2003 Manufacturer Budgets - some facts and figures...

[Super Tourer]

2003 manufacturer team budgets. (figures from F1 Business)

Renault.
Total budget $257M
Renault input - $70M cash - $90M non cash
% of total budget funded by manufacturer -62%
Tobacco input - $40M – as a % of total budget – 15%

Jaguar
Total Budget $210M
Ford input - $85M non cash
Premier Auto Group (Jaguar) input - $40M cash
% of total budget funded by manufacturer – 60%
Tobacco input - None


BAR Honda
Total Budget $222M
Honda Input - $40M cash - $110M non cash
% of total budget funded by manufacturer -68%
Tobacco input - $48M – as a % of total budget – 22%


Toyota
Total Budget $287M
Toyota input $140M cash - $30M non-cash - $10M other support
% of total budget funded by manufacturer – 63%
Tobacco input - None


McLaren Mercedes
Total Budget $269M
Mercedes input - $40M cash - $105M non cash
% of total budget funded by manufacturer – 54%
Tobacco input - $50M – as a % of total budget – 19%


BMW Williams
Total budget $230M
BMW input - $30M cash - $90M non cash
% of total budget funded by manufacturer -52%
Tobacco input - None


Ferrari
Total budget -$303M
Ferrari input $65M cash
Fiat input $5M cash - $8M non cash
% of total budget funded by manufacturer -26%
Tobacco input - $86M – as a % of total budget – 28%


This paints a picture of the reliance factory teams have on the manufacturers, as all of them provide cash sponsorship on top of free engines/technical support, etc. Of the ‘factory’ teams, the top three are least dependent on manufacturer support, with Ferrari having the best mix of backing.

The budget figures also show how much of a gap teams would have to fill, should a tobacco ban ever come into force.

If we look at a non works team supported by tobacco the figures are as follows.

Jordan
Total budget $60M
Ford marketing support $7M
% of total budget funded by manufacturer -12%
Tobacco input - $20M – as a % of total budget – 33%

[Raglanparade]

What about Sauber and Minardi ?
its interesting to see the budgets of these teams.
I thought that BAR would have less support from Honda and more from Tobacco, they have one of the highest dependancys on the manufacturer.
Are you sure Jag has the same budjet as some of the others... From Webbers comments you would think that maybe they would have half the budget of renualt and the likes.

-jason

[Super Tourer]

Originally posted by jasonhill9884
What about Sauber and Minardi ?
its interesting to see the budgets of these teams.
I thought that BAR would have less support from Honda and more from Tobacco, they have one of the highest dependancys on the manufacturer.
Are you sure Jag has the same budjet as some of the others... From Webbers comments you would think that maybe they would have half the budget of renualt and the likes.

-jason

It may be that Jaguar have a smaller budget this year, and 'Ford' itself supplied non-cash, ie Cosworth engines - whereas the Jaguar brand, via PAG, contributed $40M, these seem to be their most 'vunerable' figures, but Cosworth will recoup $20M or thereabout from the engine supply to Minardi and Jordan. Anyway, these are the figs I have.

Sauber
Total budget $115M
Biggest contributors:
Petronas: $38M
Red Bull: $20.5M
Credit Suisse: $17M

No figures for Minardi, but at a guess their budget must be $30M - $40M

[DriverT]

My God, I didn't think Sauber were as poor as that. I am not surprised Minardi cannot compete.

[Super Tourer]

I believe Peter Sauber has spoken of a $100M budget for 2004. From these figures the disparity between the works and privateer teams is evident.

[ralf fan]

geez.. we are talking millions but compared to even the Sauber... Jordon are beggers

[Mackmot]

I saw in F1 Business last season that Minardi had a budget of only $23mil compared to 2002 they had $45mil.

[GP Racer]

The numbers are truly staggering when you think that the budgets quoted, are per season!

Is there anyway to figure out the approximate return they get on that investment? Those numbers must be truly ugly, and would probably make any sane person, wonder why they do it at all...

[GTRMagic]

Makes Jos Verstappen's Trust budget of US$16m look rather tasty for Jordan now doesnt it?

[Red]

Team	Cash	N/cash	Other	Total
Toyota	140	30	10	180
Renault	70	90		160
HONDA	40	110		150
Merc	40	105		145
Jaguar	40	85		125
BMW	30	90		120
Ferrari	65	5	8	78

Something does not compute here. What does "manufacturers cash/Non-cash" support mean? According to that list, Ferrari is the most underfunded team, and both BMW and Mercedes heavily outnumber them... Let alone the likes of Toyota or Renault...

