Posted January 20, 2015 by f1nut in General Posts

F1 engine costs vs sponsorship

powered by honda
powered by honda

Last month, I wrote a post on some of the old Team Lotus contracts circa 1986-1988 that are available for viewing as historical documents online. As everyone knows the 2014 F1 season was all about the financial burden of the new hybrid turbo engines on all the customer teams and the demise of Caterham and Marussia.  If you believe the recent reports of Caterham and Marussia, their engine supply contracts from Renault and Ferrari were priced around $25m!

By comparison, if you look at Team Lotus’ 1987 non-exclusive contract with Honda, the price for the Honda RA167-E was a modest US$1m. The Camel sponsorship to Lotus in 1987 was worth a cool US$5m and Senna’s driver contract had a US$1.5m base payment, so it’s easy to see how tobacco sponsorship money was able to sustain team finances in the ‘80s era of F1. With Caterham and Marussia car liveries lacking in any major sponsors and being regular back markers, it’s no surprise that they relied heavily on pay drivers and with little results, eventually collapsed.

Even mid-tier Sauber has had to resort to pay driver support from Ericsson ($10m) and Nasr to help offset their Ferrari engines for the 2015 season. Expect to see a 2010 style blank liveried Sauber in 2015?

It will be interesting to see whether McLaren will have a title sponsor this year – they were missing one last season and ‘apparently’ Diaego’s Johnny Walker sponsorship (rumored to be worth £155m) is moving to the main F1 brand.  The Honda deal is rumored to be bringing £100m but they have recently picked up CNN from Caterham.

There have been reports about Bernie pushing for a return to cheaper ($14m!) V10 engines revving at 1,000 bhp with minimal electronics and spinning these as hybrid engines. It wouldn’t surprise if Bernie continues the retro revival and starts arguing for a return of tobacco sponsors…or maybe even e-cigarette sponsors!!