Ferrari is one of the most well-known names in the world of motorsports.
The Italian racing team has a storied history in Formula One (F1), having competed in every season since the sport’s inception in 1950.
But beyond its reputation for speed and precision on the racetrack, many people wonder: does Ferrari actually make money from F1?
The short answer is yes, Ferrari does make money from its involvement in F1.
However, the extent to which it profits from the sport is a bit more complicated.
To understand how Ferrari makes money from F1, it’s important to first understand the structure of the sport’s revenue streams.
In F1, there are essentially three primary sources of revenue: the F1 Group, the teams, and the race promoters.
The F1 Group is the entity that owns and operates the sport, and it generates revenue primarily through broadcasting deals and sponsorship agreements.
The teams, meanwhile, receive a portion of the sport’s revenue in the form of prize money and payments for participating in the championship.
Finally, the race promoters pay fees to host each race on the calendar.
Ferrari’s revenue from F1 comes primarily in the form of prize money and sponsorship deals.
As one of the most successful and well-known teams in the sport’s history, Ferrari is typically among the highest earners in terms of prize money.
According to reports, the prize money for the 2020 F1 season was approximately $1.012 billion.
Of that amount, Ferrari reportedly earned roughly $180 million.
This placed the team fourth in the overall earnings standings, behind only Mercedes, Red Bull, and McLaren.
It’s worth noting, however, that the distribution of prize money in F1 is not equal among all teams.
Instead, the sport operates on a tiered system in which the top-performing teams receive a larger share of the prize money.
For example, in 2020, Mercedes earned the largest portion of the prize money, taking home approximately $230 million.
This was followed by Red Bull with $180 million, McLaren with $170 million, and Ferrari with $160 million.
The remaining teams received smaller amounts, with the lowest earners reportedly receiving around $30 million.
While prize money is a significant source of revenue for Ferrari, it’s not the only way the team profits from F1. Like many other teams in the sport, Ferrari also relies heavily on sponsorship deals to generate income.
One of Ferrari’s biggest sponsors is Philip Morris International, the tobacco company that owns the Marlboro brand.
While tobacco advertising is banned in many countries, including Italy, Philip Morris has found ways to continue supporting Ferrari through branding and marketing partnerships.
Another major sponsor for Ferrari is Shell, the oil and gas company.
Shell provides the team with fuel and lubricants, as well as technical support and branding opportunities.
In addition to these major sponsors, Ferrari also partners with a variety of other companies for support and funding.
For example, the team has worked with luxury watchmaker Hublot, electronics giant Acer, and telecommunications company Vodafone, among others.
Overall, it’s clear that Ferrari does make money from its involvement in F1.
However, the team’s success and profitability in the sport can be heavily influenced by a variety of factors, including its performance on the track, the distribution of prize money, and the success of its sponsorship deals.
In recent years, Ferrari has faced some challenges in F1 that have affected its financial performance.
For example, the team had a disappointing 2020 season, finishing a distant sixth in the constructors’ championship standings.
This led to a reduction in the team’s prize money earnings, as well as increased pressure to improve its performance in future seasons.
Additionally, Ferrari has faced some criticism for its reliance on tobacco sponsorship, particularly in countries where such advertising is banned.
While the team has found ways to continue working with Philip Morris through branding and marketing partnerships, some have questioned the ethics of accepting funding from a tobacco company.
Another challenge for Ferrari has been the ongoing COVID-19 pandemic, which has disrupted the sport’s calendar and reduced revenue for all teams.
In response, F1 has implemented cost-saving measures such as reduced testing and a cap on spending, which have affected all teams, including Ferrari.
Despite these challenges, however, Ferrari remains one of the most successful and recognizable teams in the sport, with a loyal fanbase and a rich history of success.
The team’s success on the track, combined with its partnerships with major sponsors, ensures that it will continue to be a major player in the world of F1 for years to come.
In addition to its involvement in F1, Ferrari also generates revenue through a variety of other channels.
For example, the company produces high-end sports cars and luxury vehicles that are sold to wealthy customers around the world.
In 2020, Ferrari sold approximately 9,100 cars, generating revenue of around $4.1 billion.
The company also operates a variety of other businesses, including a racing team for the Ferrari Challenge series and a range of branded merchandise such as clothing and accessories.
These businesses, while smaller than the F1 team and the car production division, contribute to the overall revenue and profitability of the Ferrari brand.
In recent years, Ferrari has also been expanding its presence in other areas, such as esports and sustainable technology.
In 2019, the company launched its own esports team, which competes in a variety of racing simulations and virtual events.
Additionally, Ferrari has announced plans to develop more sustainable technologies, including electric and hybrid vehicles.
In conclusion, while Ferrari does make money from its involvement in F1, its profitability and success in the sport can be heavily influenced by a variety of factors, including its performance on the track, the distribution of prize money, and the success of its sponsorship deals.
However, the company’s involvement in F1 is just one part of its overall business, which also includes the production of high-end sports cars, a range of branded merchandise, and a growing presence in other areas such as esports and sustainable technology.
Despite the challenges faced by the team in recent years, Ferrari remains one of the most iconic and successful names in the world of motorsports, with a dedicated fanbase and a reputation for speed, precision, and style.