Maybe there are only three or four teams that can invest over 200 millions, I think that's the idea, we're not talking communism here.
It's the problem of capitalism: either you have a low cost of entry to the market or you end "with only three fishes in the pond".
There is always the danger of a monopoly in F1 because the cost of entry is high
Thus, besides the big-three firms that "free" markets usually develop, the other 8 or 9 necessary to complete the grid can only survive if you provide them with an "economic oxygen bottle".
Cut cost ideas have to be related somehow with numbers, aint' it?
I'll invest 10 minutes learning about economics of F1, so don't expect any good conclusions.
So, here you have some numbers I found (totally "Wikipedish"), waiting for more input from the forum:
The title of this graph could be: "Damn. The engine budget is very large."
I'm hit by that graph. If true.
This is a crazy cost budget. 50% for engines and 8% for R&D and 8% for construction.
Drivers cost almost as much as the entire racing team.
The research and construction budget is as large as the "loan-shark" costs (so called "capital financing"). Caramba.
Again, the test team costs almost as much as the racing team.
The paddock (sponsor chasing) costs you half as much as the cars.
Conclusions:
This is a bussiness where the cost of opportunity of the money is high (capital financing), compared with the salaries.
The cost of selling (sponsor chasing) is very high. It seems like car sellers at its worst.
The actual manufacturing money of the "tub" is insignificant, compared with the money it costs to build an engine.
It makes me think that we're always claiming in this forum how important is that F1 exists, because it means engineering development, but those R&D figures are more or less standard for any industry.
The idea is that the crux of money spent is the damn engines. You're, essentially, selling engines.
It's really interesting from an "engineering standpoint": it's what you could call "the economics of the abuse".
I mean, the abuse of machinery. Essentially, you're spending your money on engines that are designed to last a mere 700 km or so.
The output power you get, you get it at a very high "engineering cost". There is a direct, steep relationship between the wear rate of the machine and its output.
So, from an engineer "ideal position", if you can burn your money faster than your opponent, you win.
This graphic is screaming to me: if you want to cut costs, use higher displacement engines at less load (rpm).
Or a radically different engine with a high weight-to-power output and low cost (yeah, keep dreaming).
I've just talked about a graph (not very well sourced, btw) on how money is spent.
I don't know if someone has the time (and the figures) to talk about where the money comes from (the income budget). That would be nice.
