OT: F1 Prize Money Fund, ...get me a Cray Options

[richardL]

Did you see that a '97 version of the Concorde Agreement was made public. This is the section of how prize money is distributed:

THE PRIZE FUND

3.1 The Commercial Rights Holder shall divide the Prize Fund into three (3) parts and pay the share due to the Competitor in accordance with the provisions of this Clause 3, as follows:

a.) twenty per cent (20%) according to final qualifying results;
b. forty-five per cent (45%) according to race results;
c. thirty-five per cent (35%) by way of fixed compensation.

Subject to Clause 6, the payments referred to in Clause 3.1 shall be distributed according to the following scale:

a. Final Qualifying results (20%)

1st: 2.00% 6th: 1.30% 11th: 0.85% 16th: 0.60%
2nd: 1.75% 7th: 1.20% 12th: 0.80% 17th: 0.55%
3rd: 1.60% 8th: 1.10% 13th: 0.75% 18th: 0.50%
4th: 1.50% 9th: 1.00% 14th: 0.70% 19th: 0.45%
5th: 1.40% 10th: 0.90% 15th: 0.65% 20th: 0.40%

b. Race Results (45%)

------ Distance ------
1/4 1/2 3/4 Finish
1st: 1.020% 1.020% 1.020% 5.440%
2nd: 0.780% 0.780% 0.780% 4.160%
3rd: 0.630% 0.630% 0.630% 3.360%
4th: 0.510% 0.510% 0.510% 2.720%
5th: 0.390% 0.390% 0.390% 2.080%
6th: 0.300% 0.300% 0.300% 1.600%
7th: 0.240% 0.240% 0.240% 1.280%
8th: 0.216% 0.216% 0.216% 1.152%
9th: 0.192% 0.192% 0.192% 1.024%
10th: 0.168% 0.168% 0.168% 0.896%
11th: 0.150% 0.150% 0.150% 0.800%
12th: 0.138% 0.138% 0.138% 0.736%
13th: 0.126% 0.126% 0.126% 0.672%
14th: 0.114% 0.114% 0.114% 0.608%
15th: 0.102% 0.102% 0.102% 0.544%
16th: 0.090% 0.090% 0.090% 0.480%
17th: 0.078% 0.078% 0.078% 0.416%
18th: 0.066% 0.066% 0.066% 0.352%
19th: 0.054% 0.054% 0.054% 0.288%
20th: 0.036% 0.036% 0.036% 0.192%

(Distances to be rounded up to a whole number of laps)

c. Fixed Compensation (35%):

shall be divided into two equal parts of 17.5% each:

(i) one such part shall be distributed to the competitors in proportion to the number of FIA F1 Championship points scored by each competitor in the previous two half seasons; and

(ii) the other such part shall be distributed equally among the top ten competitors in the FIA F1 Championship for the previous two half seasons and if the top ten competitors represent less than twenty cars to the next highest competitor and so on until compensation has been distributed to twenty cars provided that no competitor shall be entitled to such distribution in respect of a number of cars other than that which it entered for the whole of the previous FIA F1 championship and in any event shall not be so entitled in respect of more than two cars.


I think I need an English translation of section c(ii)!! I think it means that some is distributed equally among the first 20 cars, some in proportion to previous points scored, then individual prize money for the race at various stages and also qualifying. I hope Bernie has a good calculator!

By my reading, even the worst case (Minardi last year) with no previous points and last to qualify and last to finish for both cars would receive a total of 3.35% of the prize fund - on a fund of (say) $10M, that would be $335,000

R

[blitZ]

Yeah, but $335,000 is a small drop in a large bucket of the expense to campaign an F1 car. I still wonder how those weaker teams manage to return year after year. Their sponsors must be incredibly understanding.

[lapuwali]

The prize fund is a LOT more than $10M, too. It kept a number of the backfield teams financially afloat. You can also see why the top teams can spend $400M (or so) per season, and still manage to turn a profit. Prize money plus sponsorship money plus some side consultancy deals (McLaren and Williams have both built racers for other series, for example) is what allows them to keep going.

This is also one reason I think the current emphasis on cost-cutting is mis-guided and silly. Leaving aside the fact that the current schemes actually cost far more money than they're saving, but if McLaren can spend what they spend year after year, then it's not "too expensive". McLaren's budget was roughly $100M 10 years ago, and it's $400M now. They're talking now about trying to reduce budgets to $80M "to be successful", which I'd venture is still 3-4x what Minardi's been spending these last few seasons, and probably on par with fellow backmarkers Jordan. Even Sauber was spending that much.

Cost-cutting on the cars is also not going to work, as it's payroll that costs so much, and I doubt the top spenders are going to lay off a lot of people if they find them useful now. Toyota is very likely spending nearly twice as much as even Ferrari, and look what it's getting them. Something like 1000 people are on the Toyota F1 payroll, which is very likely $100M right there, let alone the facilities to house those people. I'll bet the direct cost of the cars themselves are less than 50% of their budget, perhaps less than 25%.