Formula 1 may or may not be in the best of health, depending on who you talk to.
Massive cost hikes have driven teams to the wall (Force India), only to see them rescued by billionaire consortiums. Nothing new there, Bernie Ecclestone ‘rescued’ Brabham in similar circumstances. Tyrrell F1 was ‘saved’ by British American Racing in the late 1990s.
But new owners Liberty are determined to demonstrate they are not Bernie. Where under the Ecclestone empire, teams had rules stability, nowadays radical change has become the new normal.
Gone, under the current management, is the tendency for F1 to agree to races in weird locations where the locals are too busy scratching out a living to have the luxury of passions like motorsport. Azerbaijan, anyone? Bet that’s high in the bucket list of most F1 fans.
The ‘halo’ arrived with indecent haste, though of course safety tweaks can be announced and enforced from weekend to weekend.
Liberty has cut costs, slashing TV payments out to teams and cost-loading them for the privilege of being in F1.
Steering such an unwieldy beast takes a cool hand and nerves of platinum.
At stake are revenues far beyond ‘fabulous’. All dollars quoted are $USD.
With around 20 grand prix races every year in 20 different countries F1 is one of the few truly global world championships. It is be-studded with superlatives:
• Most lucrative motor-sport: As far as the yearly revenue is concerned Formula 1 generates somewhere between $1.5 to $2 billion a year. A fair chunk of that is distributed among (up to) 10 F1 teams who in return spend between $100 million to $500 million a season on elite level motor engineers, research & development and of course on driver salaries.
• Massive driver contracts: on-salary formula 1 drivers can make around $5 million a year while the top drivers are among the highest paid athletes in the world. We’re talking massive money: Sebastian Vettel’s $50 million a year contract with Ferrari, current world champion Lewis Hamilton’s new deal worth $40 million a year. Michael Schumacher remains the king of the earners, by dint of having had a $24million salary and endorsements that in the years before his retirement earned him substantially more – around $32 million a year by some estimates.
• Most viewers: F1 is by far the most popular motorsport in the world, and that means massive income just from the coverage. Globally it is the seventh-biggest sport by TV audience (down from a high of third). Analysts in global business media say 550 million people tune in every year at some stage of the Formula 1 season which runs from March to November. The FIA reckons the figure is more like a billion.
• Pundits reckon the TV viewer numbers have actually declined from around a billion to 500 million. More to the point, they also say the audience has halved in ten years. The consensus is that this is due to Formula 1 turning to pay per view in many countries. Nowadays of course, PPV is not the clever platform it once was and the F1-PPV love affair is creaking toward an end.
If anyone still wonders why New Zealand couldn’t host F1, consider the fee to do so, separate from promo and circuit build/compliance spending. The cost of hosting an F1 grand prix is around $250 million for a 10 year period. Not the sort of change you’d make holding sausage sizzles.
Single mega-event stats: who’s watching what?
As an aside, some pub quiz ammo: what do you reckon is the single biggest sporting event by audience?
Not hard to answer: ‘proper’ football, the FIFA World Cup, with 3.5 billion viewers.
Those who think the Rugby World Cup would be second are in for a disappointment – that would be the Tour de France cycle race with 2.6 billion viewers. It is also the best-attended single sports event in the world.
Rugby’s big show is a lowly seventh with 789 million viewers, and another classic cycle race, the Giro d’Italia, is eighth with 775 million.
Sorry race fans, F1’s not even in the top ten listing of single events. Not even Monaco. Top audience numbers in recent years go to the new USGP at the Circuit of the Americas: 96.1 million.
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