THE SCUDERIA'S SOURCE OF REVENUE IN F1

When you think of Formula 1, the first thing that will come to your mind is a certain car brand. A brand affiliated with red and is the definition of speed. Ferrari. They have had a long-standing influence on Formula 1 and the racing scene. Without Ferrari there is no Formula 1. But like every business, they need some sort of profit on the things they invest. So let us take a dive into how Ferrari profits from Formula 1.

The first most known way they gain revenue is from sponsors. Companies such as Santander and Shell pay Ferrari in the millions to promote their company. These companies pay 2 to 50 million dollars annually for these promotions. In 2023 they had earned an astonishing 243.6 million dollars ONLY from sponsorships. Sponsors also help create merchandise that represent the brand, which leads us to their second source of revenue i.e., Merch.

Although merch may seem insignificant, they play an important role in not only generating revenue for the company, but also in building a brand image. Therefore, with the help of a known sponsor of theirs, PUMA, they can produce such items, BUT merch only produces 30-40 million Euros for the company, being less than 1.4% of Ferrari's total revenue.

Their third source of revenue is the prize money. Depending on their standing in the Constructors Championship, their revenue will vary. So, the 1st in the constructors will get 14 of the total revenue, whereas the position of the team with the lowest standing gets 6 percent of the total revenue generated. In 2023, Ferrari got an estimated 122 million dollars for securing a 3rd place finish in the constructors, whereas Redbull, the winners of the championship that year got 140 million Dollars.

Their final source of revenue is an additional bonus they get due to their longevity in the sport, joining the sport in the year of 1950. This bonus is an incentive for the Scuderia to stay in the sport, because the team has a huge influence, and without them Formula 1 may suffer huge losses. Although this money in retrospect isn't a lot, being 50 million a year.

In retrospect it may only look like they gain a small amount of money for how big the brand is, being an estimate of 500 million dollars a year, we must remind ourselves that the invest at MOST 200-250 million dollars for all of the expenses regarding the team, gaining a 100% profit, and let’s not forget the influence that Formula 1 has on Ferrari and the image that it creates. Let’s not forget that Ferrari's main source of revenue is building and creating supercars, their influence in Formula 1 helps build a sense of superiority over other brands. As Enzo Ferrari had once stated, 'Ask a child to draw a car, certainly he will do it red'.  That's all you need to know about Ferrari.