Do drivers win prize money from GPs?

Hi all, just wondering if drivers win prize money from GP organisers for winning, podium, etc?

Anybody know? What about the constructors - do they win any prize money? Or is it just the trophies?

Drivers: No, they do not win prize money like in tennis or Golf. Teams hire them on contract. Usually a base salary plus certain bonus. Sometimes these contracts may have terms which link the pay to points / positions scored. And so on.

Teams: No, contructors do not win money directly. They earn points, and depending upon their net tally at the end of the year, they get more or less payment from Uncle Bernard. BCE is the the 'funnel' and he collects fees of tracks, TV revenue etc. He then gives a small share of this to the teams depending upon how competetive they have been in the season. More points, more money.

It may be possible that some sponspors of the team itself might have certain clause that links the funding to track performance. But again, no money from event organizers as such. They bribe / pay Bernard.

There are prize money for the GP, yes. They go to the global money (in adition to TV rights, race sponsors, etc) and are complicately divided after the season according to many criteria (including the position in the previous season, number of points won this season, number of pitbabes etc. A few years ago I read a vague description of the system; I think it was Ron when Stoddard was so hysterical about money but I can't find the article). However these money go the the constructor, not the driver directly.

You have been registered since 2005 and you ask this question? Perhaps you registered and forgot, giving up on F1 entirely?!

Originally posted by primer
You have been registered since 2005 and you ask this question? Perhaps you registered and forgot, giving up on F1 entirely?!

I've been an Autosport subscriber for a few years (when it was still AtlasF1) and registered for this forum when I first joined. But I haven't been very active here on the forum. Had some spare time a few days ago and was browsing the forum, and that was when my participation increased.

As for this particular question - it just never occurred to me. To clarify, I already knew that the drivers are pad by their teams, and their contracts may or may not include bonuses for wins, points, etc. I also already knew that the teams get a share of F1's profits, based on their performance during the season.

But what I was asking was whether - apart from the above - the organisers of the individual GPs provide prize money as well. For example, if the Singapore GP is sponsored by Singtel, would Singtel put up a prize purse or something, apart from the trophies that are awarded? I guess it is up to the individual event sponsors, but I wonder if there is a general practice.

I vaguely recall reading about a driver being given the keys to a car as part of his prize for winning a GP, and being rather bemused because it was quite a crap car which he ended up donating to charity. But I could be mistaken.

It's quite the opposite to prize money baring in mind the fees the pay the licences, which are based on the amount of points they score.

Originally posted by primer
Drivers: No, they do not win prize money like in tennis or Golf. Teams hire them on contract. Usually a base salary plus certain bonus. Sometimes these contracts may have terms which link the pay to points / positions scored. And so on.

Teams: No, contructors do not win money directly. They earn points, and depending upon their net tally at the end of the year, they get more or less payment from Uncle Bernard. BCE is the the 'funnel' and he collects fees of tracks, TV revenue etc. He then gives a small share of this to the teams depending upon how competetive they have been in the season. More points, more money.

It may be possible that some sponspors of the team itself might have certain clause that links the funding to track performance. But again, no money from event organizers as such. They bribe / pay Bernard.

You are incorrect on all counts. There is indeed prize money at each race, for the drivers and teams, and FOM are the people who cough up.

You'll find prize money in virtually all motorsport across the entire planet. Sponsorship generally only covers the expenses incurred in "getting to a race" so to speak (including paying salaries for team personnel and drivers). The sponsors certainly don't hand over money that goes on to become part of a teams profit margin.

But yes. There is prize money. You'll never definitively find out what the amounts are per result though, as Masonic levels of secrecy surrounds it.

nascar say what the prizefund is for each race, which is pretty cool...

Originally posted by pingu666
nascar say what the prizefund is for each race, which is pretty cool...

I liked the myriad bonus payouts given for various achievements in Indycar racing, too. Win all three 500-mile races in a season? Have another quarter-million dollars! Convert a pole into a race victory? Here's 80 grand. Et cetera. Although that second one would be a little easy to win in modern F1, but in CART it was a genuine achievement!

I thought there was also prize money/TV money if you were leading the race in the first quarter, second quarter, third quarter and finish.

Originally posted by Dolph
I thought there was also prize money/TV money if you were leading the race in the first quarter, second quarter, third quarter and finish.

this is true.

Originally posted by Mat


this is true.

I believe that has been scrapped since the last Concorde Agreement.

Originally posted by Imperial
Sponsorship generally only covers the expenses incurred in "getting to a race" so to speak (including paying salaries for team personnel and drivers). The sponsors certainly don't hand over money that goes on to become part of a teams profit margin.

