2023 f1

[Buster]

This quote is hidden because you are ignoring this member. Show Quote

The racing, and the physicality of it contributes to the story, and thus the product. You can not get anywhere close to the physicality of F1 with EVs. Without the physicality of it, you’d end up with nascar.

I’d even argue that nascar has better drama than f1.

You also can't have a racing series without capital - and you can't have capital without sales justifying it. The manufacturers have to be able to draw a direct line from the R+D benefit and the exposure benefit they do in the series and the cash flow they generate from the public. I think this is where the shift will be forced.

[davidI]

This quote is hidden because you are ignoring this member. Show Quote

Formula 1? Oh wait, sorry, I was thinking of the Kentucky Derby.

The Greatest 2 minutes in Sports

[Buster]

This quote is hidden because you are ignoring this member. Show Quote

To play Devil's Advocate...



Rules can change to limit engine development and R&D dollars can flow into Energy Recovery System and Aero which will remain relevant for EVs.



That's been the case for a long time already. They make rules changes to slow the cars down. Moving to smaller engines and cars would be great if the material tech can advance enough to keep them safe...





F1 has always had its ebbs and flows in popularity. Even if only 10-20% of the current new "DTS" fan base stick around, it's still a much larger fan base than existed 5 years ago.

I haven't looked into the actual biz model of F1 overly closely. However, I would assume they get revenue from three main sources: manufacturers pumping in capital, broadcast rights/advertising of "other" products and then ticket sales.

I further assume that the manufacturers pumping in capital is a major contributor. If those contributions shrink by 50% or 75% because ICE is the past, then the series will change dramatically. I think the manufacturers are going to want to spend the marketing resources on promoting whatever generic EV tech they will be promoting. I can see an F1 Cadillac Lyriq team or whatever.

[rage2]

This quote is hidden because you are ignoring this member. Show Quote

You also can't have a racing series without capital - and you can't have capital without sales justifying it. The manufacturers have to be able to draw a direct line from the R+D benefit and the exposure benefit they do in the series and the cash flow they generate from the public. I think this is where the shift will be forced.

Clearly you don't get marketing haha. It's' been like this forever. Don't forget that during they 2000's that the investment was 10x higher than it is today. It's "cheap" marketing today in comparison. Marketing will never be able to directly justify it's expense.

This quote is hidden because you are ignoring this member. Show Quote

I haven't looked into the actual biz model of F1 overly closely. However, I would assume they get revenue from three main sources: manufacturers pumping in capital, broadcast rights/advertising of "other" products and then ticket sales.

I further assume that the manufacturers pumping in capital is a major contributor. If those contributions shrink by 50% or 75% because ICE is the past, then the series will change dramatically. I think the manufacturers are going to want to spend the marketing resources on promoting whatever generic EV tech they will be promoting. I can see an F1 Cadillac Lyriq team or whatever.

The revenue comes from track fees and TV rights primarily. There's some "f1 sponsorship" money there such as AWS and Salesforce being a sponsor of the series as well but pales in comparison to the TV rights. There's no costs to the TV rights thanks to the 99 year lease manufactured by Bernie and Max Mosley back in the day. Something like $1m a year. It's a license to print money.

Manufactures don't contribute to F1, they contribute to the competing teams for marketing space. It's up to the teams to make money. Their problem.

Ticket sales are for the tracks. F1 gets paid regardless in track fees. Profitability is the track and organizer's problem not F1's. This is often subsidized by the host country. Quebec and subsequently our tax dollars paid for a lot of it because Canadian GP wasn't profitable. Bell took it over last year, and Quebec still funds a lot of it.

Manufacturers are a separate item in the budget cap, and treated separately. Mercedes HPP makes money. They invest in R&D and sell powertrains to other teams. It's literally free marketing. Actually better than free, they get paid to market their name.

All that profit from F1/Liberty Media gets split to the teams based on winnings/points in WCC as well as tenure in F1. This is covered in the Concorde agreement with the teams.

