Ferrari's forty-million dollar man

[theforce]

On ESPNF1's Facebook site we asked readers to send in their questions on the financial side of Formula One. In the first of two columns, Formula Money's Caroline Reid looks at teams and drivers … in part two in a fortnight's time she will examine circuits and the FIA


How much are the drivers paid … and who has been the worst-paid champion?

The best paid driver in 2010 was Fernando Alonso, who received $40 million in salary from Ferrari - a record for any driver. He hasn't always been top of the pile though and is also the worst-paid champion in the last decade. When he won his first title in 2005, as a relatively unknown driver, he received 'only' $6 million from Renault.


Does a top IndyCar or NASCAR driver get paid more than their equivalent in F1?

The very top F1 drivers get paid more than IndyCar or NASCAR drivers, though there are more mega-earners in NASCAR than there are in F1. Alonso's $40 million compares to $30 million for highest-earning NASCAR driver Dale Earnhardt Jr, however around a dozen NASCAR drivers made $10 million or more in 2010, compared to just five in F1. Most top IndyCar drivers are paid around a tenth of their F1 and NASCAR equivalents


How much money does a top engineer (Ross Brawn, Adrian Newey etc) make?

The top engineers are paid more than most of the drivers. Adrian Newey, for example, is believed to get around $10 million annually from Red Bull Racing, making him the team's highest paid employee ahead of both of its drivers.


How much does it cost to run a mid-table F1 team, including car build, development, travel, promotion etc over a entire season?

The average team budget in 2010 was $166 million



Do high-profile rich owners (Branson/Mallya) run teams at a loss to offset costs against their corporate profits?

The investment in Formula One made by the majority of team owners is allocated from their marketing budgets and is therefore a cost for them so accordingly any taxable profits will be calculated after this has been deducted. Along these same lines, the teams' profits are calculated after deducting all of its costs from its revenues. Teams tend to avoid trying to make a profit because this situation would indicate that they have not spent all the money which was available to them during the season. Teams can always invest more money to improve their performance so unless they win the championship it is hard for them to justify not spending everything they have. Whilst making a loss is not ideal, because it means that the owner has to pump in additional investment, losses can be offset against the team's future tax bill, so there is an upside.


Teams earn from FOA according to how they stand in the championship after the season. But do they get any money each race, specially the driver who had won the race?

F1's prize money is paid out based on the teams' positions at the end of the year, though teams also receive some travel and freight assistance, which increases for the flyaway races. Unlike most sports, there is no prize money for the drivers.


In terms of cost to run against points, which was the most and least successful team in 2010?

The best performing team was McLaren, which spent an estimated $460,000 per point it scored in 2010. The worst were the three new teams, who together spent around $200 million without gaining a single point.



Poor Alonso, only got paid 6mill in 05:-P. Does anyone know if thats more than what Jenson in 09 or Seb got paid, since they were fairly poor performers and unknowns repectively!

[Ste]

$40m isn't that much. Schumacher was on $45 at one point plus his sponsorships and endorsements. I remember reading that he earned around $85m at the peak of his earning.

[Rob]

MS was paid £80 mil in 2004 and in 2005 had a cut to £60 mil

[Rob]

Poor Alonso, only got paid 6mill in 05:-P. Does anyone know if thats more than what Jenson in 09 or Seb got paid, since they were fairly poor performers and unknowns repectively!

Fernando has made up for that 6mill thats for sure. Think JB wasnt on that much last year due to the Honda pull out and having to take a big cut. I cannt remember how much it was or how much he was paid.

[Anni]

MS was paid £80 mil in 2004 and in 2005 had a cut to £60 mil

:-E

[Alessandra]

I've asked often but remain unclear -what do F1 drivers spend their incomes on? I'm not interested in their private lives, just what does the job demand of them e.g. personal managers, physios, F1 driver's licence, travel, accomodation etc etc. separate from what the team provides for them.
My guess is that whilst it's a very well paid job, to say the least, there must be pretty substantial outlays that are necessary and couldn't be met without a large salary. Or perhaps I'm quite wrong.............

