What’s it cost to compete in Formula One? An IndyCar comparison

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Christian Sylt and Caroline Reid cover the business of Formula One. More of their work can be found at FormulaMoney.com.

The cars lining up to compete in this weekend’s Monaco Grand Prix and Indy 500 may appear the same. However, with even the smallest Formula One teams running on budgets around five times those of their leading IndyCar rivals, the similarity is only skin deep.

The casual observer might be forgiven for thinking that IndyCar has the superior technology, as Ed Carpenter set a pole position lap speed of 228.8 mph for this year’s Indy 500; Mark Webber’s top qualifying lap at the twisty Monaco track last year was just 100.4 mph.

In reality, the IndyCar teams purchase controlled-cost specification chassis from Dallara, whereas their F1 counterparts are involved in a costly high tech arms race to make it to the front of the grid. Unlike IndyCar teams F1 competitors are ‘constructors’ who build their own chassis — and in the case of Ferrari and Mercedes their own engines — at a cost of hundreds of millions of dollars annually.

The leading F1 teams are constantly developing their machinery in order to eke out the extra split-seconds that will edge them ahead of their rivals. Big name brands such as Red Bull and Mercedes are willing to foot the bill because F1 is the world’s most watched annual sporting event and puts their brands in front of half a billion people worldwide.

As a result, the biggest spending F1 team Ferrari will run on an estimated budget of $470 million in 2013. This is more than 30 times the estimated $15 million budget of the leading IndyCar teams such as Ganassi and Andretti Autosport. The figures — supplied by Formula Money — below explain how the money is spent.

TOTAL BUDGET
Top F1 team: $470 million; Top IndyCar team: $15 million

This includes the following key areas of spending:

THE CAR
Top F1 team: $125 million; Top IndyCar team: $3 million

The largest single cost for most F1 teams is the design, development and construction of a bespoke chassis. F1 teams must construct their own chassis and although the manufacturing costs of an F1 car are a relatively small $15 million per year, top teams can spend well over $100 million on research and development.

All IndyCar teams must buy their chassis from series provider Dallara. The price is $345,000 per chassis, but the purchase of aerodynamic packages designed for different circuits can add another $150,000-$200,000. A team typically gets through three chassis per driver each year.

THE ENGINES
Top F1 team: $130 million; Top IndyCar team: $2 million

F1 manufacturers such as Ferrari and Mercedes spend more than $100 million annually on engine development. This is principally to supply their own teams, but they are required to also supply other teams with engines and typically charge $13 million per season to do so.

Honda and Chevrolet typically charge IndyCar teams around $1 million per year per driver for an engine package which will allow the use of eight engines.

TESTING
Top F1 team: $15 million; Top IndyCar team: $1 million

Restrictions on F1 testing in recent years have seen budgets slashed from $35 million to $15 million annually in order to cut costs. This is still far larger than the IndyCar teams’ $1 million annual spending.

DRIVERS
Top F1 team: $47 million; Top IndyCar team: $3 million

Two times world champion Fernando Alonso is one of the highest paid sports stars in the world, receiving an annual salary of $40 million from Ferrari. In contrast leading IndyCar drivers receive $1-2 million per year. Unlike F1 drivers they also receive prize money – $2.5 million for Dario Franchitti when he won last year’s Indy 500 – but are usually expected to give at least half of this to their team.

ENTRY FEE
Top F1 team: $3.3 million; Top IndyCar team: $456,000

F1’s governing body, the FIA, operates a complex system for entry fees where each team is charged a basic fee of $500,000, plus $6,000 per point scored in the previous season for the constructors’ champion and $5,000 per point for everyone else. This has left 2012 champion Red Bull Racing with a bill of $3,260,000 this year. In contrast, IndyCar teams pay $12,000 per car per race.

HOSPITALITY
Top F1 team: $13 million; Top IndyCar team: $1 million

Hospitality may seem like a frivolous extra but it is a crucial part of how an F1 team operates. Sponsors spend up to $100 million annually so expect to receive silver service treatment when they visit a Grand Prix. A top F1 team can spend more on hospitality in a season than an IndyCar team spends on its entire budget. In contrast leading IndyCar teams may spend up to $200,000 at a showpiece event like the Indy 500, but far less at other races.

KEY SUPPLIES
Top F1 team: Free; Top IndyCar team: $1 million

One area where IndyCar costs far outstrip F1 is in the area of key supplies. Due to the high level of exposure F1 generates, many companies are keen to supply top level products free of charge in return for becoming an official partner of the team. Ferrari, for example, has sponsorship from a range of automotive companies including Shell (gas), SKF (bearings), NGK (spark plugs), Magneti Marelli (electronics) and Brembo (brakes). A typical top IndyCar team spends around $1 million a year on purchasing similar supplies.

OTHER
Top F1 team: $136.7 million; Top IndyCar team: $3.5 million

*Includes salaries, travel and factory costs.

