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What’s it cost to compete in Formula One? An IndyCar comparison

May 22, 2013, 12:30 PM EST

AUTO-PRIX-F1-SPAIN-PRACTICE Getty Images

Christian Sylt and Caroline Reid cover the business of Formula One. More of their work can be found at FormulaMoney.com.

The cars lining up to compete in this weekend’s Monaco Grand Prix and Indy 500 may appear the same. However, with even the smallest Formula One teams running on budgets around five times those of their leading IndyCar rivals, the similarity is only skin deep.

The casual observer might be forgiven for thinking that IndyCar has the superior technology, as Ed Carpenter set a pole position lap speed of 228.8 mph for this year’s Indy 500; Mark Webber’s top qualifying lap at the twisty Monaco track last year was just 100.4 mph.

In reality, the IndyCar teams purchase controlled-cost specification chassis from Dallara, whereas their F1 counterparts are involved in a costly high tech arms race to make it to the front of the grid. Unlike IndyCar teams F1 competitors are ‘constructors’ who build their own chassis — and in the case of Ferrari and Mercedes their own engines — at a cost of hundreds of millions of dollars annually.

The leading F1 teams are constantly developing their machinery in order to eke out the extra split-seconds that will edge them ahead of their rivals. Big name brands such as Red Bull and Mercedes are willing to foot the bill because F1 is the world’s most watched annual sporting event and puts their brands in front of half a billion people worldwide.

As a result, the biggest spending F1 team Ferrari will run on an estimated budget of $470 million in 2013. This is more than 30 times the estimated $15 million budget of the leading IndyCar teams such as Ganassi and Andretti Autosport. The figures — supplied by Formula Money — below explain how the money is spent.

TOTAL BUDGET
Top F1 team: $470 million; Top IndyCar team: $15 million

This includes the following key areas of spending:

THE CAR
Top F1 team: $125 million; Top IndyCar team: $3 million

The largest single cost for most F1 teams is the design, development and construction of a bespoke chassis. F1 teams must construct their own chassis and although the manufacturing costs of an F1 car are a relatively small $15 million per year, top teams can spend well over $100 million on research and development.

All IndyCar teams must buy their chassis from series provider Dallara. The price is $345,000 per chassis, but the purchase of aerodynamic packages designed for different circuits can add another $150,000-$200,000. A team typically gets through three chassis per driver each year.

THE ENGINES
Top F1 team: $130 million; Top IndyCar team: $2 million

F1 manufacturers such as Ferrari and Mercedes spend more than $100 million annually on engine development. This is principally to supply their own teams, but they are required to also supply other teams with engines and typically charge $13 million per season to do so.

Honda and Chevrolet typically charge IndyCar teams around $1 million per year per driver for an engine package which will allow the use of eight engines.

TESTING
Top F1 team: $15 million; Top IndyCar team: $1 million

Restrictions on F1 testing in recent years have seen budgets slashed from $35 million to $15 million annually in order to cut costs. This is still far larger than the IndyCar teams’ $1 million annual spending.

DRIVERS
Top F1 team: $47 million; Top IndyCar team: $3 million

Two times world champion Fernando Alonso is one of the highest paid sports stars in the world, receiving an annual salary of $40 million from Ferrari. In contrast leading IndyCar drivers receive $1-2 million per year. Unlike F1 drivers they also receive prize money – $2.5 million for Dario Franchitti when he won last year’s Indy 500 – but are usually expected to give at least half of this to their team.

ENTRY FEE
Top F1 team: $3.3 million; Top IndyCar team: $456,000

F1’s governing body, the FIA, operates a complex system for entry fees where each team is charged a basic fee of $500,000, plus $6,000 per point scored in the previous season for the constructors’ champion and $5,000 per point for everyone else. This has left 2012 champion Red Bull Racing with a bill of $3,260,000 this year. In contrast, IndyCar teams pay $12,000 per car per race.

HOSPITALITY
Top F1 team: $13 million; Top IndyCar team: $1 million

Hospitality may seem like a frivolous extra but it is a crucial part of how an F1 team operates. Sponsors spend up to $100 million annually so expect to receive silver service treatment when they visit a Grand Prix. A top F1 team can spend more on hospitality in a season than an IndyCar team spends on its entire budget. In contrast leading IndyCar teams may spend up to $200,000 at a showpiece event like the Indy 500, but far less at other races.