[Alessandra]

I've asked often but remain unclear -what do F1 drivers spend their incomes on? I'm not interested in their private lives, just what does the job demand of them e.g. personal managers, physios, F1 driver's licence, travel, accomodation etc etc. separate from what the team provides for them.
My guess is that whilst it's a very well paid job, to say the least, there must be pretty substantial outlays that are necessary and couldn't be met without a large salary. Or perhaps I'm quite wrong.............

[Anni]

I've asked often but remain unclear -what do F1 drivers spend their incomes on? I'm not interested in their private lives, just what does the job demand of them e.g. personal managers, physios, F1 driver's licence, travel, accomodation etc etc. separate from what the team provides for them.
My guess is that whilst it's a very well paid job, to say the least, there must be pretty substantial outlays that are necessary and couldn't be met without a large salary. Or perhaps I'm quite wrong.............

That´s a very good question. I have no answer for you, unfortunatly. If I guess I would say they have to pay all the things you mentioned themself. I often wondered how the drivers with very little income can handle that all. Usually they drive for small teams who don´t have much money, so those teams would probably pay even less than the big teams.

[Ste]

MS was paid £80 mil in 2004 and in 2005 had a cut to £60 mil

Don't think the figures were in £ and that most definitely isn't his Ferrari salary. That'll include sponsorships and endorsements.

Edit: From Forbes:

Schumacher's earnings peaked at $80 million in 2003, when he won his record sixth World Drivers' Championship (he won a seventh title the following year). His $40 million salary was the highest in sports at the time and his income doubled when you factored in endorsements, licensing deals and championship bonuses

[Rob]

meant put $

[Poltergeistes]

That´s a very good question. I have no answer for you, unfortunatly. If I guess I would say they have to pay all the things you mentioned themself. I often wondered how the drivers with very little income can handle that all. Usually they drive for small teams who don´t have much money, so those teams would probably pay even less than the big teams.

I think it depends on which team the driver is at, because i remember last season button and rubens kind of hitchhiking airplanes together because that cost to get to the GP was on them, now mind you this was obviously private flight, but not just that i remember button and rubbens mentioning that this was kind of cuts they had to undergo when honda left, not just a much smaller paycheck from the team, but also they were left with much of the expenses the drivers has.

I know the drivers themselves pay for their flight, althought the ferrari drivers had sponsorship with piaggioaereo which took em everywhere (don't know if they are still there this season) but it wouldn't surprise me that in top teams like ferrari mclaren and mercedes, the teams have many other sponsors that we don't see on the car and clothing, traveling, hotels all these they must have exclusive deals because they are each like a very large company that's always on the move.

PS on a very candid interview from felipe last season from the spanish gp to monaco gp, his friend and reporter got to be backstage with felipe during the whole thing, and so when felipe went into the private jet the reporter asked, all of this, is this something that F1 drivers does just because they like to or because it's a necessity and he said nowdays it's a necessity, otherwise they can not meet everything on their agendas, and still be very fit physically because when the lights go out all the F1 show does become a sport, and your body will feel all those G's at eeach turn you make.

[Tifosi]

$40m isn't that much.

Relative to what Ste?

[Corey]

Well, the sad fact is some drivers get paid enormous amounts by the team while others in smaller teams NEEDS TO PAY THE TEAM to retain their seat...

Might be wrong but I read it from somewhere before.

[Poltergeistes]

Well, the sad fact is some drivers get paid enormous amounts by the team while others in smaller teams NEEDS TO PAY THE TEAM to retain their seat...

Might be wrong but I read it from somewhere before.


I think at one point or another every racer has done that, and it's not just now, it's always been done, that is the sad thing about motor racing, it costs too much, for the racers, at the begin, and it takes them most of their career paying for it.

then again to most drivers what matters most is the seat at said championship or car, only then can they start thinking about how to make a profit.

