Cost of Red Bull's F1 dominance tops £420m
Monday 30 May 2011
The Austrian energy-drinks company Red Bull has spent a total of £422.4m on Formula One (F1) since buying its team from Ford at the end of 2004, according to new research.
The Milton Keynes-based team won last year's world championship with the German driver Sebastian Vettel, who also leads this year's standings and who won yesterday's Monaco Grand Prix. Data from F1 trade guide Formula Money shows that in 2005, its first full year as a team owner, Red Bull spent £58.3m on the sport. By 2009, its investment had nearly doubled to £106.8m as Red Bull fuelled the team's title-winning campaign.
To maximise lead time, development work on F1 cars is done the year before they are introduced and in 2009, Red Bull's spending on research and development increased by 18.8 per cent to £57.2m. It also spent £4.9m on improving its engineering facilities and although staff numbers remained stable at 592, total pay increased by 21.9 per cent to £45.9m. Vettel alone is believed to be paid £9.8m with his partner, Mark Webber, getting around £3.7m.
Red Bull wholly owns the team and provides the funding in return for its logos being emblazoned almost all over its livery. The team made a pre-tax profit of £3.9m on revenue of £160.8m in 2009 but according to Formula Money's data, factoring in the value of the brand's on-screen exposure gives a big boost to its return.
Red Bull has the most prominent logos on its team's livery and its on-track success made it the most visible brand in the sport for the past two years running. Red Bull's "advertising value equivalent" – the price it would have to pay to buy a similar amount of on-screen exposure – came to an estimated £136.9m in 2009 and £219.9m in 2010, when it received almost a quarter of the total received by all the teams.
Although it took victory last year, Red Bull was not the most cost-effective team in F1. That accolade went to McLaren which came second and narrowly missed out on the title despite having a much smaller budget than its rival Red Bull.
McLaren's budget is estimated at £158.9m compared with the £185.2m available to Red Bull. It led to McLaren's spending coming to around £350,000 per point it scored compared with £374,000 for Red Bull.
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