KEY SUPPLIES
Top F1 team: Free; Top IndyCar team: $1 million

One area where IndyCar costs far outstrip F1 is in the area of key supplies. Due to the high level of exposure F1 generates, many companies are keen to supply top level products free of charge in return for becoming an official partner of the team. Ferrari, for example, has sponsorship from a range of automotive companies including Shell (gas), SKF (bearings), NGK (spark plugs), Magneti Marelli (electronics) and Brembo (brakes). A typical top IndyCar team spends around $1 million a year on purchasing similar supplies.

OTHER
Top F1 team: $136.7 million; Top IndyCar team: $3.5 million

*Includes salaries, travel and factory costs.

  1. f1fan1 - May 22, 2013 at 1:57 PM

    It’s the difference between world class/world championship formula car racing series (F1) versus a minor league series (Indy car) that has been steadily destroying itself by their own stupidity since 1996.

    There is basically no money left in Indy car. It’s an empty shell of its itself as compared to when it was run in the hey days under CART sanction.. Pity, but that’s the way it is.

    • manik56 - May 22, 2013 at 2:18 PM

      No money left in the series yet they put on the best show in the world. I can live with what we have in IndyCar just fine. I am not so sure Dixie, Dario & Helio among others would agree IndyCar is minor league. Chilton? Pic? That’s the big leagues!

      • f1fan1 - May 22, 2013 at 2:51 PM

        Some people like drinking fine wine and some people like drinking bathtub gin (and don’t know the difference).

      • purplesectornet - May 22, 2013 at 3:12 PM

        Best show in the world…yet the world isn’t even watching it…just makes me shake my head in amazement…

    • NotoriousKDV - May 22, 2013 at 3:03 PM

      Yep that beatdown that Alonso put on everyone in Spain was bathtub gin while the thrilling show that Indy Car put on in Brazil with a last turn pass by Hinch on Sato was fine wine. F1 races are extremely boring compared to the races that Indy Car puts on. But I guess a lot of people like boring. After all, soccer is the most popular sport in the world.

      • purplesectornet - May 22, 2013 at 3:18 PM

        We haven’t heard this line of reasoning before have we? When are you guys going to get it…no one *cares* about spec cars…lol….

      • f1fan1 - May 22, 2013 at 3:21 PM

        And some people seem to fall for league managed “competition” of underpowered, spec “race” cars and call it “thrilling”. It doesn’t appear to be very many though.

      • midtec2005 - May 22, 2013 at 7:27 PM

        You guys need to use your brain. How many entrants do you think there would be if Indycars rules were opened up to F1 levels? About 6? That would kill the series, and only the 500 would be left. Something good could come from that, but theres no way for you to know. It could also kill the 500 for good. We all know CART was awesome, but it’s gone and it can’t come back. It sounds like Derek Walker wants to get out of the spec chassis… but it takes time.

      • purplesectornet - May 22, 2013 at 8:18 PM

        Don’t you think they “F1 is boring”, “IndyCar is thrilling” statements get a little tiresome? All they have to do to get me back watching every race is simply do what they said they were gonna do and get more than one aero package out there, how hard is that?

    • racingfan27 - May 22, 2013 at 5:30 PM

      Comparing the two is like comparing apples and mangos. They’re two different series written to two different sets of rules for two different applications

      • greenarcher2013 - May 26, 2013 at 2:09 PM

        And the racers and the engineers/mechanics just want to race. They are both good for their own reasons.
        And lets be honest. How many people on here have actually raced or worked in either series? How many could even race at the lowest level? C’mon people. this division makes you all look stupid.
        One thing about Indy that I don’t like is the camera work. that could be better.
        What about WRC? That’s a racing series that kicks ass in it’s own way.

    • midtec2005 - May 22, 2013 at 7:27 PM

      That explains why Rubens won every race last year…

      • purplesectornet - May 22, 2013 at 8:16 PM

        Right because Rubens was at the top of his game when he went to IndyCar…lol…but Sato leads the championship as you right this…I’m sorry but you IndyCar guys are just pathetic…lol…

  2. indycarseries500 - May 22, 2013 at 2:14 PM

    So in your opinion CART would still be a minor league series since I’m pretty sure their budgets were never much higher than IndyCar currently.

    • f1fan1 - May 22, 2013 at 2:45 PM

      Wrong, CART budgets from the late 80”s through the earlier 2000’s were SIGNIFICANTLY higher than the current devolved state of the “Indy car” series as owned/operated by the H-G family.