What??

Originally posted by Racer Joe


I believe that has been scrapped since the last Concorde Agreement.

yeah possible. But didnt they basically 'roll-over' the old concorde, increase percentages to teams a little and that is what they are running off now?

It hasnt been signed as far as im are, but there is a MOU that this is what they run off until a new concorde is signed.

Originally posted by Mat


yeah possible. But didnt they basically 'roll-over' the old concorde, increase percentages to teams a little and that is what they are running off now?

It hasnt been signed as far as im are, but there is a MOU that this is what they run off until a new concorde is signed.

I distinctly remember that change but can’t remember if it was from a Paul Stoddard interview by Chris Balfe in pitpass quite a while back after PS’ little run-in with Ron at Canada a few years ago.

Originally posted by Racer Joe


What??

Ha ha, If there's a question you need answering I'll need a little more than "What??" to be able to know how to answer it!!!

In case I save you the trouble of typing, to expand on the above I am saying that for example Vodafone don't give Mclaren XXX Millions per season and 50% of it finds it's way into becoming Ron's new swimming pool at home.

Sponsorship does indeed pay the bills, but only those of the team itself, it doesn't get skimmed as profit.

Originally posted by Imperial

Sponsorship does indeed pay the bills, but only those of the team itself, it doesn't get skimmed as profit.

I think you might be wrong.

Mike Lawrence wrote as follows:
"Ron [Dennis] was straight with sponsors, there had been had some dodgy deals in motor racing. When Ron presented his budget there would always be someone who would query one figure. Ron would say, 'That is my profit. I am running a business, I expect to make a profit, as you do in your business. I am offering a business partnership.'"

Here a report from 2005 concerning the key how to spread the prize money:
20% for quali results, 45% for race results, 35% fixum.

Its in German, but Babelfish should do the trick:
http://www.motorspor...t_05121701.html

Originally posted by giacomo
I think you might be wrong.

Mike Lawrence wrote as follows:
"Ron [Dennis] was straight with sponsors, there had been had some dodgy deals in motor racing. When Ron presented his budget there would always be someone who would query one figure. Ron would say, 'That is my profit. I am running a business, I expect to make a profit, as you do in your business. I am offering a business partnership.'"

Cool. Didn't realise RD was able to squeeze some money for himself out of these deals.

Needless to say, it'll be a safe bet that (as an example) Mr Aguri wasn't taking any spare change home with him at the end of each day.

Originally posted by Imperial

Needless to say, it'll be a safe bet that (as an example) Mr Aguri wasn't taking any spare change home with him at the end of each day.

Dunno. However, plenty of F1 teams went bankrupt over the years, and I highly doubt that guys like Alain Prost, Eddie Jordan or Jackie Oliver joined the breadline during the process.

Originally posted by giacomo
Dunno. However, plenty of F1 teams went bankrupt over the years, and I highly doubt that guys like Alain Prost, Eddie Jordan or Jackie Oliver joined the breadline during the process.

That's because they never spent any of their own money during their time as team owners!

That's why Eddie Irvine never went ahead with his planned team purchase (of Midland? I forget) because he could never get enough of other people's money together. He said something along the lines of he'd never use his own wedge.

Originally posted by Imperial


Ha ha, If there's a question you need answering I'll need a little more than "What??" to be able to know how to answer it!!!

In case I save you the trouble of typing, to expand on the above I am saying that for example Vodafone don't give Mclaren XXX Millions per season and 50% of it finds it's way into becoming Ron's new swimming pool at home.

Sponsorship does indeed pay the bills, but only those of the team itself, it doesn't get skimmed as profit.

I didn’t specify my question because I didn’t know where to begin!

I think you have got it completely wrong to be honest. McLaren sells a sponsorship package to Vodafone, using your example there for say an annual amount of 50 million USD. Vodafone looks at what they get in return of those 50 big ones and decide whether they are in or out, to put it crudely. They can’t and are not entitled to know (and probably don’t give a rat’s ass) where that 50 million goes in terms of how McLaren disburse that amount – whether it is R&D, operating cost, hotel cost or massages for Lewis.

If McLaren ends up showing up a profit for that year, then Ron, as a shareholder, is entitled to his share of the dividend paid out from the profit, if the company decides to declare a dividend, or the amount is kept in retained profit and Ron has an indirect pro-rata ownership of that.

In the example of McLaren, it is owned by several parties. So, apart from the case of Ron Dennis himself, there is a clear separation of ownership and management – which means that the owners, such as Mercedes, will need to be reassured that the company’s financials are utilised, recorded and reported correctly. They can do that either through using an external auditor examining the financial statements, or an internal auditor examining McLaren’s internal controls, or a combination of both. Which means that Ron can’t use any of the company’s money as his own without the owners knowing. Sponsors won’t necessarily know because they are not entitled to. That is not part of the deal.

