Formula 1 team payments for 2016 revealed

[SectorOne]

Here´s a graph with the distribution of cash between PL and F1.



I wish i could superimpose these to create even more of a shock

[sgth0mas]

Here´s a graph with the distribution of cash between PL and F1.

http://i.imgur.com/1QjW7Dz.png

I wish i could superimpose these to create even more of a shock

How are ticket sales split though? In the NFL for example, the teams may look to get an equal revebue distribution from the league, but the ticket sales are a function of the team...so whole team revenue would probably look a lot like F1

[Cold Fussion]

I don't know anything about the Premier League. But, I do know that the four major North American leagues (NFL, NBA, MLB, NHL) are all non-profit and use various revenue-sharing models to disburse monies to their constituent teams. Though the systems are different, the gist of each tends to result in an even distribution of league-wide revenues, like national broadcast fees, licensing deals, sponsorships, etc., and a proportional distribution of local revenues, like ticket sales, regional broadcast fees, sponsorships, etc.

The arrangements seem to work pretty well.

Aren't some of the major NA leagues a little different because the clubs are essentially owned by the league?

How are ticket sales split though? In the NFL for example, the teams may look to get an equal revebue distribution from the league, but the ticket sales are a function of the team...so whole team revenue would probably look a lot like F1

As far as I'm aware ticket sales are a club matter only and thus that revenue is a function of the stadium size and club popularity.

[sgth0mas]

I don't know anything about the Premier League. But, I do know that the four major North American leagues (NFL, NBA, MLB, NHL) are all non-profit and use various revenue-sharing models to disburse monies to their constituent teams. Though the systems are different, the gist of each tends to result in an even distribution of league-wide revenues, like national broadcast fees, licensing deals, sponsorships, etc., and a proportional distribution of local revenues, like ticket sales, regional broadcast fees, sponsorships, etc.

The arrangements seem to work pretty well.

Aren't some of the major NA leagues a little different because the clubs are essentially owned by the league?

How are ticket sales split though? In the NFL for example, the teams may look to get an equal revebue distribution from the league, but the ticket sales are a function of the team...so whole team revenue would probably look a lot like F1

As far as I'm aware ticket sales are a club matter only and thus that revenue is a function of the stadium size and club popularity.

That makes sense. So some teams will get much more revenue than others jusy like F1.

Heres a good article of the NFL revenue split:

http://www.forbes.com/sites/mikeozanian ... 91e56326fa

"In 2014, operating income (earnings before interest, taxes, depreciation and amortization) averaged $76 million for the league’s 32 teams, ranging from a high of $270 million (Cowboys) to a low of $25 million (Atlanta Falcons)."

[bhall II]

Aren't some of the major NA leagues a little different because the clubs are essentially owned by the league?

Like seemingly everything else we do over here, it's a bit complicated. But, no, in practical terms, each league is owned by its teams.

[SectorOne]

That makes sense. So some teams will get much more revenue than others jusy like F1.

But that is money earned outside the Premier League payments, just like merchandise or sponsors.
Big difference to what happens in F1 where teams are given millions simply because they struck a deal with the promoter.

[sgth0mas]

That makes sense. So some teams will get much more revenue than others jusy like F1.

But that is money earned outside the Premier League payments, just like merchandise or sponsors.
Big difference to what happens in F1 where teams are given millions simply because they struck a deal with the promoter.

Unless that deal is based on the number of fans a team brings in...

[SectorOne]

That makes sense. So some teams will get much more revenue than others jusy like F1.

But that is money earned outside the Premier League payments, just like merchandise or sponsors.
Big difference to what happens in F1 where teams are given millions simply because they struck a deal with the promoter.

Unless that deal is based on the number of fans a team brings in...

Well let´s hope that´s the case as it would further show how deranged the distribution of money is in the sport.
Unless of course we assume that any fans of teams not on the list below simply don´t buy tickets.
I don´t see a ladder of payments (no matter how crazy the ratio is) for ticket sales anywhere.

Historical Payment 60 million - Mercedes, Williams,
Bonus Fund 114 million - Ferrari, Red Bull, Mclaren
Ferrari Payment 90 million - yep, you guessed it, Ferrari.

[mrluke]

That makes sense. So some teams will get much more revenue than others jusy like F1.

But that is money earned outside the Premier League payments, just like merchandise or sponsors.
Big difference to what happens in F1 where teams are given millions simply because they struck a deal with the promoter.

Unless that deal is based on the number of fans a team brings in...

Citation needed.

There is no evidence that this is either true or possible of being monitored.

What it really comes down to is do you want to encourage close competition or do you want to maintain the status quo.

If as the sports promoter your aim is to keep the pecking order as it is then give the top teams all the money and just enough to the bottom teams to stop them going bust.

