F1 Racing is Very Expensive, Ferrari (NYSE:RACE) Does Not Say How Expensive
F1 drivers receive some of the Top salaries in all sport with the Ferrari’s (NYSE:RACE) Sebastian Vettel paid about $50-M. But the cost of running a F1 team does end with the drivers, as the Top teams employ nearly 1,000 staff and their paychecks are in topgear too.
The table below shows the 10 biggest staff bills in the history of F1 and reveals that current champion MercedesAMG is on Top
According to the Silver Arrow’s latest financial statements its 849 workers were paid $94.3-M, which comes to $111,000 per person. It is 26.9% of the team’s $351.2-M total costs and is understood to be its biggest expense after research and development.
This investment in staff has driven MercedesAMG to the F1 title for the past 4 years running and its latest financial statements show that it had 742 employees in the design, manufacturing and engineering departments with a further 107 in administration.
The rank data is based on the results of teams which are located in the UK and file publicly-available financial statements.
That covers 7 of 10 teams with the exceptions being: Swiss-based Sauber, Italy’s Toro Rosso and Ferrari. Of those, Ferrari is known to have the highest headcount but the precise number is a closely-guarded secret as The Sucderia a division of the ultra-luxury Supercar maker and does not file operating numbers. However, it is estimates for be in excess of $550-M.
F1 Racing is very expensive
Last year the Williams team employed 793 people who were paid $70.6-M earning it 6th place on the ranking. Reflecting this relatively high spending on staff it finished 5th in the standings last year.
Red Bull Racing’s F1 outfit has also diversified but the majority of its business is dedicated to racing and the same is true of Mercedes.
It is unclear whether the driver salaries are included in any of the disclosed totals. Some teams directly pay their drivers so it shows on their wage bill. Other drivers set up companies to sign their race contracts with the teams.
In those cases the fee will be a cost to the team but is not necessarily be included in staffing expenses.
F1’s owner Liberty Media (NASDAQ:LMCA) is planning to introduce a cap on F1 team spending from Y 2021 when the current contracts expire. It will reportedly be set around $150% which would fuel widespread job cuts, as MercedesAMG’s staff bill alone comes to just under 50% of Liberty’s proposed limit.
The drivers pay will be excluded from the cap but for many other staff, the super salaries that F1 is famous for could be coming to the end, on not. We will see.