Formula 1’s prize money distribution system is not only based on the team’s finishing position in the constructor’s championship but also the deal that they have with FOM.
Now, the economics of races work in a manner that all the pooled in money from broadcasting, race hosting, track advertising is divided amongst the teams, after Liberty Media keeps a chunk of it for itself.
Now, this very division is carried out on the basis of the team standing and the respective deal that it has cut out with Formula 1.
Ferrari leads the pack with £147.2m set to be paid to the team. This is the highest amount any F1 team will receive from its 2017 season, Ferrari gets more than Mercedes despite having finished 2nd in the constructor’s championship, as Ferrari has a ‘Long Standing team’ payment clause in its payout structure.
Mercedes are second on the payment list, with the team set to receive a payment of £128.8m.
Red Bull(£110.7m) are 3rd on the list, followed by McLaren(£61.7), Force India(£52.4), Williams(£49.9), Renault(£47.3m), Toro Rosso(£42.4m), Haas(£39.9) and Sauber(£34.9m).
With respect to the finishing positions in the constructor’s championship standings, the best finishing team receives 19% of the total money. The last finishing team receives 4%.
The thing to note here is that the additional deals that the teams had cut during the Bernie Ecclestone Era will cease to exist after 2020.
The teams and Liberty Media are already negotiating new commercial deals from 2020, one where we could see more parity between the commercial contracts that teams receive.
Obviously teams like Ferrari want the current payout structure to still exist, wherein they receive additional bonus payments.
We’ll have to wait and see how Liberty Media tries to tackle these commercial issues.