The true cost of finishing 11th

manor

Dear reader,

Sometimes you just need to hold your hands up and admit you were wrong and that time has come for the normally stellar MRFB-HQ.

Over the past few blogs we have been stressing the importance of the team remaining inside the top 10 of the Constructors Championship due to the prize money that is involved. We were utterly despondent last Sunday night when Felipe Nasr brought his Sauber home in 9th position and thus moving Sauber ahead of Manor and denying the team a much needed cash boost. However, it turns out that Sundays result will probably cost the team around $7 million dollars and not the $30 million dollars we claimed on Sun

We did not just pluck this figure out of thin air. This was the figure quoted almost everywhere else, including during the Sky F1 broadcast and the Channel 4 F1 Twitter account during the climax of Sundays race. Usually very reliable and well informed people such as Martin Brundle repeated what we too had been stating. It says a lot about the complex nature of F1 team payments that an actual understanding of how it works is hard to come by.

Fortunately for us, Joe Saward who specializes in the business side of F1 has clarified the situation and explained exactly how the tiered payments work. We normally avoid copying and pasting from other websites but we will make an exception this time but encourage you to check out Joe’s website in return. You can read the whole article here.

“To briefly explain: there are two equal prize funds: Column 1, which pays out 10 equal sums to the top 10 teams. In order to qualify for Column 1 payments, a team must have been in the top 10 for two of the last three seasons. Thus if Manor or Sauber is 11th this year it will still qualify for Column 1 money in 2017, but if it is 11th again in 2017, it will not.

The separate Column 2 fund is divided up on the basis of the previous year’s result only, with the World Champion team getting 19 percent of the fund, the second 16 percent, the third 13 percent, the fourth 11 percent, the fifth 10 percent, the sixth nine percent, the seventh seven percent, the eighth six percent, the ninth five percent and the 10th four percent.

Each of the Columns is made up of 23.75% of the EBITDA of Formula One World Championship Ltd. If you do the sums, this means that 10th position in Column 2 is worth $11 million, which explains why the fight is so important. It is a question of the survival of the fittest, because if Haas is again in the top 10 in 2017 it will then become a Column 1 team and will be paid at least $27.5 million (although the figure will change depending on the EBITDA) while if the 11th team is again 11th it will lose this money, in addition to having lost $11 million this year.”

Soon after Saward’s article appeared online Autosport kindly created this graphic for those who don’t like to read about numbers.

manormaoney

So there you have it, 2017 is a VERY big year for the team and I don’t think it is too overstating it to say that it is probably the last roll of the dice for the team under its current guise. One of the men who are currently being discussed for piloting the MRT06 is Felipe Nasr. How ironic would it be if he is the man attempting to save the team having helped put them in this position in the first place.

In the short term, whilst still a blow to the team, a $7 dollar surplus in the teams budget can be made up by employing two drivers instead of just one. If Pascal Wehrlein does not return for 2017 with the backing of discounted Merc engines, it will tell you a lot about the financial health of the team.