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Formula One is a multi-billion-dollar motorsport industry, employing more than 50,000 people around the world. Every year, a large portion of F1’s underlying profits is used for the yearly prize fund. However, many F1 fans still wonder how much these racing teams make for winning a race.
Formula One’s prize fund for any given year is split into two main categories. Nearly half of this fund is allocated to Column 1 payments, divided equally between the top ten teams. Another half of the fund is allocated to Column 2 tiered payments, based on the previous year’s Constructor results.
If you want to know more about how much F1 teams make for winning races, we’ll explain everything you’ve always wanted to know. We’ll look at how the prize fund is calculated and distributed, whether Formula 1 drivers earn race-winning bonuses, and more!
How Much Do You Earn For Winning A Formula 1 Race?
Across more than 30 countries, Formula 1 employs upwards of 50,000 people. However, many. F1 fans are still unsure regarding how F1 teams earn money. While Formula 1’s management may arrange certain funds for teams, sponsors and partnerships are key to how these teams earn money.
While Formula 1 is a business that employs these teams and drivers, Formula 1 heavily relies on these teams and their deals. If you think of F1 as a billion-dollar industry, these teams and their drivers are the smaller businesses that keep this industry afloat. Due to this, investments and financial arrangements are important aspects of how these teams secure their income.
Prize money earned from races is another critical aspect in this regard. To this day, many F1 fans have wondered how much teams make for winning one of these legendary races. Before we explain how Formula 1 calculates race-winning bonuses, it’s important that you better understand how an F1 team’s salaries are calculated.
For F1 pit crew members, more salary information is available. We’ll take a closer look at this later when we look at how much these pit crew members earn from won races. Unfortunately, less information is available regarding the salaries of F1 drivers and other team members.
There are reasons for this lack of information, which comes down to salaries varying between different teams. When you compare the salaries earned by prominent teams like Ferrari and some of the smaller teams, you’ll notice large disparities. This is because drivers and team members privately negotiate their salaries.
Likewise, the amount an F1 team earns from winning a race will also vary. However, based on previous race winnings, we can determine an average range. Based on available data, the amount an F1 team earns from winning a race can range anywhere between $100 million and $140 million. However, you might be wondering about how this prize money is calculated and distributed.
How Does F1 Calculate Race Winning Bonuses?
As we mentioned above, the money earned from winning an F1 race can range anywhere from $100 million to upwards of $140 million. In the coming years, this value to rise even further. However, many Formula One fans have wondered how these race-winning bonuses are calculated.
The prize fund for any given F1 season is equal to half of Formula One’s underlying profit. From this, you can see that the prize fund may increase as profits increase. Essentially, the more lucrative F1 is, the higher the prize fund’s value will be. This prize fund is split into two main categories.
Nearly half of the prize fund is allocated to Column 1 teams. This amount is equally distributed between the top ten racing teams. Column 1 teams are classified as those F1 teams that have finished in the Top Ten for a minimum of two of the past three seasons.
The other half of the prize fund for any given year is allocated to Column 2 payments. Basically, Column 2 payments are awarded based on the previous year’s Constructor Standings. Once again, this sum is divided between the Top Ten teams. However, unlike Column 1 payments, Column 2’s prize fund is not divided equally between these ten teams.
Instead, a tiered payment system is used. This means that the team that placed first in the previous year’s Constructors Championship will receive up to 19% of the Column 2 prize fund. The tenth team, on the other hand, typically receives around 4% of this fund.
Unfortunately, there are no longer Column 3 payments to teams who placed outside of these ten spots. However, a pre-determined percentage of the prize fund goes to teams like Ferrari and McLaren due to their history and importance to Formula One. We’ll discuss this aspect later, but you may be wondering how F1 teams distribute this prize fund.
How Do F1 Teams Distribute Prize Money?
In the previous section, we explained how Formula One calculates the prize fund for a given year. Of course, this is equal to an estimated half of F1’s underlying profits. While nearly half of the prize fund goes towards Column 1 payments, another half goes towards Column 2 payments. However, you might still be wondering how the teams distribute this prize money.
Firstly, let’s consider the drivers in these racing teams. Many F1 fans are under the impression that drivers receive race-winning bonuses. After all, they’re behind the wheel! However, this isn’t the case! This is because Formula 1 teams negotiate salaries with their drivers.
However, many drivers may have winning clauses added to their contracts. In these instances, a driver may receive a bonus for winning a race. However, this isn’t guaranteed. As with the salaries of drivers, the way teams utilize their prize money is a well-guarded secret. Ultimately, this will vary between different racing teams.
However, there are some F1 team members that do receive race-winning bonuses. Of course, behind every great F1 driver is a dedicated pit crew waiting in the wings to service their vehicle. When a team wins a race, the pit crew members generally receive a bonus. This is a tiered system, with the crew chief receiving the largest bonus.
