Max Verstappen is the new Formula 1 World Champion.
As millions of people watched Verstappen pass Hamilton in the final lap in what has been one of the most exciting seasons of F1 (and motorsports) in history, what many did not realize was how much money is at stake for both Driver and Teams.
Formula 1 is the pinnacle of motorsports, making it the most expensive sport in the world. However, what does Max’s victory look like by the numbers?
To the Victor Goes the Spoils
At the end of each season, there is an allocated amount of prize money that goes to each team. The better the team does in the final standings, the more money they walk away with. Prize money is primarily based around how much Liberty Media, the parent company of Formula 1, earns in revenues for the year. Typically, the breakdown of the revenue is as follows:
- 50% of all revenue goes to the Formula 1 Group and Shareholders
- The remaining 50% goes to all of the teams
- 23.7% is divided equally among the teams
- Another 23.7% is divided based on where the team finishes in the constructors championship
- Ferrari gets an extra 2.5% because of their special contract with Formula 1
- The remaining money is divided to cover transportation costs for the teams over the season
How much money does this amount to per team? With the 2021 season bringing in an estimated $1.38 billion (the most of any sports competition besides the English Premier League), it is safe to say many of the teams will walk away with a hefty sum of money. However, official numbers have not been revealed, and rarely are published.
However, we can do some back of the envelope math to estimate how much each team may be walking away with. (Note: This is an estimate, and NOT official numbers)
|Team Name||Equal Portion Payout||Merit Bonus||Total Earned|
|Ferrari||$32.7mm||$55.6mm (+$34.5mm Bonus)||$122.8mm|
As noted above, these are not official numbers. These are based on payouts from previous years as well as how the teams finished in the 2021 season.
Teams will use this money to pay their hardworking employees, as well as pour money into research and development. However it should be noted that teams make hundreds of millions on sponsorship deals, and many teams are financed from their parent companies (such as Mercedes and Ferrari).
While the teams are taking home loads of cash, what do the drivers get from it?
According to the rules, Formula 1 drivers technically do not get a cut of the prize money distributed to the teams. Drivers are paid through 3 primary channels:
- Performance Bonuses
Salaries are negotiated at the beginning of the season, and are relatively straightforward. However, it is widely debated how much each driver is paid. While there are cost caps on developments on the car, there is not a salary cap for drivers.
Below is the estimated salary for 2021 for the top 10 drivers. Remember, these are estimates, however they probably are not widely off-base.
|Lewis Hamilton (Mercedes)||$30mm|
|Max Verstappen (Red Bull)||$25mm|
|Fernando Alonso (Alpine)||$20mm|
|Daniel Ricciardo (McLaren)||$15mm|
|Sebastian Vettel (Aston Martin)||$15mm|
|Charles LeClerc (Ferrari)||$12mm|
|Valtteri Bottas (Mercedes)||$10mm|
|Kimi Raikkonen (Alfa Romeo)||$10mm|
|Carlos Sainz Jr (Ferrari)||$10mm|
|Esteban Ocon (Alpine)||$10mm|
What is more exciting, though, is the bonus potential based on how the driver performs for the season. Making headlines right now is the bonus that Max Verstappen won, and the one Lewis Hamilton lost, on Sunday.
While Max’s salary is $5 million less than Lewis, winning the World Championship earned him a bonus of $15 million. Lewis left an estimated $5.3 million in bonuses on the table with his loss on Sunday.
Do not shed too many tears though for Hamilton, as he still rakes in an estimated $13 million from sponsorship deals with Monster, Puma, Tommy Hilfiger, Sony, etc. Verstappen certainly has his own fair share of sponsorships, however none are as big as Hamilton’s.
All-in, Max is poised to rake in around $40 million this year from his spectacular season.
While there are other athletes in the world that earn obscene amounts of cash (McGregor is poised to earn $180 million in 2021 alone), one can see just how much wealth is in Formula 1. There is a reason why it’s often called the flashiest sport on earth.