Mercedes F1 team spent over £324m to win in 2020

The Mercedes Formula 1 team spent £324.9m to win the 2020 World Championship, newly released company accounts have revealed.

Mercedes F1 team spent over £324m to win in 2020

The number represents a slight drop relative to the £333.2m it spent in 2019, reflecting both a shorter race calendar and a general move by the sport to reduce costs.

Although the headline spending figure includes many items that do not come under F1’s new cost cap, it nevertheless indicates just how much the team has had to restructure to meet this year’s limit. The cap is pegged at $145m, or £115m, for 2021.

The figures also indicate that the team made it through the COVID-hit 2020 season in surprisingly good financial shape, with its turnover dropping only slightly from £363.6m to £355.5m.

That small discrepancy shows that while like its rivals Mercedes was hit by the overall drop in F1 income and hence payments to all teams, it still generated significant sponsorship income.

The team posted a profit after taxes of £13.6m, down slightly from £14.7m in 2019.

The numbers relate only to the costs of running the Brackley race team, and include a fixed £13m fee paid to the HPP division for the use of its engines, the same amount paid by other Mercedes PU users.

Despite the impending arrival of the cost cap for 2021, the personnel head count at Brackley continued to rise last year, from 968 in 2018 and 1016 in 2019 to a record 1063 in 2020. That included an extra 34 people added on the design and engineering side just over the past year.

In his report on the year Mercedes F1 boss Toto Wolff noted: “In 2021 the team will continue to develop its financial sustainability, aided by delivering maximum competitiveness under the new financial regulations and by diversifying and leveraging the capability of the team through the Applied Science division.”

Mercedes W12 in the garage

Mercedes W12 in the garage

Photo by: Steve Etherington / Motorsport Images

Mercedes is pursuing several projects outside its main F1 business, including cycling and America’s Cup programmes associated with INEOS, the company that was announced as a one-third owner of the team in December. That shareholding transaction is still going through.

Regarding the ongoing impact of COVID-19 Wolff said: “Thanks to the range of revenue streams during the year, the company is still able to maintain profitability and to meet all financial obligations.

“A prudent approach will continue to be taken in regard to possible impacts on the business, and contingency plans are regularly reviewed to mitigate effects of the virus on the business.”

He added: “As a high technology business, the team can adapt competitively and commercially to changes in its operating environment and will continue to invest in its capability and culture to ensure medium and long-term success both on and off the track.”

Read Also:

Mercedes also made it clear that its F1 programme continues to have a positive impact on the company as a whole.

The company noted: “In parallel to the team’s success in recent seasons, the Mercedes brand has grown in value from $31.9 billion in 2013 to $49.3 billion in 2020, with F1 making an important contribution to the brand’s status as the eighth most valuable in the world.”

The team also pointed out that over the 2020 season it received 19.2% of the TV coverage – actually a drop from 23.6% in 2019 – and generated a cumulative Advertising Value Equivalent of $5.873 billion for its commercial partners.

shares
comments

Related video

F1 Spanish GP: Verstappen tops final practice from Hamilton
Previous article

F1 Spanish GP: Verstappen tops final practice from Hamilton

Next article

Formula 1 encouraging teams to look at American drivers

Formula 1 encouraging teams to look at American drivers
The inconvenient truth about F1’s ‘American driver’ dream Plus

The inconvenient truth about F1’s ‘American driver’ dream

OPINION: The Formula 1 grid's wait for a new American driver looks set to continue into 2023 as the few remaining places up for grabs - most notably at McLaren - look set to go elsewhere. This is despite the Woking outfit giving tests to IndyCar aces recently, showing that the Stateside single-seater series still has some way to go to being seen as a viable feeder option for F1

How a bad car creates the ultimate engineering challenge Plus

How a bad car creates the ultimate engineering challenge

While creating a car that is woefully off the pace is a nightmare scenario for any team, it inadvertently generates the test any engineering department would relish: to turn it into a winner. As Mercedes takes on that challenge in Formula 1 this season, McLaren’s former head of vehicle engineering reveals how the team pulled of the feat in 2009 with Lewis Hamilton

Formula 1
Aug 15, 2022
The under-fire F1 driver fighting for his future Plus

The under-fire F1 driver fighting for his future

Personable, articulate 
and devoid of the usual
 racing driver airs and graces,
 Nicholas Latifi is the last Formula 1 driver you’d expect to receive death threats, but such was the toxic legacy of his part in last year’s explosive season finale. And now, as ALEX KALINAUCKAS explains, he faces a battle to keep his place on the F1 grid…

Formula 1
Aug 13, 2022
The strange tyre travails faced by F1’s past heroes Plus

The strange tyre travails faced by F1’s past heroes

Modern grand prix drivers like to think the tyres they work with are unusually difficult and temperamental. But, says  MAURICE HAMILTON, their predecessors faced many of the same challenges – and some even stranger…

Formula 1
Aug 12, 2022
The returning fan car revolution that could suit F1 Plus

The returning fan car revolution that could suit F1

Gordon Murray's Brabham BT46B 'fan car' was Formula 1 engineering at perhaps its most outlandish. Now fan technology has been successfully utilised on the McMurtry Speirling at the Goodwood Festival of Speed, could it be adopted by grand prix racing once again?

Formula 1
Aug 11, 2022
Hamilton's first experience of turning silver into gold Plus

Hamilton's first experience of turning silver into gold

The seven-time Formula 1 world champion has been lumbered with a duff car before the 2022 Mercedes. Back in 2009, McLaren’s alchemists transformed the disastrous MP4-24 into a winning car with Lewis Hamilton at the wheel. And now it’s happening again at his current team, but can the rate of progress be matched this year?

Formula 1
Aug 11, 2022
Why few could blame Leclerc for following the example of Hamilton’s exit bombshell Plus

Why few could blame Leclerc for following the example of Hamilton’s exit bombshell

OPINION: Ferrari's numerous strategy blunders, as well as some of his own mistakes, have cost Charles Leclerc dearly in the 2022 Formula 1 title battle in the first half of the season. Though he is locked into a deal with Ferrari, few could blame Leclerc if he ultimately wanted to look elsewhere - just as Lewis Hamilton did with McLaren 10 years prior

Formula 1
Aug 9, 2022
The other McLaren exile hoping to follow Perez's path to a top F1 seat Plus

The other McLaren exile hoping to follow Perez's path to a top F1 seat

After being ditched by McLaren earlier in his F1 career Sergio Perez fought his way back into a seat with a leading team. BEN EDWARDS thinks the same could be happening to another member of the current grid

Formula 1
Aug 8, 2022