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