Written by Katie Jeromson, Edited by Tarun Suresh
The 2023 Formula One season is coming to a nail-biting end in Abu Dhabi, it may not be for a championship win, but there is still plenty to play for in the Constructors Championship. As we come into this final weekend, we could see a total mix-up in the leaderboard; one place difference equates to millions of pounds for the teams.
Whilst Red Bull have romped away with a historic win, gaining 822 points over this 2023 season, plenty of intense battles are going on behind. Mercedes are barely a whisper ahead of Ferrari, sitting just 4 points ahead in the standings coming to a track that is expected to suit the Ferrari car more.
There could be more at stake financially for the Silver Arrows here, as Ferrari is the only team that gets a significant extra financial bonus due to being a legacy team (Ferrari has competed in every single Formula One season.) It is estimated that the difference between 2nd and 3rd place would see the loser miss out on around 8 million pounds.
Further down the grid, McLaren has had an incredible second half to the season, sitting fourth in the Constructors Championship on 284 points. However, Fernando Alonso and Lance Stroll will be hunting down the papaya-clad drivers on behalf of Aston Martin, who sit just 11 points behind McLaren. After a hopeful start to the year, the Silverstone-based team may be disappointed to finish fifth, but this is a marked improvement on two consecutive seventh-place finishes in the previous years.
The crunch time really comes when we look towards the bottom of the standings; Williams (28 points) is battling AlphaTauri (21 points). Just below Alfa Romeo are leading Haas, 16 points to 12. These are the teams where the prize fund allocation could make or break their following year.
Team Principal of Williams, James Vowles, has said that they are running the team out of the same production facilities they were 20 years ago and “To refresh the inventory of parts to the latest specification, [they] would have to outsource orders. That takes time and three times as much money.”
So how exactly do the teams earn prize money? The starting prize fund is around 50% of Formula One’s profits that year; however, if it's a particularly high-earning year, this does slightly decrease.
Then it gets a little more complicated as teams are allocated two sets of funds, simply put under column one and column two, as set out in the Concorde Agreement. This agreement sets out the way in which the prize funds are allocated and we are now on the eight regeneration of the contract that the teams agreed to in 2021.
The teams’ prize fund is split roughly equally between column one and column two, column one funds are then split equally between all the teams competing that season. Column two is where the team’s performance itself can impact them highly, as their final championship standing decides their cut of the winnings. The Column two prize fund is split with the team coming first taking 14%, then going down by 0.9%, and this lowers to 6% for the tenth-placed team.
Additionally, Ferrari receive their legacy bonus, thought to be around 2.5% of the revenue generated, and that may equate to around five million euros. Some teams also get bonuses on past performances; they may be a historically prestigious team or a consistent top-three finisher. How much these teams can earn is again based on Formula One’s profits.
With the top teams being compensated by these extra bonuses, which are seemingly unrelated to that year’s performance, it makes the fight of lower teams seem that much more important. Nevertheless, you can expect each team to fight tooth and nail for those final points of the season. Points which turn into millions gained or lost.