F1's Revenue Stream.

[Super Tourer]

In the January issue of BusinessF1 their cover story is BE and the banks, part of the article covers projected revenue for 2005.

We rarely see any figures behind F1, so any glimpse is always interesting. Obviously these are topline figures.

Predicted revenue for F1 (essentially FOM's income).

2005 - $710M

Ten years ago the figure was only $126M, from this it shows that the biggest increase in revenue comes from TV rights, which were only $50M in 1994. Circuit fee's were $40M in 1994.

Of the $710M the bulk of of it is TV rights ($380M), with circuit fees contributing ($190M). Then we have trackside advertising bringing in $60M. hospitality $35M with a similar amount from race sponsorship. Finally video games rights bring in $10M.

Under the alleged current shareout, FOM/BE and the assorted companies take 60% ($426M) with the 10 teams sharing the remaining $284M.

In the 2002 accounts for Formula One Association ltd the turnover (revenue) was $642M, with cost of sales at $288M (presumably largely the payments to the teams)

The above is essentially what the GPWC/BE argument is about so it's interesting to see some figures attached to the debate. It's also clear that the alleged extra $500M BE has offered the teams over 3 years (IIRC) doesn't make much of a dent in the income.

I've recently read that the GPWC believe that they can increase revenue to around $1Bn per year, believing F1 to be commercially under developed in some areas.

It's also evident that whoever runs F1 costs still need to be cut dramatically.

To put F1's current $700M annual income into perspective, Toyota and Ferrari alone probably spend that in a year between them. Next year, the 10 teams on the grid will probably spend $2Bn between them, if they took every penny of the available revenue, they would still be footing 75% of the bill themselves.

[Kicking-back]

Clearly the benefits of being in F1 (perceived or real) must be more than the cost of competing.

[Logrence]

I'm trying to think why these sort of figures would be made public...always something astir when Bernie leaks this kind of stuff - he has always been very secretive about F1 and money, just can't imagine what he's up to now.

He owns BusinessF1 or something, doesn't he? Or is that EuroBusiness or whatever?

That's a two-sided statement there, K-B - manufacturers enter F1 because of the perceived benefits, and the GPWC is being threatened because of the discrepancy between the perceived benefits and real benefits of being in F1.

[Silk Cut Jaguar]

Without having seen the article I'd guess a lot of the figures are educated guesswork. The TV companies must release how much they pay for rights somewhere in their budget reviews and the like.

[RWC]

Very interesting figures ST.
Yes they prob are guessed a little but they give us a good idea of where the money goes in this sport

.....into the pockets of bernie

[RTH]

I would like to see a truthful graph of TV viewing figures for the last 10 years , both total and individual countries, I am not aware that this is anywhere in the public domain.

[Adam43]

It is regularly published in F1 Business - or at least the last few (3?) years are. From what I recall they don't show much. the main things that stick out are the individual countries are affected by their own drivers. Britain has taken a dive since Damon and Spain is on the up and up because of Alonso (helped as his appearence has enabled a regular GP show!).

[Red]

Sure they are, not 10 years back perhaps, but they are. www.mediametrie.com.

[RWC]

There are lots of various related companies of which one can go through the books and determine how much went to a third party-as silk cut says

It allways amazes me the dodgey the estimates of teams budgets.They sound like they are dreamt up by f1 people trying to make f1 sound impressive.

A couple of years ago one of the magazines printed a very good article on team budgets.
It was researched by accountants who went through the company records of the main teams (which companies are required to make public because they have a share structure...or sumsuch...)
They had to do some guesswork with fiat/ferrari/marlboro and income from the concord agreement + some minor aspects of some other teams but generally they allmost completely accounted for all the teams budgets.

Needless to say,the overall team budgets were massively less than the common rumours had them ,but the point is that there is quite abit of info out there allready.

This hasn't got much to do with the secret concord agreement but i thought it interesting enough(?) to mention

[Super Tourer]

F1 finances (teams or otherwise) have always been something of rumour and speculation. I generally get my info from BusinessF1.

It's also worth nothing that as a general rule for every $1 spent on sponsorship you have to spend $2 to support it - via hospitality, advertising, PR and marketing. Obviously this will not be accounted for in team budgets, but it's likely that the main manufacturers are spending considerable sums on top of developing and funding engines plus 'sponsoring' teams.

For example, look at the amount of trackside avertising Toyota bought this year, similarly remember Jaguar's Racing's first British GP, the marketing men nailed green Jaguar branding to almost every available surface - all at an additional cost to the money they were spending on the team.

[RWC]

Yes,i remember that,JAG went nuts in their first year!

(and off topic again,sorry) My fave was the magazine add with a photoshopped picture of a race track shaped like a leaping cat.It actually looked like it would be awsome to race on! lol