How Much Do Formula 1 Pit Crew Members Earn For Winning A Race?
Like Formula One drivers, pit crew members also earn salaries. As we mentioned earlier, there is more salary information available regarding pit crew members. This information also provides valuable insight into how much different pit crew members earn when their team wins a race.
A pit crew is typically comprised of twenty people. It’s important to note that pit crew members are full-time employees with their teams and do not just work during races. Due to this, pit crew members also earn a salary like drivers. Once again, this is privately negotiated between pit crews and their teams.
However, available compensation data has revealed how much these pit crew members earn per race and how much their race-winning bonuses are. Ultimately, these values vary between different roles on these crews. Firstly, let’s look at how much a pit crew chief earns per race.
Generally, the pit crew chief earns around $10,000 per race. When a race is won, the crew chief will typically earn an estimated $5000 bonus. Tire changers earn the next highest pay, taking away an average of $5000 per race. When a race is won, tire changers typically receive a bonus of around $2500.
Per race, tire carriers earn less than tire changers. This is estimated to be around $3500 per race. However, when a race is won, tire carriers typically receive a similar race-winning bonus to the tire changers. Once again, this is an estimated $2500.
The jackmen and wingmen on an F1 pit crew take home an estimated $3000 per race. When a race is won, these crew members will each receive a bonus of $500. Despite varying salaries, stabilizers, lollipop men, and fire extinguishers receive the same race-winning bonus. When a race is won, these crew members will receive an estimated $250.
Does F1 Equally Distribute Prize Money Between Racing Teams?
In recent years, Formula One has earned around $2 billion in revenue per year. As we discussed earlier, F1 prize money is calculated according to this revenue. Generally, the primary Formula One prize money is calculated at 47.5% of F1’s total profit. It’s no wonder race-winning bonuses can be so valuable!
However, many F1 fans have wondered whether this prize money is equally distributed between the various racing teams. Unfortunately, this isn’t the case. Due to unequal prize distribution, many smaller racing teams face uncertain futures in F1. This is evident when you consider the 2015 F1 Constructor standings.
As we explained, standings from previous years often affect how the prize money is distributed the following year. In the 2015 season, Ferrari placed second in these Constructor standings. However, despite placing second during this season, in 2016 Ferrari earned $21 million more in prize earnings than any other team on F1’s roster.
In fact, one of the reasons for this is a prior deal that was made between Ferrari and Formula One. As we discussed earlier, nearly half of F1’s underlying revenue goes toward teams. Now, let’s consider this amount as 50% of F1’s underlying revenue.
An estimated 23.7% of this goes towards Column 1 payments, with the 23.7% being equally divided between the top ten racing teams. Another 23.7% of this 50% goes towards Column 2 payments, which is tied to the constructor’s standings from the previous year.
However, this leaves an estimated 2.6% unaccounted for – which is where Ferrari’s deal with F1 comes into play. As per this agreement, 2.5% of the 50% used for prize money goes towards Ferrari. Ultimately, this is due to Ferrari’s status as one of the oldest and most prominent teams in this motorsport.
This should give you a better understanding of why Ferrari earned more prize money than any other team in 2016, despite placing 2nd in the previous year’s Constructor Championship. McLaren has a similar deal with F1, which is based on their perceived heritage and importance to this sport.
When you look at 2016 payouts, teams like Ferrari and Mercedes received payouts that were often more than double or triple the payouts received by smaller teams. In fact, despite placing behind Sauber in the 2015 Constructor Standings, McLaren earned nearly $30 million more than Sauber.
Once again, this is largely due to private deals struck between F1 and teams. However, this didn’t stop Sauber from filing a complaint with the European Union’s Competition Committee in 2016. This complaint was filed as an inquiry into F1’s governance and how revenues are distributed.
In addition to this, many F1 employees and fans have spoken out against the way revenue and prize money is divided between teams. Despite Formula 1’s revenue steadily increasing over the years, many smaller F1 racing teams like Sauber are struggling to survive.
Many experts believe these complaints may force some change in the F1 landscape. After all, bigger teams like Ferrari and Mercedes may not want to willingly lower the revenue they earn. Only time will tell whether Formula 1 will review its practices and policies.
Each year, Formula One’s prize fund is divided into two main categories. The fund itself is equal to roughly half of F1’s underlying profits for the year. About half of this money is allocated to Column 1 payments, which are split equally among the top ten teams. Based on the previous year’s Constructor results, the other half of the funds are allocated to Column 2 tiered payments.
Teams like Ferrari may also receive percentages of these funds due to private agreements with F1. Ultimately, F1 teams decide how the prize money is distributed. While drivers do not receive race-winning bonuses, pit crew members do. However, drivers may have their own agreements in their contracts with their racing teams.