Lewis Hamilton has earned over 5000 points in Formula One throughout his career thus far which is worth more than $5 billion dollars. This is a result of the Concorde Agreement where a teams success over the last 10 years is also rewarded. This is explained further in the post how this works and why teams have such high dollar values these days.
The one thing I learned when doing this post was that the constructors points teams earn has a cost. Every point a team earns in the constructors title has a cost of $6575 and the team that wins the title pays $7893 per pint. Not to worry as each point today has an estimated value of $1 million dollars.
There are many different reward pools offered to the teams in Formula One and where points earned do playa vital role in the percentage of those rewards earned.
First up we have a historic team bonus which rewards teams who have stuck with Formula One and have been successful. Ferrari is the biggest benefactor of this reward and this is paid to them annually.
Next up is the past performance pool which covers the last 10 seasons and is taken from a percentage of revenue F1. Past championship wins for both drivers and constructors titles take the lions share of this reward. A team like Mercedes who won 7 drivers and constructors titles in a row with the last in 2021 would benefit right up to 2031. This is why Hamilton's points are worth far more than $1 million each and has been suggested they could be worth 4 x that much bringing a value of $20 billion. This is another good reason for the top teams to have the best drivers and to pay them what they are worth. Verstappen earning $65 million per season does not seem that much when you consider his performances along with the team are valued over a 10 year period.
There is also a Heritage payment for teams like Williams who receive an extra bonus payment each season. This is not based on performance, but more through the team being an independent team and to keep them active in Formula One they needed additional support.
The teams have a budgetary cap of $145 million per season which is under discussion to increase this to $220 million. The Formula One teams today are very profitable and the budgetary cap makes the teams stick to a business model that is sustainable.
In 2023 the F1 (Liberty) generated over 3 billion in revenue which triggered a bonus for all the F1 teams receiving 45% of all profits. If the total prize for the F1 teams does not surpass $1.1 billion then Ferrari receive an extra 5% which is the historical reward bonus. Ferrari has a cap of 10% if the reward pot exceeds $1.6 billion which is where the revenue pot has been sitting for 2024 and 2025.
Just looking at these numbers it is rather evident teams are making very good money each season and even if they reached their $145 million budget cap. All the extra bonuses would cover that before any performance points earned on the track.
Last season McLaren earned 666 pts. Ferrari 652 pts, Red Bull 589 pts, Mercedes 468 pts, Aston Martin 94 pts, Alpine 65 pts, Haas 58 pts, RB 46 pts, Williams 17 pts, Sauber 4 pts. Now equate each point as $1 million dollars knowing they also shared a pot of over $1.6 billion.
As you can see everyone earned money and all the teams down to Williams would have made profit especially with Williams earning the Heritage payments. This is probably one good reason for the new owners to keep the Williams name as I am sure if this would change they would forfeit that reward.