Tuesday, 27 May 2014

Formula One Teams Lost $500 Million In The Last Three Years


Formula One can't really be seen as a "typical" business driven by increasing revenues, decreasing expenses and maximising profits for their shareholders. Formula One, ever since the start of motor racing, has been far more to do with the dynamics between the driving skills of the driver and the engineering advancements of the cars all working towards their common goal of winning races, driver championships and constructors championships. Over the years we have seen Formula One being "driven" forward by the largest teams such as McLaren, Redbull, and Ferrari. These are the teams with the largest pockets to invest in the very best drivers and team engineers and the only way they are the teams with the largest pockets is because they have a track record of winning significantly and securing a huge amount of corporate sponsorship. That said in recent years we have seen the field change from all or at least mostly large teams to a field with a mixture of the big teams and young teams eager to make something of themselves. Even though these teams might, and often do, lose money year on year they are key to the success of Formula One and the big teams as they are the proving ground for young drivers entering the paddock. So should teams be limited to a regulated budget? My answer would be no! You should not put a limit on scientific and engineering advancements! We often see the smaller teams surprising us as nothing beats the potential of geniuses independent of access to capital.

No comments:

Post a Comment