What factors influence the salaries of Formula 1 brands?

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Formula 1 is a sport that moves millions around the world where every year a total of approximately 1 billion is distributed by all the teams in the competitions. Companies spend an indigent amount of money on car repairs and upgrades. 
However, all the salaries paid to the brands, not only depend on the results on the track, there are multiple other factors such as seniority, contribution to the championship or relevance. 
Firstly, as is obvious, brands are rewarded for results on the track. Depending on the podium finish in each championship, teams can receive between 61 and 13 million dollars. The highest paid companies for their results last year were Mercedes with 61 million, Red Bull with 52 million and Ferrari with 41 million dollars. 

Another factor is the so-called Pact of Concord, a pact signed in 2013, where the previous year in 2020 it was re-signed again, is a contract that is signed between the teams, Formula 1 and the International Automobile Federation. It focuses on determining the aspects related to the commercial management of the category, i.e. everything focused on the distribution of television revenue, prizes or bonuses per team. 

Finally, the last point to highlight would be the receipt of revenue for the brand name. For example, Ferrari, one of the brands competing in Formula 1, has not won for 11 years but is still the company that receives the most money with a total of 180 million. The concept is called "Long Standing Teams". Ferrari receives money for its contribution to the competition and for its history and track record. This year for this factor alone it received a total of 68 million dollars. There are also other companies that receive this income, such as McLaren. 

Do you think it's totally fair for companies?


Here is a list of the 5 highest paid teams:
- Ferrari: 180 millons
- Mercdes: 171 millons
- Red Bull: 161 millions
- McLaren: 97 millions
- Williams: 79 millions  

HERE you can see more information about pilots' salaries.

Do you think they are overpaid?




Comments

  1. Laia Passolas16 November 2021 at 14:14

    Interesting article! In my opinion I believe it is a good idea to create those Pacts and rules as they make the soprt more fair and clear. I knew that Formula 1 moved a lot of money but I wasn’t aware of that huge quantity.

    ReplyDelete
    Replies
    1. The Pit stop News20 November 2021 at 11:35

      Joaquim Passi
      I think the same. In my opinion every sport should follow a minimum of economic rules like these because that's what keeps many sports making money year after year.

      Delete
  2. Núria Figueras21 November 2021 at 04:17

    I did not know that Ferrari had not won over the last 11 years, and it is surprising that despite that it is the highest paid team from all. I think these quantities should be mostly based on the racing results and less about the brand image and seniority

    ReplyDelete
  3. The Paparazzi21 November 2021 at 04:58

    I suspected that Ferrari was the highest paid company, but I didn't know that it hadn't won anything in so many years. As for fairness, I think that as in all sports, some companies manage to put themselves forward more than others because of their popularity but also because of their marketing exposure strategy. I don't think that one day it will be fair between these different companies.

    Morgane DOUCET

    ReplyDelete
  4. extrem sports21 November 2021 at 08:46

    Alejandro Viladomiu

    I think the prices are a bit excessive but at the same time fair since the pilots risk their lives when they get behind the wheel, and the other thing is that the prices should be distributed more because those who really do the hard work are the engineers and mechanics.

    ReplyDelete

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