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.
Oct 24, 2014, 7:26 AM EDT
Finnbarr O’Connell is now in charge at Leafield as the team prepares for a race against time to make the United States GP in Austin next weekend.
Remembering the Hendrick Motorsports airplane tragedy: 10 years later, it still seems like just yesterday
Oct 23, 2014, 11:02 PM EDT
This is a column that should never have been written, about an event that never should have happened.
Oct 23, 2014, 8:24 PM EDT
Legendary motorsports team owner and innovator — and Kentucky native — Jack Roush will be inducted this Saturday into the Kentucky Motorsports Hall of Fame. Roush was born in Covington, Ky.
Oct 23, 2014, 7:55 PM EDT
On Thursday’s edition of NASCAR America, Kyle Petty joined Dave Briggs to mark the 10-year anniversary of the Hendrick Motorsports plane crash and how the team recovered from it.
Talladega mystery: Did missing woman even make it to NASCAR race? Second fan to disappear in 18 months
Oct 23, 2014, 7:37 PM EDT
For the second time in 18 months, police in the area of Talladega Superspeedway are investigating the disappearance of a race fan who had intended to go to the Sprint Cup race at the 2.66-mile racetrack.
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Oct 23, 2014, 7:02 PM EDT
Enrique Contreras III, nephew of veteran Mexican racer Carlos Contreras, will make his NASCAR debut in Saturday’s Camping World Truck Race at Martinsville Speedway.
Oct 23, 2014, 4:30 PM EDT
GTSport Racing returns with Jack Baldwin and Buz McCall.
Oct 23, 2014, 3:37 PM EDT
Martinsville preview on tap in Thursday’s NASCAR AMERICA.
Oct 23, 2014, 1:30 PM EDT
Marsh, Cameron on the move to Action Express.
Oct 23, 2014, 1:12 PM EDT
Fernandes claims he didn’t receive full payment for Caterham, the new owners claim they haven’t received their shares, Bernie Ecclestone says he is trying to remedy the situation – but all the while, workers are locked out of the factory, putting the team’s hopes of making Austin in doubt.
Oct 23, 2014, 12:00 PM EDT
Brendan Gaughan back for another year with RCR in XFINITY.
Oct 23, 2014, 11:00 AM EDT
Sergio Perez, Felipe Massa and Esteban Gutierrez signed up for COTA fan forum.
Oct 23, 2014, 9:56 AM EDT
Wurth renews for multiyear deal.
Oct 22, 2014, 11:35 PM EDT
Brad Keselowski is flattered people might compare him with the late Dale Earnhardt, but he’ll be the first to say he’s not the new Intimidator in NASCAR.
Oct 22, 2014, 8:18 PM EDT
Perhaps the greatest collection of original Indianapolis 500 pace cars will soon be on display at an upcoming car show in suburban Chicago.
Oct 22, 2014, 7:36 PM EDT
For most Canadians, their homebrewed beer choice is typically Labatts or Molson. But countryman and IndyCar driver James Hinchcliffe is starting to get some traction with his own beer brand, Hinchtown Hammer Down (HHD).
Oct 22, 2014, 6:43 PM EDT
On Wednesday’s edition of NASCAR America, Parker Kligerman took a spin around Martinsville Speedway in the NBC race simulator to show why the paper-clip shaped track can be extremely difficult.
Oct 22, 2014, 4:13 PM EDT
In a stunning move that could potentially threaten his bid for a record-extending 17th NHRA Funny Car championship, John Force announced Wednesday that veteran crew chief Jimmy Prock has resigned, effective immediately.
Oct 22, 2014, 2:37 PM EDT
Crew chiefs, road crews for Nos. 10 and 41 Stewart-Haas Racing cars will swap starting at Texas.
Oct 22, 2014, 2:20 PM EDT
More murky messaging from Leafield as Caterham’s future hangs in the balance.
Video from NASCAR America
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- Caterham could miss Austin as crisis deepens at Leafield 2
- NHRA stunner: Jimmy Prock out as John Force’s crew chief 10
- Kurt Busch and Danica Patrick will swap crews at Stewart-Haas (UPDATED) 14