FIA I think is non profit? They get the $1m a year fee from F1, and gets money from drivers paying license fees and other other license fees.

High level of how finances work in F1. It all starts at the fact that F1 pays next to nothing for the rights.

[Buster]

This quote is hidden because you are ignoring this member. Show Quote

Manufactures don't contribute to F1, they contribute to the competing teams for marketing space. It's up to the teams to make money. Their problem..

What proportion of a team's budget is generated by the manufacturer's injection of cash?

[rage2]

This quote is hidden because you are ignoring this member. Show Quote

What proportion of a team's budget is generated by the manufacturer's injection of cash?

$0 for most teams. They have to pay for their powertrains, with pricing dictated in the rules.

For the works team, it's kept separate in the budget cap. I think the exception is Aston Martin and Alfa Romeo. They weren't manufacturers, just sponsors. Honda I also think might've been a sponsor after they quit.

What you're looking for is who's the primary sponsor on the team. That's where the largest chunk of money comes from. It's not manufacturers except for AM and AR. IIRC the split in revenue for top F1 team is 1/3 sponsorship, 1/3 pay drivers/manufacturer budget (ie Mercedes, Ferrari), and 1/3 prize money.

For those top teams, again, it's not a drive to win (although it's nice) to sell cars. It's purely a marketing brand exercise. Ferrari hasn't won shit forever, Mercedes killing it last decade, but sales wise Ferrari is growing while Mercedes has already peaked. End of the day, there's brand value in that they're in the top echelon of racing technology. That's the marketing value.

edit - clarification - AM when they were sponsoring RBR. They're a owner now with Stroll.

[Buster]

This quote is hidden because you are ignoring this member. Show Quote

$0 for most teams. They have to pay for their powertrains, with pricing dictated in the rules.

For the works team, it's kept separate in the budget cap. I think the exception is Aston Martin and Alfa Romeo. They weren't manufacturers, just sponsors. Honda I also think might've been a sponsor after they quit.

What you're looking for is who's the primary sponsor on the team. That's where the largest chunk of money comes from. It's not manufacturers except for AM and AR. IIRC the split in revenue for top F1 team is 1/3 sponsorship, 1/3 pay drivers/manufacturer budget (ie Mercedes, Ferrari), and 1/3 prize money.

Wait, the car manufacturers literally have $0 on their expense lines anywhere that goes to their F1 activities?

Renault, Mercedes, McLaren, Aston and Ferrari (and I guess Honda) have no expenses related to F1?

[rage2]

This quote is hidden because you are ignoring this member. Show Quote

Wait, the car manufacturers literally have $0 on their expense lines anywhere that goes to F1?

Renault, Mercedes, McLaren, Aston and Ferrari (and I guess Honda) have no expenses related to F1?

You have to look at it from a team perspective, and a powertrain perspective (for works teams). They're 2 separate business units.

Mercedes for example. The power train side has expenses, but is a profitable business from sales of powertrain. That's a separate business on its own. The F1 team itself there's a small marketing contribution by the team, covering things outside of the budget cap (drivers salaries, etc.). That also is a profitable business in itself from the sponsorship and prize money revenue.

Mclaren, buying powertrains from Mercedes, doesn't contribute anything. It's a profitable business on its own driven from sponsorship and prize money, including driver salaries. It's their automotive division that's underwater.

[Buster]

This quote is hidden because you are ignoring this member. Show Quote

You have to look at it from a team perspective, and a powertrain perspective (for works teams). They're 2 separate business units.

Mercedes for example. The power train side has expenses, but is a profitable business from sales of powertrain. That's a separate business on its own. The F1 team itself there's a small marketing contribution by the team, covering things outside of the budget cap (drivers salaries, etc.). That also is a profitable business in itself from the sponsorship and prize money revenue.

Mclaren, buying powertrains from Mercedes, doesn't contribute anything. It's a profitable business on its own driven from sponsorship and prize money, including driver salaries.

Pretend I'm a shareholder of Mercedes, and I ask my analyst how much of my money as a shareholder we are spending on F1 per year. As Mercedes, Daimler whateve the fuck they are called. Forget revenue, forget profit. What am I spending.

