PER 2015
the circuit and still receive this payment that the struggling teams would only dream of. The reason they receive this payment is because of the fans, culture and tradition that Ferrari bring to F1. An F1 season would not be complete without a bright red Ferrari lining up on the grid. So, perhaps this fee is deserved as Ferrari brings Italian flair and excitement to the sport. Looking at this breakdown of payments, you would be correct in assuming that the more successful the team is, the more money they make. However, this is not the case. In 2014, Ferrari finished in 4 th , below Mercedes, Red Bull and Williams in the Constructors’ Championship. However, they received a bigger pay out from the FOG than both Williams and Red Bull. Unfair many would claim and justifiably, why should a team, which runs a worse car, earn more? The answer being, that it is the nature of F1 and how the money thrown about in inequitable quantities. The second stream of revenue in F1 is generated in sponsorships. F1 cars, race suits and circuits are now adorned from head to foot in advertising. For years Marlboro was virtually synonymous with Ferrari. Red Bull, the most successful team of the last five years is named as it is for the sake of advertising. Sponsorship of an F1 team works in the same way as any form of advertising; sponsoring another sports team or a commercial on TV. The motive behind sponsoring an F1 team is brand awareness. However, as was the case with prize money, sponsorship income is heavily bias towards the teams at the top. The reason being very simple that a business would not want to sponsor a non-competitive team which gets little to no TV coverage. Sponsoring a team like Manor would be bad business. Why compete? So, why do teams enter F1 in the first place, a highly risky business that bleeds companies of resources, forcing them into debt and administration? First, you have to look at what teams there are in F1. You have four teams which manufacture road cars: Mercedes, Ferrari, Lotus and McLaren. There is four teams who are teams privately owned devoted to racing: Force India, Manor, Sauber and Williams and two teams owned by energy drinks company Red Bull. Initially, I will look at those four teams who manufacture cars for consumers to find out their motives for entering the sport. It is important to note that Ferrari, McLaren and Lotus all started out as racing teams. It is only once they found success in a racing capacity did they enter the world of commercial production. This is very important to their business model. Ferrari does not make family-friendly, practical town cars. Rather, they make fast, red, sexy sports cars appealing to the rich, adrenaline seeker. This plays right into the image of F1 cars. F1 is the pinnacle of motor sport engineering, developing the fastest racing vehicles, pushing physics to the maximum. So, when buying your Ferrari what comes to mind is a glistening, red, Formula One car driven at break neck speeds by Michael Schumacher or Fernando Alonso. This plays right in to the hands of those trying to sell Ferrari’s sports cars. Ferrari have a huge pedigree in formula one and this image of glamour helps them sell cars. A similar scenario is the case for McLaren. McLaren use their knowledge and expertise arisen from decades at the top of motor sport to develop some of the fastest and most expensive cars available to the public. McLaren is essentially an F1 team who make £1m cars on the side.
56
Made with FlippingBook flipbook maker