Austrian Grand Prix Starts Tomorrow: Here's How F1 Teams and Drivers Make Millions
Formula 1 is in Austria this weekend, the home of Red Bull Racing, for the Austrian Grand Prix. Practices started on Friday, and Sprints happen Saturday. The lights go green on Sunday at 9 a.m. EDT.
Formula 1 Racing is a billion-dollar organization, and you need money to get in and stay in the game. Red Bull's Max Verstappen will be in the spotlight after recording his third consecutive victory in his last race, putting him 70 points ahead of his teammate Sergio Perez. But to even enter the season, drivers pay pretty hefty fees totaling more than $1 million.That money adds up.
Formula 1 brought in a total of $2.57 billion in 2022, driven by record attendance and expanded global viewership, according to an earnings report from F1’s owner, Liberty Media (FWONK). In June 2022, F1 renewed their contract with ESPN through 2025, in a deal estimated to pay $75 to $90 million a year for U.S. media rights, according to the Sports Business Journal.
The sport could grow even more in popularity, with celebrity investors Ryan Reynolds, Rob McElhenney, and Michael B. Jordan putting their money into F1 team Alpine in a $218 million deal announced in June 2023.
So how do F1 teams make money? Essentially, teams are funded based on how well they score per season. However, since teams with bigger budgets have tended to perform better and shut out teams that had smaller budgets, F1 implemented budget caps in 2021 to level the playing field and limit team spending.
The spending cap was $145 million when the rule was first announced in 2021, and is set for $135 million in 2023.Historically, the teams with the biggest budgets havebeen Ferrari, Mercedes, and Red Bull. The 2023 F1 teams competing are Alfa Romeo, Alpine, AlphaTauri, Aston
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