[Super Tourer]

Originally posted by Red

Team	Cash	N/cash	Other	Total
Toyota	140	30	10	180
Renault	70	90		160
HONDA	40	110		150
Merc	40	105		145
BMW	30	90		120
Jaguar	85			85
Ferrari	65	5	8	78

Something does not compute here. What does "manufacturers cash/Non-cash" support mean? According to that list, Ferrari is the most underfunded team, and both BMW and Mercedes heavily outnumber them... Let alone the likes of Toyota or Renault...

The figures are showing the total budget, then the actual spend by the manufacturer as a %. This is to give a 'snapshot' of how reliant the 'factory' eg Williams, teams are on the car makers, I have done a similar calculation for tobacco input, bearing in mind the 2006 (ban or not).

In actual fact Ferrari has one of the strongest and broadest finacial bases, as it is barely reliant on it's own (Ferrari funds) or Fiat. This would figure, as being the top performing team for several years, they would command the highest sponsorship fees and biggest sponsors. Ferrari have Marlboro, Shell and Vodafone as major sponsors, contributing the majority of their budget.

In terms of cash/non cash - cash refers to a car maker ie Honda providing sponsorship (cash) as well as (non-cash) free engines/technical support, R&D, etc.

In those terms Williams has a strong base in that it is only 50% reliant on BMW on not dependent on tobacco funding either.

[Red]

Well, I was talking stricly of manufacturer's support. It still does not compute. Ferrari + Fiat have a grand total of 78 mil, while BMW for example, has a 120 million. Now, assuming that Ferrari does also build the chassis (in same Ferrari + Fiat cash), while BMW doesn't, one would guess that those numbers are somehow incomplete.

I would guess that the statistics are focused on tobacco money, mainly, but I don't think that this is really their budget.

PS: Those figures would also blow up another myth; the cash that Fiat pours into Ferrari. I could guess that 13 million is not the end of the world

[Adam43]

I think it shows that Ferrari's engines are also paid for by Vodafone, Shell and Malboro as well as the chassis.

Whereas BMW pay for Williams engine (because it is free), but Williams sponsors pay for the chassis.

[Red]

No, I don't think so. Ferrari does build the engines. Vodafone/Marlboro pay for other extra cash, who might get into engine department afterall (heck, actually ALL sponsorship money goes into some engine/chassis business, not babes/booze, one would expect), but Ferrari's + Fiat direct contribution is 78 million? Hmm. Nice investment/result ratio I reckon...

[Super Tourer]

It also shows, for example, that if the Toyota board (for example), wanted to cut their input by 50% to divert cash into new products/marketing or whatever, the team would be heavily comprimised, and their viability reduced.

Whereas, if Fiat wanted to cease all funding to Ferrari it would make very little difference to the team.

[Snrub]

Few things that are interesting:
1. Honda is critisized for not doing enough. They're clearly SPENDING enough.
2. Is it just me or has the budgets of the non-top 3 teams increased quiet dramatically in the last year or two?
3. The 'big 3' are there for reasons other than money.

[KC]

Something else interesting in the amounts being bandied about. Is the money being spent compensatory with the quality of the racing. No doubt the cars are awesome pieces of technology. The drivers can honestly be considered among the best in the world if not the outright best (some rally drivers have equal or better skill IMHO). If there is a single failing in F1, its not that it costs too much, its that it costs too much for the quality of the show. In the end, the racing is about entertaining the fans and advertising to those fans. If it was merely an engineering exercise then it would not be a sport as much as a technological exercise and competition. As a rolling billboard the cars are very weak, not having as much usable surface area to effectively advertise a product for the money spent.

For $20 million dollars a team could put a pair of top flite NEXTEL Cup cars on the track and get more than 5 times the advertising ad space in surface area and TV time. I cannot see how it makes much business sense for a company to sink so much capital into a racing effort that does not reap nearly as much return as other series do. NASCAR is the only series that is even remotely close to rivalling F1's TV audience. Would you, as a business-person with say $15 million to spend on racing advertising, give that money to Jordan and never be seen on TV unless being lapped or crashing/expiring out of the race or give that money to perennial midpack racer Kenny Schrader's team and be guaranteed plenty of TV time whether you crash/blow up/get lapped/or win the race?

