Red Bull Exposes Cost of Rule Change in F1

Red Bull boss Christian Horner says the major change to the 2017 Formula 1 regulations drove significantly increased spending for all teams.

The team’s accounts for 2017 reveal that the team’s spending rose from £193m the previous year to £226.7m, representing an increase of 17.4%.

By a remarkable co-incidence the rise in costs at Mercedes in 2017 also equated to 17.4%.

Both teams have cited the change to wider track, high downforce cars as the reason for the increase in R&D spend.

“It’s as simple as that, the cost of change in F1 is enormous,” Horner told Motorsport.com.

“You can see it will have an impact on all the teams. When you scrap a concept of regulations and have a change of the size that we had, it’s significant.”

The accounts also show that their turnover rose from £197.9m in 2016 to £231.3m.

Included in that was an increase in the funding provided by Red Bull parent company in Austria to top up outside sponsorship and F1 prize money income.

That figure jumped from £40.6m to £56.5m, having risen steadily since Red Bull ended its streak of world championship wins, thus earning less prize money and requiring more input from the Red Bull.

That figure is very comparable with the approximately £60m marketing fee that Daimler AG paid to its F1 team in 2017.

In both cases the numbers indicate that the parent companies get a very good return relative to what they spend.

“F1 still represents strong value for the brand,” said Horner. “It’s the biggest marketing activity within the Red Bull Group. F1 has a global audience and reach. Obviously its digital audience is increasingly rapidly as well.

“And Red Bull through F1’s own analysis is the number one brand in the sport. So in terms of ROI F1 delivers for Red Bull, otherwise obviously they wouldn’t be here.

“The numbers will look again better with the introduction of title sponsorship with Aston Martin, and there’ll look better again for next year. Certainly the Red Bull contribution will be stable.”

The team again made a modest profit of £1.1m, up from £0.9m in 2016.

The financial picture is complicated by the role of its sister company Red Bull Technology, which is regarded as a supplier to the Austrian marquee, as well as providing services to Toro Rosso.

The company employs just 58 people, while those directly involved in developing the cars are employed by Red Bull Technology.

However, Horner insists that the Red Bull Racing numbers present the true picture of how much it spends to go racing, as it includes the payments made to RBT: “It’s effectively a supplier to RBR, and a supplier to STR, and through a sub-division of advanced technology, there are other projects.”

Turnover at RBT was up from £247.7m to £291.4m, while costs rose from £206.4m to £244.2m, and profits increased by £3.0m to £11.3m. Headcount at RBT was up from 758 to 793.