  3. purplesectornet - May 22, 2013 at 3:16 PM

    CART actually had a legitimate claim as an F1 alternative – with a world champion coming to race there, Senna testing a car…IRL, IndyCar??…I’ll never forget all the fans that whole week, promising us all the Montoya was gonna crash…that he didn’t respect Indy…LOL…funniest week of racing ever….lol

  4. ditto65 - May 22, 2013 at 5:13 PM

    Why is there no thumbs up/down here?

  5. coreycjordan - May 23, 2013 at 12:17 AM

    Over the years, USAC/CART/IRL has had many F1 champions participate. Alberto Ascari, Jack Brabham, Graham Hill, Jim Clark, Jackie Stewart, Dennis Hulme, Nigel Mansell, Emerson Fittipaldi, Jacques Villeneuve and Mario Andretti to name a few off the top of my head. For 10 years, the Indy 500 was an F1 points race. What we have today is truly a shadow what it once was. It can be that good again, but not as a spec series and not with the limited money being spent.

    Now, don’t get me wrong… A spec series can produce terrific competition. When the hardware is generally the same, drivers and preparation make the difference. Drivers, in my opinion, are less of a factor in F1. As Schumacher hasn’t done much with 2nd tier equipment, it shows that the technology is at least as vital as the talent of the driver. In the IRL, you can’t gain a significant edge in equipment. This is demonstrated by the number of different winners each season, but also shows who are the top tier drivers. Still, many of the races (oval, especially) are quite boring, even with more passing than in F1. The IRL needs a sponsor with very deep pockets and a vision for what the series could become.

  6. sirheady - May 23, 2013 at 11:44 AM

    The IRL does not exist anymore you fools and INDYCAR is inching closer to reaching the Glory Days of CART.

    What is Ironic, is that the F1 of the 90s that I grew up with, is comparatively, much more distant to reclaiming those halcyon days than Indycar, in its current ideation is to recapturing the awesomeness of CART.

    I can guess most f1 fanboys commenting on this thread are just butthurt Champcar rejects

    F1 has sold out to the elite of the 3rd world and has lost its soul. Couple that with no legitimate proving ground for a driver to display his own unique skill and you get a stagnant formula that is only being carried by Hype.

    Indycar on the other hand, is the greatest proving ground for driver skill in the world. It still is more screwed up than a $40 hooker, but at least that hooker is going to church, in Rehab, and on the road to recovery.

  7. purplesectornet - May 23, 2013 at 2:03 PM

    Yeah right LOL.

  8. purplesectornet - May 23, 2013 at 2:13 PM

    And some of you wonder why I call IndyCar fans delusional lol…omg….lmao

  9. purplesectornet - May 23, 2013 at 2:14 PM

    At least I learned that Austin Texas and New Jersey are considered “3rd world” now! Bwaaa ha ha!

  10. ustabfast - Jul 31, 2013 at 10:40 AM

    Come on race fans, it doesn’t matter which is better. Here in the US we have it all.

    There is no time to worry about good-better-best. Each has its own values. Each will grow (NASCAR, Supercross as examples), based on the show. Or, each will downsize/evolve/face extinction (USAC/Indy, CART, board racing, Formula Atlantic, Can-AM, Air Races and Unlimited Hydroplanes are examples) as our tastes and sponsorship $$ change.

    Most of us have local dirt tracks where we can sit in the first turn and pick dirt from our teeth (while watching everything from clunkers to Outlaw Sprints. Most American’s have a NASACAR track readily available and an Indycar or Sports Car venue somewhat reachable via a 4 day weekend (with gas prices the Europeans only dream of). OK, so there are only 2 F1 circuits now (Canada/Austin). With any luck, we’ll get New Jersey next year.

    Plus, we have some outstanding motorcycle racing (Supercross, Outdoor MX and various street events). And, there is Drag racing, Stadium Trucks, various forms of Speedboat racing, events for quads, snowmobiles and even tricked out lawn tractors.

    Thanks to the expansion of cable sports networks we get all this on TV. Plus, we also get multiple Touring Car series, Australian V-8’s, MotoGP, and International Rallying. I really do miss the coverage we used to have for the Unlimited Hydroplanes. Oh well, my DVR is full of all the other races anyway.

    Each type of racing has its own virtues. My MX background has me partial to anything that runs in the dirt, but I love it all. I watch F1 and Endurance Racing to appreciate the technical pre-eminence. I watch Indycar for the good racing. I chose to only watch about the last 10 minutes of most NASCAR events. Like basketball, it doesn’t really matter who did what before that.

    Set those DVR’s and get out and appreciate the variety available to us in the US.

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