers last year. The first key revenue
source is sponsorship and in this field
money certainly talks. The higher the cost,
the greater the exposure.

Science of sponsorship
Generally speaking, the rear wing, sides of
the air intake box on top of the car and the
sides of the car itself are prime logo
positions and a sponsorship deal with a top

team involving any one of these locations is


likely to cost around $25m. At the lower
end of the spectrum small logos are often
found on the cockpit sides or on the nose of
the car and these can generally be bought
for under $2m with a high-ranking team.
But, bearing in mind that these are annual
figures, the total deal cost can be much
greater, as partnerships last for around
three years on average.
In the vast majority of cases, the teams
marketing department secures the
sponsorship, but occasionally its handed to
them on a plate by the driver. Lower ranking
teams sometimes take drivers purely on the
understanding that companies they have
got connections with will provide
sponsorship. These are known as pay
drivers and even if they lack driving talent,
the money they bring to their team can
often make up for it since it can be used

Photography: Lundin/Sutton-images.com

Previous page: Christian Horner is the highest paid director in F1. A large proportion of the teams money goes on staff costs
Above: The placement of the sponsors logos determines how much they pay for them
Opposite: Sergio Perez owed his arrival in F1 with Sauber in 2011 to significant financial backing from his home country Mexico

Photography: Sutton-images.com

26 Teams | Costs

Above: The F1 teams aim is to get their drivers on the podium as often as possible, not to turn a profit
Below: The more exposure a car can give it sponsors, the better

The f1 series pays


teams a total of 63%
of its annual profits
as prize money
to improve development of the car itself.
Other sponsors dont even get presence
on the cars and are instead known as
suppliers. This is a cheaper alternative for
the sponsor and often doesnt involve a cash
cost. Instead, the brands supply equipment
or services, and although they dont get TV
exposure they usually receive many of the
perks that come with on-car sponsorships,
such as passes into F1s exclusive paddock,
use of the team logo in advertising and
sometimes even driver appearances at
company functions.
Formula Moneys data shows that around
42% of team revenue comes from
sponsorship, with the other major source
being payments from team owners at 24%.
The marketing benefit from AVE
compensates for this investment despite
being intangible income.

Money in and out


The other major source of revenue comes
from the teams profit-share with F1. The
series pays them a total of 63% of its annual
profits as prize money. It comprises around

Photography: Sutton-images.com

29% of team revenue and came to $698.5m


in 2011 according to F1s latest financial
statements. The remaining 5% comes from
miscellaneous sources such as pay drivers.
After manufacturing, and research and
development outlay, staff pay is the second
biggest cost for F1 teams and it totals
27.5m on average per team.
So teams receive enough money to keep
going while the owners take a salary or get

marketing exposure for their products.


Teams arent designed to make profit, rather
for their value to be increased by winning
on track. If they fail to do that then it
jeopardises the whole model because
sponsorship rates and prize money could
fall, which in turn makes it less likely theyll
win. Avoiding this vicious circle is what
drives F1 teams forwards, but the risk of
being pulled in is never far away.

Tourism | Races 105

Photography: Sutton-images.com

104 Races | Tourism

DRIVING
TOURISM
Every year governments around the world pay millions of
dollars to get involved in F1, but what do they get out of it?
We spoke to the tourism departments in So Paulo
and Monaco to find out
BRAZILIAN GRAND PRIX

SO PAULO

How do you use the Grand Prix to promote So Paulo?


Marcelo Iha, spokesman for So Paulo Turismo: The
Formula One Grand Prix is one of the most important events
in So Paulo. It brings thousands of tourists people from
other countries, other Brazilian states, nearby cities and also
people who live here. This race is a unique opportunity to
divulge So Paulo to the whole world not only during the
three days of the event and also to promote the city as a
tourist destination. We also promote the destination on
websites, other printed materials, an exclusive survey, fan
tours with tourism professionals and in the press.
So Paulo is known as a capital of business, and there are
a lot of options for leisure and entertainment all through
the year, such as museums, theatres, parks, bars, restaurants
and night life.
What are the benefits of using a motor race, rather than
another type of sport, to promote a destination?
MI: The F1 Grand Prix has international projection and is
transmitted on TV in many countries, so it is a great benefit
to promote So Paulo as a destination. Motor racing is a
passion for Brazilians due to some great drivers we had,
especially in F1 since the times of Jos Carlos Pace, Nelson
Piquet, Emerson Fittipaldi, Ayrton Senna, Rubens Barrichello
and, nowadays, Felipe Massa. This shows that Brazil has not
only soccer, but is also talented in other sports, and motor
racing is important because it is universal. People all over the

world enjoy speed and the fact a race like this takes place in
So Paulo promotes not only the city but the whole country.
Which are the key countries you target for media coverage
and why?
MI: From the point of view of So Paulo Turismo, the official
tourism and events company of the city, it is its priority to
promote the race mainly in the USA, Europe and South
America too.
Do you run any promotional events connected to the
Grand Prix over the race weekend and, if so, what are they?
MI: Some private tourist agencies promote specific travel
packages for the Brazilian Grand Prix, so that interested
people can visit the city and see more places during the week
of the event. But we do not run other events connected to the
Grand Prix.
How do you measure the impact on tourism from the
Grand Prix?
MI: So Paulo Turismo has a research department, the
Tourism Observatory of So Paulo, which studies the impact
of mega-events in the city such as international shows, big
events like Carnival at the Sambadrome of Anhembi, and
others, including the F1 Grand Prix. Just to have an idea, F1 in
2012 brought 127,000 people to the Interlagos track, and
11.3% of them were foreigners.

Tourism | Races 107

Photography: Sutton-images.com

106 Races | Tourism

MONACO GRAND PRIX

monacO

How do you use the Grand Prix to promote Monaco?


Michel Bouquier, president of the Monaco Tourism &
Convention Authority: The Grand Prix is the number one
promotional and marketing tool to boost tourism to
Monaco. It provides Monaco with an extraordinary image
coverage on five continents throughout the year. We never
fail to showcase the F1 Grand Prix when meeting with the
press, the media and the travel trade during our ongoing
promotional activities.
What are the benefits of using a motor race, rather than
another type of sport, to promote a destination?
MB: One of HSH Prince Alberts ambitions is to position
Monaco as the worlds capital of sports. There is not a single
week throughout the year without a sports event taking
place in Monaco. Since the Principality enjoys a very long
relationship with the automobile industry, it is quite natural
to host many motor races in Monaco. The first Grand Prix
took place here in 1929. The Monte Carlo Rallye started in
1911. The very first Automobile Club of Monaco, named
Sport Vlocipde Mongasque, was created in 1890.
What impact does the Grand Prix have?
MB: The economic impact is huge. The four-day Grand Prix
event generates an estimated economic impact for Monaco
and its region of about $70 million. We host over 200,000
spectators in the GP stands and there are some 900 million
TV viewers around the world (80 television channels
broadcasting live in 60 countries).
Do you run any promotional events connected to the
Grand Prix over the race weekend?
MB: We do run corporate entertainment activities together
with our convention centre, the Grimaldi Forum. We host
about 200 selected guests on our own stands, including
lunch and open bar.
How do you measure the impact on tourism from the
Grand Prix?
MB: Through the number of hotel room nights and their
average room rate. In addition we gather as many numbers
as possible (harbour, restaurants, lounges, shops) to
monitor the impact of the Grand Prix on our economy.