| The funding of Formula 1 is a mystery | | | | being a premier world race track. |
| for many fans and even those inside the | | | | Formula One is the name of the business |
| sport's inner circles have trouble | | | | behind the sport of Formula 1; it is |
| understanding the complexities. What is | | | | these businessmen and financiers that |
| generally known is that funding for | | | | control how each race is funded and |
| Formula 1 consists of huge sponsorship, | | | | which sponsors are given preferential |
| television coverage and merchandise | | | | treatment. They also decide how much to |
| sales. The merchandise sales are | | | | 'top up' F1 teams' merchandise and |
| somewhat of an afterthought for sponsors | | | | sponsorship profits; although this is |
| but as the popularity of Formula 1 is | | | | kept a secret and can sometimes cause |
| growing the merchandise market is also | | | | friction between teams. |
| on the increase. | | | | The teams in recent years have not been |
| Formula 1 is like many other sports in | | | | making enough money from merchandise and |
| respect to television coverage. | | | | sponsorship sales and are beginning to |
| Advertisers will pay for slots in the TV | | | | barter for more money from Formula One. |
| coverage and may even sponsor a specific | | | | Their argument is that they are the |
| channel's coverage of an event. This | | | | entertainers in the sport and so should |
| lucrative method brings vast amounts of | | | | get a bigger slice of the cake, whether |
| funding to the organising body of | | | | this will be successful is doubtable. |
| Formula 1, the FIA as well as its | | | | The drivers are not paid from Formula |
| funding company, Formula One. This is | | | | One funds but are employees of the |
| important as Formula One is in the | | | | racing teams. The astronomical sums that |
| driving seat of presenting the Formula 1 | | | | many of them receive are |
| package to the public, hence it needs | | | | incomprehensible to those on an average |
| immense funding to carry out these | | | | wage, they are however the best drivers |
| roles. | | | | in the world and have worked hard to get |
| The Formula 1 teams support themselves | | | | where they are. The popular drivers such |
| in a number of ways; the bigger teams | | | | as Lewis Hamilton and Fernando Alonso |
| will be able to court sponsors from some | | | | can also sign separate merchandising |
| of the biggest names in business, | | | | deals, usually for such luxury items as |
| whereas smaller teams must make do with | | | | watches and jewellery. |
| lower profiles patrons. Teams also | | | | The Formula 1 gravy train is driven by |
| produce their own merchandise ranges to | | | | the big business that is Formula One, |
| cater for the needs of the average fans; | | | | while Bernie Ecclestone holds a small |
| once again the more popular teams | | | | part of the power in Formula 1; the big |
| obviously make more money. | | | | businesses that put up a lot of the |
| Venues in the Formula 1 calendar are | | | | funding ultimately demand respect. The |
| somewhat limited with their advertising | | | | bankers of the Formula One Company |
| freedom. As Formula 1 is ran by a small | | | | balance payment and income to keep |
| number of big business share holders the | | | | Formula 1 at the pinnacle of motor |
| venue bosses are pushed out of the | | | | racing entertainment. |
| commercial decisions. Most venues do not | | | | Seemingly the biggest losers in the |
| have the rights to place their own | | | | Formula 1 world are the venues, as |
| signage and must pay to host the race. | | | | ticket sales are most probably the |
| The majority of money made by venues is | | | | smallest income when compared with the |
| in the ticket and merchandise sales once | | | | huge TV sponsorship and merchandise |
| fans are inside the track. | | | | deals. In what is seen as an exclusive |
| This explains why Formula 1 tickets can | | | | sport for the rich, the average fan can |
| be very expensive, mainly due to venue | | | | only afford his team's merchandise. With |
| managers trying to recoup some of the 13 | | | | high ticket prices and the worldwide |
| million dollars they fork out annually | | | | nature of the sport it is hard for |
| to host a race. Hosting a Formula 1 race | | | | anyone but the super rich to follow this |
| however is more about the prestige of | | | | sport closely from the trackside. |