Formula 1 chairman Chase Carey says there’s ‘No free lunch’ for F1 teams
$273 million is shown on the most recent financial report. That money is sent directly to the teams in the form of prize money.
While that’s an insanely large number and an impressive payout for any racing series, it’s also down in terms of F1. At the same point last year, the payout was $316 million.
A drop of $43 million hasn’t gone un-noticed within to the F1 paddock. Carey sat down to detail the reason for the drop and explain where the lost money has been redistributed.
“I think the sport has been underserved by a continual short-term focus,” stated Formula 1 chairman Chase Carey. “I think we’ve got some fresh momentum back into it.”
“A lot of things were not going in the right direction in recent years, but this year attendance is up, viewership is up and I think we’ve got a much more positive spirit behind it. The sport needed fresh energy and investment.”
“To grow things, well, to use an American phrase, there are no free lunches. We didn’t have an organization that was able to properly develop, to build the sport.”
“We had no research, we had no marketing, we had no digital organization and realistically if you don’t have capabilities like that, you are going to fall behind.”
“When you’re building a digital organization, usually you have costs before you get returns. If you’re building research capabilities, normally you have to invest in those before you get to use them. It’s the reality of building capabilities that haven’t existed.”
“To do things like the Trafalgar Square demo, to do things at broader fan fests, requires investment. However, all are investments in the future of the sport.”
“From the teams’ perspective, sure, everybody would like to have free lunches and get the growth without the investment.”
“The world doesn’t work that way. I think that there is an understanding of and an appreciation for what we’re doing, and in many ways we’re very much agreed on what needs to be done for the sport.”
“When we started the year, the first three months of the year we had three people,” he said. “If you look at things like the marketing and research and digital, our head of digital started three months ago, our head of marketing started four months ago.
“We have been putting the team in place as the year has evolved and in many ways a large part of our operating organization is new. Before, we really didn’t have a large part. We had a financial and legal staff but we didn’t have an organization able to support the business operationally.”
In F1, teams live and die by the series fund distribution. That revenue is generated from TV. It’s then redistributed to the teams based on a number of factors, mostly their ranking in the constructors’ championship.