F1 teams rocked by huge loss in prize money

At a time when a lot of talk in Formula One is about cost cutting, there has been some rather unwelcome news for the teams.

Formula One teams are keen to see costs fall, the money spent on developing engines and the constant strive to find a tenth of a second here and there in aerodynamic design has meant that Formula One is just not cost affective for any team.

So the news that the prize fund from Formula One’s new owners Liberty Media comes as somewhat of a blow to teams.

Formula 1 chairman Chase Carey insists that the fall in commercial rights income is down to the new American owners investing in promoting the sport and bringing Formula One closer to its fan base.

That brings some short term pain for some hopeful, longer term gain.

But $43 million drop [a fall of 13%] on the same comparative quarter last season, is a fair bit of short term pain.

‘I think the sport has been underserved by a continual short-term focus,’ said Carey as quoted by motorsport.com.

‘To grow things, well, to use an American phrase, there are no free lunches. We didn’t have an organisation that was able to properly develop, to build the sport.

‘We had no research, we had no marketing, we had no digital organisation and realistically if you don’t have capabilities like that, you are going to fall behind.

‘When you’re building a digital organisation, usually you have costs before you get returns. If you’re building research capabilities, normally you have to invest in those before you get to use them. It’s the reality of building capabilities that haven’t existed.