What is that number? Cuz it sure as shit ain't zero.

[npham]

They just pay money for their logo to be on their car, and that's it. They don't pay specific amounts to engine R&D or IT costs to support the F1 Teams. Teams spend the sponsorship money as they see fit. It's like paying for product placement in a Superbowl ad - it's all covered by marketing spend unless there's some sort of technical partnership (Honda/RBR).

[rage2]

This quote is hidden because you are ignoring this member. Show Quote

Pretend I'm a shareholder of Mercedes, and I ask my analyst how much of my money as a shareholder we are spending on F1 per year. As Mercedes, Daimler whateve the fuck they are called. Forget revenue, forget profit. What am I spending.

What is that number? Cuz it sure as shit ain't zero.

quick google has HPP at 136.78m GBP and Mercedes F1 team at 300m GBP. Revenue was the same for HPP (break even), and 383.3m GBP. Basically got paid 83m GBP to market Mercedes in F1.

Anyways, you have to treat an F1 team not as an automotive company, but a marketing company. That's literally what it is.

[Inzane]

This quote is hidden because you are ignoring this member. Show Quote

Which one's Lewis? Is LEC short for Lewis?

I thought Lewis was British but this sign says the British guy is Russian.
Does Lada sponsor a team now?!

Too confusing. Going to bed.

Not sure if serious...

LEC is Leclerc. And you obviously haven't watched enough of Sheldon's Fun with Flags... that's Monaco, not Russia.

[LilDrunkenSmurf]

This quote is hidden because you are ignoring this member. Show Quote

Not sure if serious...

LEC is Leclerc. And you obviously haven't watched enough of Sheldon's Fun with Flags... that's Monaco, not Russia.

100% satire

[Buster]

This quote is hidden because you are ignoring this member. Show Quote

quick google has HPP at 136.78m GBP and Mercedes F1 team at 300m GBP. Revenue was the same for HPP (break even), and 383.3m GBP. Basically got paid 83m GBP to market Mercedes in F1.

Anyways, you have to treat an F1 team not as an automotive company, but a marketing company. That's literally what it is.

It could make lollipops for all I care. My point is the same - if there is no end consumer willing to give money to the sponsors they are going to cease to provide the capital (engineering or just advertising) to continue.

That is going to occur. Manufacturers are not going to be willing to allocate direct marketing dollars or indirect marketing dollars (R+D) if the real source of cash (the automotive consumer) is just being fed EV.

[rage2]

This quote is hidden because you are ignoring this member. Show Quote

It could make lollipops for all I care. My point is the same - if there is no end consumer willing to give money to the sponsors they are going to cease to provide the capital (engineering or just advertising) to continue.

That is going to occur. Manufacturers are not going to be willing to allocate direct marketing dollars or indirect marketing dollars (R+D) if the real source of cash (the automotive consumer) is just being fed EV.

No shit. If sponsorship dries up, F1 will cease to exist lol. Who would've thought?

But this has been an issue since forever. That's why they have budget caps. Even before the rules cost controls were in place to ensure teams can thrive off sponsorship. They don't want a repeat of the late 2000's when everyone pulled out due to recession relying on manufacture money. We worried about tobacco leaving killing the sport, there will always be enough people to throw money at marketing and F1 is a perfect global vehicle for it. F1 doesn't care if the marketing makes money. That's a marketing problem. F1 is just the vehicle for it. The sport is built around profitability with a reasonable amount of marketing sell per team, and companies are lining up still.

If engine manufacturers are not profiting from building F1 powertrains, they'll leave. That's why the rules are in place to ensure they thrive within the sport. Why do you think 2026 is getting rid of MGH-H? The development and optimization of the MGU-H has accounted for nearly 30% of powertrain R&D. It was a stipulation for new manufacturers to join. They're making sure that whomever is in it, will make money on it and benefit from free marketing. The only thing good that came out of MGU-H is that it tricked down into road cars. AMG One first and 63's second. But that's besides the point.