INDYCAR: What Drivers Said after Friday’s two practices at Barber

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Here’s what drivers had to say after Friday’s two practice sessions for Sunday’s Honda Grand Prix of Alabama (there’s one final practice plus qualifying on Saturday):

JOSEF NEWGARDEN (No. 1 Hitachi Team Penske Chevrolet, 2017 Honda Indy Grand Prix of Alabama winner, 2017 Verizon IndyCar Series champion): “It’s great…home track for me. It wins the war between this place and Indianapolis (Motor Speedway) because it’s an hour closer, so I think that’s why I call it the home track. Unfortunately, we don’t race in Nashville anymore. But I’ve always loved Barber. It is a special place for me. It’s the place I got my first win with CFH (Racing) back in the day, and it’s a place I won my first race for Team Penske. It’s had a couple firsts for me, so it’s been good for that. Good memories. I love this racetrack. I think it’s one of the best that we get to drive at from sort of a style standpoint. It’s very technical, but it’s got a lot of flow to it. It feels kind of like a roller coaster to me is the best way to describe the style of it. I have a lot of fun here. I think it’s great. We’re going to try and have a good weekend. We had a pretty good start for the most part. We had some issues in the first session. Just kind of been dealing with a couple things that I think we got sorted out for the second session there, but we seem like we’ve got some speed. I think our other cars got some speed, as well. Simon (Pagenaud) looked like he suffered from maybe a similar problem, and I don’t think Will (Power) had a very good lap, so I think those guys will be right there with us. Team Penske I think is going to be strong tomorrow, I’m sure.

MATHEUS “MATT” LEIST (No. 4 ABC Supply AJ Foyt Racing Chevrolet): “We’re struggling with understeer in mid-corner, so we need more rotation in the car. If we can fix the mid-corner understeer, we’re going to have a fast car tomorrow. We’ll keep working on it, and hopefully we’ll have a great weekend.”

JAMES HINCHCLIFFE (No. 5 Arrow Electronics Schmidt Peterson Motorsports Honda): “We learned a lot today. We tried to come test here a few weeks ago, but unfortunately Mother Nature had a different plan, so we didn’t get a lot of running in. We came into this weekend with a bit of an evolution from what we tested, still were a little bit off, and over lunch, the Arrow Electronics guys made a couple of great changes. It doesn’t look great on the time sheets because our fast lap was when that red flag came out, so they took it away from us. I think we’re decently inside the top 10, which is a big jump from this morning.”

ROBERT WICKENS (No. 6 Lucas Oil Schmidt Peterson Motorsports Honda): “We lost water pressure somewhere in the Lucas Oil car, so we’re playing it safe. No water pressure means no water circulation to the engine, then it overheats and blows up. We’re taking the precautions to keep the engine alive, but unfortunately, we stopped after a couple of laps. It’s an hour free practice and we only did two competitive laps, so we’re just watching everyone else improve their cars and we aren’t able to right now. It’s pretty disappointing.”

SCOTT DIXON (No. 9 PNC Bank Chip Ganassi Racing Honda): “We’re in the ballpark at the front, which is a good start for the No. 9 PNC Bank team. The Penske cars are up front and I think that’s a result of them doing some additional testing here. We kind of expected that to start. We did a qualifying run and the car was just too loose for some reason. And then we were fighting understeer this morning, so we’ve seen both sides of it. Now it’s up to us to get it right for qualifying tomorrow.”

ED JONES (No. 10 NTT DATA Chip Ganassi Racing Honda): “It was a difficult end to the day for us. I think after starting well this morning, we struggled in the afternoon. It could have been the heat that affected us, I’m not really sure. Tonight, we’ll have to look at the data and what we learned from the NTT DATA car, talk to Scott (Dixon) and look toward tomorrow. I’m optimistic because we have a good base setup and we just need a little bit more work to get it right.”

WILL POWER (No. 12 Verizon Team Penske Chevrolet): “I think once again the temperature of the track really makes it tough in these cars. It was very nice this morning and was easy to get lap times. And then all of a sudden this afternoon, even on reds (Firestone alternate tires), it’s very difficult to get the car right. We’re going to have to go back and have a good think about it.”

TONY KANAAN (No. 14 ABC Supply AJ Foyt Racing Chevrolet): “It’s a difficult day. We’re struggling a lot. We’ve got a lot of work to do.”

GRAHAM RAHAL (No. 15 Mi-Jack Honda): “Today was OK. I didn’t think that we were great there in the second practice, but if you’re off a little bit, it can make a five-, six-, seven-spot difference. It’s going to be really tight (on the time sheets) there tomorrow, so we’ve got to work on it and get it a little better.” (About whether qualifying performance is even more important if rain falls during the race:) “Qualifying will be important, but I think if it’s rainy, I think you will be able to make moves and you will see a lot of guys make mistakes.”

SEBASTIEN BOURDAIS (No. 18 Team SealMaster Honda): “I am not quite sure what to think about the whole day. We are not super happy with the car, but in the meantime, it is decently fast. We made some gains and at least the car is doing one thing, so that’s the good thing. The SealMaster Honda No. 18 is in the ballpark. It seems like all we are doing right now is preparing for qualifying because it is definitely going to rain on Sunday. We are going to have to think very hard on what we are going to do in those conditions. We just have to keep working and see what we get tomorrow.”

