May 22, 2013, 12:30 PM EDT
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.
Top F1 team: $470 million; Top IndyCar team: $15 million
This includes the following key areas of spending:
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.
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.
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.
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.
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.
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.
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.
Top F1 team: $136.7 million; Top IndyCar team: $3.5 million
*Includes salaries, travel and factory costs.
Jul 27, 2014, 7:52 PM EDT
A world of differences make it impossible to weigh Jeff Gordon’s accomplishments at Indy against those of A.J. Foyt, Rick Mears, Al Unser Sr., and Michael Schumacher.
Jul 27, 2014, 6:52 PM EDT
INDIANAPOLIS – Jeff Gordon gave himself an early 43rd birthday present with Sunday’s Brickyard 400 win. Kyle Larson also gave himself an early birthday present – his 22nd will be Thursday – with a solid seventh-place finish in his first Brickyard.
Jul 27, 2014, 6:13 PM EDT
INDIANAPOLIS – It wasn’t quite the 1-2-3 finish they might have hoped for, but it was almost just as good for Joe Gibbs Racing’s three drivers in Sunday’s Brickyard 400 at Indianapolis Motor Speedway. Kyle Busch finished second to winner Jeff Gordon, followed by Denny Hamlin in third and Matt Kenseth was fourth.
Jul 27, 2014, 5:41 PM EDT
Rowdy continues his strong performance as of late with another P2 at Indianapolis.
Jul 27, 2014, 4:45 PM EDT
Kasey Kahne led a race-high 70 laps, but lost the Brickyard 400 lead to Jeff Gordon on a restart with 16 laps to go and faded to sixth.
Jul 27, 2014, 4:17 PM EDT
INDIANAPOLIS – It was an oldie but goodie performance as Jeff Gordon – seven days short of his 43rd birthday – rallied late to win Sunday’s 21st Brickyard 400 at Indianapolis Motor Speedway.
Jul 27, 2014, 3:00 PM EDT
One final round-up from the Hungaroring following Daniel Ricciardo’s supreme victory.
Jul 27, 2014, 2:53 PM EDT
A broken rear axle ended Danica Patrick’s day prematurely in Sunday’s Brickyard 400 at Indianapolis Motor Speedway.
Jul 27, 2014, 2:43 PM EDT
Strategy plays have been plentiful in the first half of today’s race at Indianapolis.
Jul 27, 2014, 2:00 PM EDT
Defending world champion has a quiet race at the Hungaroring; now 43 points behind Ricciardo in the drivers’ championship.
Jul 27, 2014, 1:15 PM EDT
Briton was asked twice to let Rosberg past, but he defied team orders on both occasions.
Jul 27, 2014, 1:03 PM EDT
“I have a deal moving forward. I can’t announce it yet. When all those pieces come together, it’ll be announced and we’ll talk about it.” – Edwards
Jul 27, 2014, 12:30 PM EDT
Big crashes for both Perez and Ericsson, but luckily neither suffered any injuries.
Jul 27, 2014, 12:00 PM EDT
Best result of the season for Ferrari with Alonso second and Kimi Raikkonen P6.
Jul 27, 2014, 11:55 AM EDT
By making announcement hours before Brickyard 400, team owner Jack Roush didn’t seem to do Edwards any favors.
Jul 27, 2014, 11:30 AM EDT
Championship lead shrinks by three points after finishing half a second behind Hamilton at the flag.
Jul 27, 2014, 11:00 AM EDT
Cuts the gap to Nico Rosberg by three points, leaving the gap at just eleven for the summer break.
Jul 27, 2014, 10:45 AM EDT
Red Bull driver won a sensational grand prix ahead of Fernando Alonso and Lewis Hamilton.
Jul 27, 2014, 10:33 AM EDT
Roush Fenway Racing announces that its 2015 Sprint Cup driver lineup will feature Greg Biffle, Ricky Stenhouse Jr., and Trevor Bayne.
Jul 27, 2014, 9:59 AM EDT
Australian driver claims a sensational win for Red Bull, the second of his F1 career.