I've been following the sport and finances forever. F1 is in a very good place right now compared to the "unlimited budget insane tech" era. I've lived through multiple F1 is about to die years, and we're at the most stable years of the sport right now. As an old timer, I do miss the excess. Investing tens or hundreds of millions to come up with new alloys to get an extra 5hp. That shit was wild.

[Buster]

Despite all of that, F1's challenge is going to be too transition to EV sooner than we all think, or the sponsors will leave.... Or more likely just not enter.

Investment is today's F1 is basically equivalent to investment in ICE technology... Which no one is doing.

Back to my original point...F1 as well know it is pretty much done.

[rage2]

This quote is hidden because you are ignoring this member. Show Quote

Despite all of that, F1's challenge is going to be too transition to EV sooner than we all think, or the sponsors will leave.... Or more likely just not enter.

Investment is today's F1 is basically equivalent to investment in ICE technology... Which no one is doing.

Back to my original point...F1 as well know it is pretty much done.

In true beyond style, let's bring it back full circle.

https://forums.beyond.ca/threads/417...42#post5106342

[Buster]

This quote is hidden because you are ignoring this member. Show Quote

In true beyond style, let's bring it back full circle.

https://forums.beyond.ca/threads/417...42#post5106342

I thought that post was making my point for me nicely...

Anyway. The three things that make F1 unique are a milieu of personalities/drama, the racing, and the bleeding edge engineering.

The first two can continue. The last one is going to look entirely different without the need for an arms race in drivetrain engineering.

[rage2]

This quote is hidden because you are ignoring this member. Show Quote

I thought that post was making my point for me nicely...

Anyway. The three things that make F1 unique are a milieu of personalities/drama, the racing, and the bleeding edge engineering.

The first two can continue. The last one is going to look entirely different without the need for an arms race in drivetrain engineering.

Drivetrain is such a small part of it. Again, the racing will suffer because electrical storage is nowhere near as portable as gasoline. They're finding the balance with these hybrid setups, tripling the electric power in 2026. F1 used to promote their whole carbon zero shit but nobody cares other than woke activists, so nobody even talks about it. Nobody even knows F1 is going towards 100% bio fuels for 2026. Nobody cares, it's to shut up the activists.

The technological arms race has always been on aero. That's where all the spend is, that's where it's capped hard based on championship position, etc.

You're putting way too much importance over drivetrain. They're even thinking of making more parts standard to lower drive train spend completely to nothing. Hell if fans had their way, we'd be back to V10s and V12s. But F1 is still successful using these fan hated hybrid drivetrains. F1 does not follow automotive trends at all.

[Buster]

This quote is hidden because you are ignoring this member. Show Quote

Drivetrain is such a small part of it. Again, the racing will suffer because electrical storage is nowhere near as portable as gasoline. They're finding the balance with these hybrid setups, tripling the electric power in 2026. F1 used to promote their whole carbon zero shit but nobody cares other than woke activists, so nobody even talks about it. Nobody even knows F1 is going towards 100% bio fuels for 2026. Nobody cares, it's to shut up the activists.

The technological arms race has always been on aero. That's where all the spend is, that's where it's capped hard based on position, etc.

You're putting way too much importance over drivetrain. They're even thinking of making more parts standard to lower drive train spend completely to nothing. Hell if fans had their way, we'd be back to V10s and V12s.

I dont think the problem will actually be technical, I think it will be manufacturers seeing racing EVs as a far less compelling statement about their technical advantages. EVs are flattening the landscape of consumer vehicles in terms of performance. Nobody gives a fuck how fast your lambo or ferrari is anymore when youtube content creators are dragracing them with shitty Teslas (and losing). That flattening will translate into manufacturers seeing racing as a limited way to differentiate their product in terms of overall brand perception.

Again, this isn't necessarily a problem if F1 can lean into the drama/reality TV aspect of the thing. But, as you say, then it will be just an effete version of NASCAR. Which is where it is going to end up.