There are some stories kicking around today about Sir Richard Branson having realised that there is money to be made by getting his Virgin Racing operation to finish 10th in the Constructors’ World Championship (nice to see a team owner who is closely following the business!). It is true that finishing 10th will bring money, but it is also true that for the new teams it might be wiser to finish 11th – because this might end up paying them more money.
Eh? Yes, it is true, weird but true.
The financial situation for the teams is a complicated business. It is covered by something called Schedule 10 of the Concorde Agreement which, I am told, is considerably longer than the Agreement itself. This allocates the money amongst the team on the basis of their heritage and their results.
There are three different categories of team: the first if called a Column 1 team. To become one of these a team must be eligible (which the new teams are now until they have been in F1 for a certain amount of time). They must also have finished in the top 10 in the Constructors’ Championship in two of the previous three years. The team receives a set percentage of the revenues for finishing 10th. Column 2 teams are those which have finished in the top 10 in the previous season, while Column 3 teams are those who started in 2010. They share a pot of $30 million. In addition they have some travel benefits including the free transportation of two chassis and 10,000 kgs of freight to the fly-away races and 20 Economy Class tickets.
Obviously in the longer term it is better for a Column 3 team to finish 10th and thus become a Column 2 team in future, but in purely financial terms if the Column 3 pot is divided up between surviving new teams (and not all will necessarily make it to the end of the season) it is possible that one team could end up with the majority of the money on offer, if the others cease to compete.
At the same time the revenues of F1 could reduce in 2010 (although that was not the case in 2009) as a result of the recession, which would mean that 10th place would pay less than it has done in previous years.
Thus finishing 11th may end up be more profitable than finishing 10th!
joeblogsf1 
Cannot argue with that analysis but….. Might Virgin not have access to cheaper flight cargo and people then most other teams 🙂
Rob,
There are several teams with alliances with airlines, but it really depends on where they fly to. Virgin was not much help in the recent Icelandic Volcano debacle, while Lotus’s Air Asia did a great job.
“not all will necessarily make it to the end of the season”
Is this a hint that one fo the current teams is not going to finish the season? if so, my money is on HRT followed by Sauber.
Ah yes, Richard Branson — say this for him, he’s not a tedious micro-manager! I particularly enjoyed his pronouncement last weekend on the need for a race in the US. He must have missed the memo about Austin.
I wonder how long that little arrangement with Manor will last? He got such tremendous return on investment with the Virgin name on the Brawn last year; it’s difficult not to think that he’s paying a lot more this year to get a lot less. The racing team seems to be an afterthought if anything for Virgin.
Certainly in the Plutocrat’s Championship, Tony Fernandez seems to be in the lead, and to be that rarest of rare things, a tycoon who does F1 properly, with just the right level of involvement. As opposed to Richard Branson who is too hands off, and Vijay Mallya who is too hands-on.
surely there is some clause in the schedule that prevents this? I would imagine the 10th team is rather annoyed!
sw6569,
Who knows? The Concorde Agreement is a confidential document. However, I do not believe that this is the case.
“surviving teams (not all will necessarily make it to the end of the season”
Anyone particular in mind, Joe ?
I’ve never really understood the F1 money rewards. It seems to be a case of ‘the rich get richer and the poor stay poor’. Of course, there should be a reward for winners and champions…I’m not saying there shouldn’t be. But, doesn’t it benefit everyone to keep the small/new teams financially healthy?
Have things changed so all teams get some money now? It used to be that if you didn’t score any points, you wouldn’t get any travel money.
I look forward to the backmarkers letting each other pass at Abu Dhabi… better yet, just go out for a lap and park the damn things in the pits! :p
It’s the same idea in qualifying too, 11th is only 8 meters back from 10th, but you get the benefit of strategic freedom. Granted this was more pronounced in 2009 than 2010 with different fuel weights, but it’s still a factor.
So who is at risk of not finishing? HRT seems obvious, but for some reason I think Collin Kolles will get that team on the right track. Lotus seems to have decent backing and their collective sh*t together. Sauber? Maybe, but that would be a shame because I am a fan of Peter Sauber and hate the predicament BMW left the team. What do you think Joe?
Joe, this is precisely why I love your blog, and come to that, Formula 1, it’s the details that make it such a fascinating sport. So it’s even better that the actual racing is finally getting us all interested again, roll on Valencia… oh, wait a minute. It can’t be as bad as it has been, can it?
Good to see Sir Richard right up on top of things!
The concord agreement must be written in invisible ink for it not to have leaked by now. Or does reporting the leak automatically lose one paddock priveleges?
Read the confidentiality clauses and you know why it has not leaked out.
Whoops…
Joe,
If the likes of HRT (for example) get bought out, are they still eligible to pick up 2010 earnings and if not, is the remaining monies then split between Virgin and Lotus?