Conceptually if McLaren can sell 200 million dollars worth of sponsorship but only needing to spend 150 million dollars a year then it is good luck to them. There is nothing wrong with it and sponsors will only care if they are getting value for the amount of money they put in.

Originally posted by Racer Joe


I didn’t specify my question because I didn’t know where to begin!

I think you have got it completely wrong to be honest. McLaren sells a sponsorship package to Vodafone, using your example there for say an annual amount of 50 million USD. Vodafone looks at what they get in return of those 50 big ones and decide whether they are in or out, to put it crudely. They can’t and are not entitled to know (and probably don’t give a rat’s ass) where that 50 million goes in terms of how McLaren disburse that amount – whether it is R&D, operating cost, hotel cost or massages for Lewis.

If McLaren ends up showing up a profit for that year, then Ron, as a shareholder, is entitled to his share of the dividend paid out from the profit, if the company decides to declare a dividend, or the amount is kept in retained profit and Ron has an indirect pro-rata ownership of that.

In the example of McLaren, it is owned by several parties. So, apart from the case of Ron Dennis himself, there is a clear separation of ownership and management – which means that the owners, such as Mercedes, will need to be reassured that the company’s financials are utilised, recorded and reported correctly. They can do that either through using an external auditor examining the financial statements, or an internal auditor examining McLaren’s internal controls, or a combination of both. Which means that Ron can’t use any of the company’s money as his own without the owners knowing. Sponsors won’t necessarily know because they are not entitled to. That is not part of the deal.

Conceptually if McLaren can sell 200 million dollars worth of sponsorship but only needing to spend 150 million dollars a year then it is good luck to them. There is nothing wrong with it and sponsors will only care if they are getting value for the amount of money they put in.

conceptually I have to agree with you, however it may be a bit more complex than that. A company may not be entitled to know what you are going to do with the money, but if you want them to give it to you you may want to be prepared to supply them with hard numbers of where it will be going and how it will be used. This is not only because they are trying to get the best advertisment for the least amount of money but they are also trying to avoid any PR nightmares that you might be involved in that they want nothing to do with.

Originally posted by Imperial


That's because they never spent any of their own money during their time as team owners!

That's why Eddie Irvine never went ahead with his planned team purchase (of Midland? I forget) because he could never get enough of other people's money together. He said something along the lines of he'd never use his own wedge.

He had the cash, his bid was rejected in favour of another. He was backed by a Russian Vodka company.

Originally posted by Josta


He had the cash, his bid was rejected in favour of another. He was backed by a Russian Vodka company.

Not my understanding.

As far as I recall he never even go the bid making stage, he didn't raise enough money to do so.

Originally posted by Racer Joe
Vodafone looks at what they get in return of those 50 big ones and decide whether they are in or out, to put it crudely. They can’t and are not entitled to know (and probably don’t give a rat’s ass) where that 50 million goes in terms of how McLaren disburse that amount – whether it is R&D, operating cost, hotel cost or massages for Lewis.

As someone who looks after budgets for a living I will dispute the above until the sun goes down.

A sponsor most certainly is entitled to know where their money is going and they will have at least one person ensuring that the money indeed goes where it is supposed to.

Teams will have to submit some kind of report or return to a sponsor at certain times (could be monthly, quarterly etc) to prove their sponsorship expenditure is taking place and taking place in the manner it should.

You will in fact find that a teams annual accounts will show sponsorship income, from each individual sponsor, under the heading "Restricted Funds", which means exactly how it sounds: That you can't spend this money on anything other than the purpose for which it was earmarked.

All this stuff is pinned down securely.

It was indeed not known to me that Ron managed to squeeze a deal from Vodafone that included some cash headed in his personal direction (as stated by giacomo) but mark my words it will have been a clearly defined amount and will be written down in a contract. It doesn't work how you seem to be suggesting, that Ron (metaphorically speaking) just opened up the till one day and stuffed his pockets until he considered himself to have taken enough.

No, this stuff is heavily scrutinised. It may have been a bit slapshod 30 years ago but today even the smallest of F1 sponsors will have their finance department firmly on the case of what their money is being used for. Not down to the last brass tack of course, but not far off either.

I don't think the 'profit' Mike Lawrence mentioned was intended to go into the private pockets of Ron Dennis; I think it was intended to be the profit of the enterprise McLaren International.

IMO a huge CEO salary must be intended to go into the private pockets of Ron Dennis.