ZACHARY CLAMAN DE MELO (No. 19 Paysafe Honda): “We didn’t have a great morning aboard the No. 19 Paysafe car as we struggled a bit with the balance, but the second practice session was a lot better. We ended up P12, but had the potential for a lot more. When we went out on the Firestone red (alternate) tires near the end of the session, a red flag came out and that didn’t help us. I think we definitely could have been in the top 10, maybe even the top five. Overall, it’s encouraging heading into practice and qualifying tomorrow.”

JORDAN KING (No. 20 Ed Carpenter Racing Fuzzy’s Vodka Chevrolet): “This morning was really good and we made some good progress. For this afternoon’s session, we changed a couple of things to see if they helped. We’re keeping the tradition, though, of not getting a lap time on reds (Firestone alternate tires), between traffic and red flags and yellows. We are farther down than I think we should be. We should be quite a bit quicker, probably seven or eight tenths faster than what we were. We’re not a million miles away. We just need a few more small improvements to get me a bit more comfortable with the car.”

SPENCER PIGOT (No. 21 Ed Carpenter Racing Fuzzy’s Vodka Chevrolet): “That was a really good session. It’s nice to end up at the front here at Barber. It’s one of my favorite tracks, I really enjoy it. The session was good right from the get-go on black (Firestone primary) tires. We were quite fast, then when we put the reds (Firestone alternate tires) on, the car just gained more grip. Sometimes when you put them on, it can really change the balance, but this time it felt really good. We were able to get a little more out of the car in pretty much every corner. I’m very happy with the Fuzzy’s Vodka Chevy so far, hopefully we can keep it up there.”

SIMON PAGENAUD (No. 22 Menards Team Penske Chevrolet): “The car is really fast. It was a really good session to start. But unfortunately, we had a bit of a spin on the reds (Firestone alternate tires) trying a little too hard, I guess. That’s what you have to do before qualifying. You have to find the limits, but I’m very happy with the Menards car. I think we’ll be in great shape tomorrow.”

ZACH VEACH (No. 26 Group One Thousand One Honda): “So far, it’s just been really nice to have experience at this track, which makes it a little easier coming in. We’ve been trying a lot of things today and I think we were a little stronger in the morning than this afternoon. We have a bit to go back and look at, but compared to where I was here last year, it’s night and day difference. I’m just happy to have the opportunity that we do, and we’re going to keep pushing forward.”

ALEXANDER ROSSI (No. 27 Kerauno / MilitaryToMotorsports.com Honda, Verizon IndyCar Series points leader): “This morning was definitely a struggle for all of us. I think the No. 27 car was the most outside of the window, but we made a lot of improvements over lunch. We have something to be positive about going into this evening and looking forward to tomorrow. I think we need to take one or two steps in a similar direction, but if we can do that, I think the Kerauno car will be good enough for the Firestone Fast Six.”

RYAN HUNTER-REAY (No. 28 DHL Honda): “I think we made steady progress through the day. We started out with the rear of the car way too exposed, too loose through most corners. We needed to bring it more into the window, which I think we did in the final session, considering we didn’t get a full run on new red tires due to a red flag. I think the DHL car has some good pace in it, so hopefully we can make the next step tomorrow.”

TAKUMA SATO (No. 30 Mi-Jack / Panasonic Honda): “The second session was better. I think we made some good progress from the first one. The first session was a little bit of finding the right direction to go in and it seems we found one. Still, we have a little work to be done Saturday. Having said that, there was quite a few yellows and red flags that interrupted the session. I know everyone is in the same boat, but our best lap was like a rerun and we were never able to do a long run, so it’s a little gray on how we will be for Sunday (in the race). We lost some downforce compared to last year and the tires have quite a good drop-off, or degradation, so after you use them the first or second timed lap, the tires are losing a lot of grip. It’s not a huge amount, we’re talking about a small amount, but it’s enough to make a difference. We are trying a different kind of philosophy in terms of the mechanical setup, trying to match the balance and grip level of where we were last year, so that’s why everyone is trying different things. Some people struggle, some people find a happy place.”

RENE BINDER (No. 32 Binderholz tiptop timber Chevrolet): “I think that the practice went well in the beginning. We did find some improvement, so it went better and better. Then we put the red tires on and I tried to push hard and maybe a little too much. I then lost the car, it went straight into the wall. It was a little bit too late with my hands, taking them off the steering wheel, so my left hand hurts a little bit.”

GABBY CHAVES (No. 88 Harding Group Chevrolet): “Tough day for us today. We had a mechanical issue towards the end of Practice 2, so it cut our time on track short. I know the Harding Racing guys are working hard to make sure everything will be good to go tomorrow for Practice 3 and qualifying. We’ll keep at it tonight to be ready to push tomorrow.”

MARCO ANDRETTI (No. 98 Kerauno / Curb Honda): “The Kerauno car was decent today, and coming out of Friday in the top 10 is a good place to start the weekend. We have a few things we want to work on overnight that I think will help the car be even better, and that’s what we’re going to focus on. Hoping to make it into the Firestone Fast Six tomorrow and challenge for the pole.”