A London-based publishing house, Raconteur, has summarised the business of F1 and the cost split-up involved in each part, of the car as well as the management.Raconteur has also explained the bigger picture of F1, other than cars, drivers, technical team and principals.
New Jersey based Delta Topco is the company that owns commercial rights to the F1 World Championship, till 2110. Topco is a group, owned by a number of firms, of which the private equity firm CVC is the largest stakeholder, of 34.6 percent.
Delto Topco has cleverly insulated itself from many risks of variable business factors, and has kept its business on a safe and tight leash. It does not own any tracks or teams, thus keeping costs highly anticipatory and not susceptible to shoot unexpectedly. It makes revenue from six solid sources / means, and allocated a huge chunk of profit for awards and prices for teams.
Teams that participate adhering to (Fédération Internationale de l’Automobile) FIA’s F1 rules, have the most to spend and gamble.
A team budget’s can be split in to four categories: salaries, that add up to Rs. 388.84 crores ($62.58 million), R&D expenditures, which go up to Rs. 379 crores ($61 million), production costs of around Rs. 361 crores ($58.11 million) and the operations costs of about Rs. 223.68 crores ($53.64 million).
Then the F1 car cost; divided into sub-assemblies: The heart of an F1 car, the V6 Turbo Hybrid Power unit costs around Rs. 32 crores ($5.2 million), transmission system costs about Rs. 6.89 crores ($1.11 million) and the carbon fibre monocoque chassis requires around Rs. 9.25 crores ($1.49 million), to begin with. Overall, a 2015 F1 car cost is around Rs. 55.5 crores ($8.94 million).
While all the parts of an F1 car share the duty of performing and winning the races, some vital components also take up the job of earning some money for the team. Parts like side pods, rear wing and airbox of a Formula 1 race car, bear sponsorship graphics, each of which is sold for Rs. 157.29 crores ($25.3 million).
Read more about the business of Formula one here – Raconteur</