Another story i read not too long ago, was about how much it would cost nowdays for a driver to get to f1, every since his first go kart challenges all the way to actually starting a F1 gp, and at todays rate, it takes something around US$9 mi. that cost of course counting everything, not just from the drivers pocket but from sponsors and such, but that's how much it costs to build up a career to make it to F1, of course that alot of factors will decide how much money your family will have to take out of their own pockets.

And even today's drivers, even those that aren't from poor family, their family had to sacrifice alot financially speaking to get them racing, it's insane.

In a sad way it's a shame really, because we have some brilliant drivers, and have had brilliant drivers, but it kind of makes me wonder at what degree motor racing could go, or would have to go, if poor kids had the chance and the support to try the sport, like you try football for instance. can you imagine how many great racers there are, that simply never really had the chance to try it out.

The one thing they say all great drivers have in common is their born talent, at every age they've raced, they've showed something different about em, different from other racers. but unless your family has means and connections you're going nowhere. theres alot of people inside racing trying to provide this big push up for the young talents ( even felipe has that in brazil i think fernando must have something of the sort going on too) but still, this is a help that comes mostly from drivers, and individuals, sometimes from sucessfull teams, but still, there's no way of making engines, chasis etc cheaper, and that is what it comes down to at the end of the day.

[Anni]

I think it depends on which team the driver is at, because i remember last season button and rubens kind of hitchhiking airplanes together because that cost to get to the GP was on them, now mind you this was obviously private flight, but not just that i remember button and rubbens mentioning that this was kind of cuts they had to undergo when honda left, not just a much smaller paycheck from the team, but also they were left with much of the expenses the drivers has.

I know the drivers themselves pay for their flight, althought the ferrari drivers had sponsorship with piaggioaereo which took em everywhere (don't know if they are still there this season) but it wouldn't surprise me that in top teams like ferrari mclaren and mercedes, the teams have many other sponsors that we don't see on the car and clothing, traveling, hotels all these they must have exclusive deals because they are each like a very large company that's always on the move.

PS on a very candid interview from felipe last season from the spanish gp to monaco gp, his friend and reporter got to be backstage with felipe during the whole thing, and so when felipe went into the private jet the reporter asked, all of this, is this something that F1 drivers does just because they like to or because it's a necessity and he said nowdays it's a necessity, otherwise they can not meet everything on their agendas, and still be very fit physically because when the lights go out all the F1 show does become a sport, and your body will feel all those G's at eeach turn you make.

That´s interesting, didn´t know that all. Thank you! For sure the interview you mentioned is available on youtube, but is in portugese, isn´t it? :-s

[Alessandra]

Thanks for all the interesting replies (@7) above. I had not realised that they pay their own flight fares. That alone must take care of a good deal of the salary.
I'm still surprised that the drivers, or the teams, aren't a bit more open over this information because F1 is, by its very nature, an inaccessible sport for most; kids play football (girls as well as boys), cricket ( ditto), basket ball etc etc at school , but you can't jump in an F1 car at your local comprehensive school (in UK), compete with another school's team on Saturday mornings, go to annual driving training camps for young drivers (can you?). So who really knows about, far less understand it, other than those who stumble across it on a Sunday afternoon on the TV?

I think F1 should spend more time telling it how it, especially for the drivers who didn't come up from driving 'privileged' backgrounds, what's involved for 12 months of the year, the physical and mental training, the obligations those vast salaries (for some) actually represent. Also, some of the most interesting stuff I've seen on TV re. F1 over the past couple of years have been around mechanics, engineers, constructors, PA - all of which are open to women as well as men ( and we won't go there today!)

I believe Bernie's complained in the past that the sport doesn't get 'government' support - even less of a chance of that now - but if you just keep selling it based on the 'glamour' aspects, whatever they may be to the average fan, what do you expect in response?