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Formula One Funding; Merchandise, Sponsorship And Big Business

The funding of Formula 1 is a mysterybeing a premier world race track.
for many fans and even those inside theFormula One is the name of the business
sport's inner circles have troublebehind the sport of Formula 1; it is
understanding the complexities. What isthese businessmen and financiers that
generally known is that funding forcontrol how each race is funded and
Formula 1 consists of huge sponsorship,which sponsors are given preferential
television coverage and merchandisetreatment. They also decide how much to
sales. The merchandise sales are'top up' F1 teams' merchandise and
somewhat of an afterthought for sponsorssponsorship profits; although this is
but as the popularity of Formula 1 iskept a secret and can sometimes cause
growing the merchandise market is alsofriction between teams.
on the increase.The teams in recent years have not been
Formula 1 is like many other sports inmaking enough money from merchandise and
respect to television coverage.sponsorship sales and are beginning to
Advertisers will pay for slots in the TVbarter for more money from Formula One.
coverage and may even sponsor a specificTheir argument is that they are the
channel's coverage of an event. Thisentertainers in the sport and so should
lucrative method brings vast amounts ofget a bigger slice of the cake, whether
funding to the organising body ofthis will be successful is doubtable.
Formula 1, the FIA as well as itsThe drivers are not paid from Formula
funding company, Formula One. This isOne funds but are employees of the
important as Formula One is in theracing teams. The astronomical sums that
driving seat of presenting the Formula 1many of them receive are
package to the public, hence it needsincomprehensible to those on an average
immense funding to carry out thesewage, they are however the best drivers
roles.in the world and have worked hard to get
The Formula 1 teams support themselveswhere they are. The popular drivers such
in a number of ways; the bigger teamsas Lewis Hamilton and Fernando Alonso
will be able to court sponsors from somecan also sign separate merchandising
of the biggest names in business,deals, usually for such luxury items as
whereas smaller teams must make do withwatches and jewellery.
lower profiles patrons. Teams alsoThe Formula 1 gravy train is driven by
produce their own merchandise ranges tothe 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 teamspart 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 arefunding ultimately demand respect. The
somewhat limited with their advertisingbankers of the Formula One Company
freedom. As Formula 1 is ran by a smallbalance payment and income to keep
number of big business share holders theFormula 1 at the pinnacle of motor
venue bosses are pushed out of theracing entertainment.
commercial decisions. Most venues do notSeemingly the biggest losers in the
have the rights to place their ownFormula 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 issmallest income when compared with the
in the ticket and merchandise sales oncehuge TV sponsorship and merchandise
fans are inside the track.deals. In what is seen as an exclusive
This explains why Formula 1 tickets cansport for the rich, the average fan can
be very expensive, mainly due to venueonly afford his team's merchandise. With
managers trying to recoup some of the 13high ticket prices and the worldwide
million dollars they fork out annuallynature of the sport it is hard for
to host a race. Hosting a Formula 1 raceanyone but the super rich to follow this
however is more about the prestige ofsport closely from the trackside.



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