If however you want to encourage competition then give everybody the same share.

If you really want to encourage competition you could reverse the payments to give the top teams naff all and the bottom teams £200m so they can catch up.

Cant see Ferrari still being a part of F1 if they have to fund their own team.

[sgth0mas]

Hang on...youve got this backwards...I dont need to cite anything. Youre the one making the accusations regarding the revenue split. Everyone knows ferrari has the largest fanbase. You need to cite how you know what the distribution is based on, youre the one claiming its wrong.

Im the one that said there is possible rationale behind it, and detailed that even in the NFL the top teams makes more than 10X what the bottom team was. The NFL remains competitive due to the salary cap and draft order...it has nothing to do with money.

If there were home and away races like their are games in other sports...i think we all know ferrari would bring in much more than manor or sauber. This is no different than the cowboys bringing in more than the falcons

[TzeiTzei]

IMO the FOM payments should have nothing to do prestige, brand, number of fans etc. It distorts the competition when some teams are favoured financially.

[SectorOne]

Hang on...youve got this backwards...I dont need to cite anything. Youre the one making the accusations regarding the revenue split. Everyone knows ferrari has the largest fanbase. You need to cite how you know what the distribution is based on, youre the one claiming its wrong.

Im the one that said there is possible rationale behind it, and detailed that even in the NFL the top teams makes more than 10X what the bottom team was. The NFL remains competitive due to the salary cap and draft order...it has nothing to do with money.

If there were home and away races like their are games in other sports...i think we all know ferrari would bring in much more than manor or sauber. This is no different than the cowboys bringing in more than the falcons

Once again. You can´t compare NFL to Formula 1. It´s a completely different structure.

For starters in NFL individual teams meet each other while in F1 everybody meets everybody at the same time.
Second of all the racetracks are not owned by the teams themselves.

Manchester United owns Old Trafford, Ferrari does not own Monza.

Manchester United does not get a "Manchester Payment" nor a "Bonus payment" or even a "historical payment"
They get paid a fair share and then make their OWN money on ticket sales.
That money neither Premier League or any other team has anything to do with or can even control.

we can quickly see that if Ferrari would not be given a bonus or ferrari payment but instead a share of a ticket percentage pay it would be far more realistic and meritocratic in the sense that they´ve actually earned that through the legacy of their brand that they themselves have created.

You can´t even deny such a payment because it´s run by the people who watch F1, not some shady business decision made with CVC and Bernie.

[bhall II]

we can quickly see that if Ferrari would not be given a bonus or ferrari payment but instead a share of a ticket percentage pay it would be far more realistic and meritocratic in the sense that they´ve actually earned that through the legacy of their brand that they themselves have created.

You can´t even deny such a payment because it´s run by the people who watch F1, not some shady business decision made with CVC and Bernie.

What's shady about a transaction that reflects what the market will bear? It happens every day in all walks of life, including the world of sports.

Lionel Messi earns £256,000 per week for FC Barcelona. His teammates earn anywhere from £2,500 to £200,000 per week. In all cases, the salaries reflect what someone was willing to pay, and I don't know that I've ever seen anyone argue that the results are unjust.

The problem is when it turns into what's called "rent-seeking."

Rent-seeking is the use of a company, organization or individual's resources to obtain economic gain from others without reciprocating any benefits to society through wealth creation.

In context, it would be very difficult to make a case that such a label can be applied to any team, because only in an oblique sense do they realize economic gains from each other.

Bernie Ecclestone, on the other hand, is a rent-seeking master. Propped up by forces the market can't control, e.g. government subsidies from ambitious Second World countries, FOM contracts are one-sided to the detriment of the teams, promoters, broadcasters, and ultimately the fans, for whom the cost of admission is growing higher and higher for a product many would argue is getting worse and worse.

[SectorOne]

What's shady about a transaction that reflects what the market will bear? It happens every day in all walks of life, including the world of sports.

Lionel Messi earns £256,000 per week for FC Barcelona. His teammates earn anywhere from £2,500 to £200,000 per week. In all cases, the salaries reflect what someone was willing to pay, and I don't know that I've ever seen anyone argue that the results are unjust.

The big difference is Messi´s salary is 100% based on current performance.
Ferrari´s salary is partly based on what they did in the past and some weird bonus payment nobody has any idea what it entails.

If Messi stops performing his salary will plummet. In Ferrari´s case not so much.

[bhall II]

The big difference is Messi´s salary is 100% based on current performance.

Like everyone in the entertainment industry, Messi's salary is a reflection of his drawing power, of which performance is but one aspect. His skills have no value until someone pays to see them.

In other words, Messi's income is based upon his employer's income.