#F1 – Performance vs Budget August 2016

BudgetvsPerformance2016 part 1

Yesterday I attended the F1 Black Book conference in central London. One of the takeaways from the event was, predictably, a copy of the 2016 Black Book. Beneath the equally predictable black exterior it contains a breakdown of all the revenues coming in to each team to provide a total 2016 operating budget. Of course such figures should be taken with a big health-warning, they are estimates rather than verified official figures. But even if we take them with a large pinch of salt they at least provide an estimate of the comparative wealth of the competing F1 teams. If we then plot these against the performance of each team up until the German Grand Prix then we can see a couple of interesting features.

The first is that, surprise, surprise, those with the larger budgets tend to do better on the track. The curve shows a positive relationship between budget and performance. The second aspect is that if we look at a performance curve extending from Mercedes down through Red Bull and then to Williams and Force India, it is pretty clear that both McLaren and Ferrari sit well behind this curve in terms of performance against budget. The other interesting question is how this may change during the final nine races of 2016. It seems to be usual to suggest that your F1 rivals are now focusing on their 2017 cars, if this is the case with Ferrari and McLaren then we would expect their position to actually get worse as others continue to develop their 2016 cars. However if no-one is focusing on developing their cars on the final nine races of 2016, then this should stay pretty much as is. Given the proximity of Williams and Force India and the relative value of the revenues for fourth versus fifth place you would expect that both teams will be doing their utmost to ensure they take fourth place. It will be interesting to see how this compares with the final position the teams are in after the Abu Dhabi Grand Prix in November.

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