Originally posted by giacomo
I don't think the 'profit' Mike Lawrence mentioned was intended to go into the private pockets of Ron Dennis; I think it was intended to be the profit of the enterprise McLaren International.

IMO a huge CEO salary must be intended to go into the private pockets of Ron Dennis.

What year is Mike Lawrence talking about? Was it before Mercedes and others acquired a share? If so, back then Ron's share was about 40%, he was one of two partners, so why wouldn't the profit go into the pocket of a very senior partner of the enterprise?! He may have a nominal salary and rake in the aforementioned profit for all we know. It's a little presumptuos to base opinions and pass conclusions on a rather vague comment by Mike Lawrence. Oh, the guy who claimed that Kimi would not win a title and Toyota would not win a GP. Halfway there Mike

Originally posted by NukeIT


conceptually I have to agree with you, however it may be a bit more complex than that. A company may not be entitled to know what you are going to do with the money, but if you want them to give it to you you may want to be prepared to supply them with hard numbers of where it will be going and how it will be used. This is not only because they are trying to get the best advertisment for the least amount of money but they are also trying to avoid any PR nightmares that you might be involved in that they want nothing to do with.

I agree with you. In the real world, a sponsor will want to know how the team does things. Most products that we come across nowadays do not have their pricing based on cost - it is all reverse pricing where a product is sold at the maximum amount a buyer will bear (or at the amount sold to the most buyers or a combination of both). Same for advertising. McLaren will sell the package at the highest amount it can, keeping in mind what else is available in the marketplace (i.e. another team's title sponsorship package).

In the real world it is not as easy as to say I want you to use my money for expenses only and not for profit. Vodafone money is not in different colour, so to speak. So if McLaren shows a 200k profit it is impossible to tell from whom that 200k comes from.

Originally posted by Imperial


As someone who looks after budgets for a living I will dispute the above until the sun goes down.

A sponsor most certainly is entitled to know where their money is going and they will have at least one person ensuring that the money indeed goes where it is supposed to.

Teams will have to submit some kind of report or return to a sponsor at certain times (could be monthly, quarterly etc) to prove their sponsorship expenditure is taking place and taking place in the manner it should.

You will in fact find that a teams annual accounts will show sponsorship income, from each individual sponsor, under the heading "Restricted Funds", which means exactly how it sounds: That you can't spend this money on anything other than the purpose for which it was earmarked.

All this stuff is pinned down securely.

It was indeed not known to me that Ron managed to squeeze a deal from Vodafone that included some cash headed in his personal direction (as stated by giacomo) but mark my words it will have been a clearly defined amount and will be written down in a contract. It doesn't work how you seem to be suggesting, that Ron (metaphorically speaking) just opened up the till one day and stuffed his pockets until he considered himself to have taken enough.

No, this stuff is heavily scrutinised. It may have been a bit slapshod 30 years ago but today even the smallest of F1 sponsors will have their finance department firmly on the case of what their money is being used for. Not down to the last brass tack of course, but not far off either.

As an external auditor I can tell you that whatever anyone might say, it is close to impossible to say your dollar is used here and there and be able to prove it when you have a number of sources and a number of disbursements, unless you have as many bank accounts as you do sponsors. Then you are treating it like trust accounting and it is an absolute nightmare on a day to day basis.

You might have tons of information in enough spreadsheets to sink a battleship and keep paper shufflers and managers happy with the appearance of accountability maintained intact but at the end of the day it is just a numbers game, especially when not all McLaren come from sponsors. It would be relatively easy to report that all Vodafone’s money has been disbursed as expenses but some income from, say FOM, is kept as profit. Reporting as such doesn’t change the picture that McLaren technically does not need all the money from Vodafone to be used as expenses to keep the team running. It is just number shuffling.

Not sure where I suggested this: "It doesn't work how you seem to be suggesting, that Ron (metaphorically speaking) just opened up the till one day and stuffed his pockets until he considered himself to have taken enough."

A portion of the sponsor's monies are diverted to construction of a large motor home behind the pit complex. Does this count as a profit making activity or not?

Perhaps some sponsors are most happy with fancy champagne and a suite above the pits?

Originally posted by Racer Joe
Not sure where I suggested this: "It doesn't work how you seem to be suggesting, that Ron (metaphorically speaking) just opened up the till one day and stuffed his pockets until he considered himself to have taken enough."

That's my very basic diluted slant on this: "If McLaren ends up showing up a profit for that year, then Ron, as a shareholder, is entitled to his share of the dividend paid out from the profit"

I think we're somewhat off-topic however so I'll bail out now and apologies if I misinterpreted the above.