I can't see how F1 offers as much advertising return, unless you are on the leader's car, especially when you can spent 10 times less to be the major sponsor of a high profile racing effort.

[Adam43]

Its all about markets I guess. Why sponsor NASCAR (even at the fraction of the cost) if your market isn't NA? I know it is difficult for some to believe, but F1 does reach the parts other series can't reach.

Additionally some sponsorship is more than just being seen on telly. Having an association with F1, being able to wine and dine at international events and also a technological input are all important to some companies.

Although to be fair for the tobacco companies, the soft drinks companies and the like it can just be exposure. F1 is on TV a lot, not just in the races. As a small example, there was a feature on Toyota during the last GP. I saw the Panasonic brand a lot and Toyota achieved little in the GP! A bit of thought like that gives more world wide exposure than an entire race of another series - even if the team is winning.

It isn't about us who watch other series and take an interest in most motorsport.

Even nowadays F1 hits the right numbers and the right locations for the big companies. Maybe if other series has a comparable fan base it would drive down costs in F1 because there would be competition for advertising. That would be nice! So in a odd way the problem of too much money in F1 (which can be argued causes a problem with the racing) is the fault of there being no comparable series for sponsors to be involved in (tongue in cheek that last remark).

[Super Tourer]

A couple of points.

At the back of the grid, entry to the F1 sponsors club is peanuts. It's rumoured that the Wilux deal on the Minardi is allegedly worth a few hundred thousand dollars, and a similar tiny amount for the Trust Jordan deal.

For this investment 'relatively' small companies get to share the F1 paddock and grid with the big corporations, get to entertain their clients at the Grand Prix, etc, etc - you know the sort of thing. At that level I don't think TV exposure is a factor, and to be honest the TV airtime that Trust or Wilux (for example) could buy for what they spend on F1 wouldn't last more than a few slots.

On the flip side, the relative performance of the those teams means that companies are not queueing up to spend £15M on them, hence they are trapped in the vicious circle that says no performance equals no budget/no budget equals no performance. As with many other things in life this means the lesser teams get even worse value for money. As I pointed out in another budget thread, Jordan's 2 points scored thus far have cost them $38M each, Minardi have done worse still, spending $50M for no points, contrast that with Ferrari, who's 100 odd points have ONLY cost them $3M each.

As another example, take the recent Monaco GP. To most race fans, Jaguar's on track performance was yet another entry in the catalogue of errors that has come to mean Jaguar's F1 effort. Yet I'm sure the marketing suits will have been drooling at the column inches the 'diamondgate' farce generated for them over the weekend.

As Adam said, it's a pity that Jaguar Racing don't seek to get good publicity by on track performance, which is surely the point of racing in F1. Or have we missed something...

[KC]

Goot points AdamAshmore and Super Tourer.

[Adam43]

Without this being a mutual appreciation society, yours too.

If it was my cash, I don't think I'd put it into F1! But then I guess this is the point, it isn't my cash or indeed any persons cash to throw away - it is companies who want return of some form that is independent of racing. The days of Hesketh and Walker are gone. Although only in F1. You can still have (successful) teams like that elsewhere.

Jaguar racing? An ironic name really - While I don't doubt that one of Jaguar's main reasons to go racing has always been to sell cars, racing used to be higher on the priority list. That is a shame.

OK so I've mixed up the role of sponsor and team in the above. And it a little off topic.

Its horses for courses. In terms of targeting the audience and if your market coincides with the fan base then smaller (regional, specific, whatever) series are what you are looking for. Take BTCC, Halfords sponsorship there is ideal, they hit the market place ideally (British, family cars generally and also a sporty boy racer types too). A tiny sticker (or maybe not so tiny with ST's figures) on a Minardi would be pointless even if they got a nice view at the GP.

[RWC]

These figues look very suspiciously TOO sensible,LOL!
Notice how in the past it's very often that utterly REDICULOUS figures have been bandied about ?Stupid,stupid stupid are f1 journalists
I wonder how reliable these ones are?At least they LOOK not too bad

Interesting how BAR (tobacco)input very little

[tblincoe]

with a budget like that, jaguar needs to quit *****ing about a lack of funds... their budget is right up there with the rest of the teams