Formula 1 prize money: Why constructors’ title trumps driver championship
In Formula 1, the glory always seems to belong to the driver who is crowned world champion. That is justified: the winner has usually earned the trophy and become the one to beat with a consistent season of quality results.
But the reality is that for the majority in Formula 1 it is not the driver championship that matters most, it’s the constructor’s championship.
While the likes of Max Verstappen, Lewis Hamilton and Nico Rosberg basked in their individual glories, the constructors’ champions were filling their wallets. Because while successful drivers help bring sponsorship to teams, it is team performance that pays back in the garage.
Last season around $1.5bn was distributed to the 10 teams based on finishing position in the constructors championship after Formula One Group generated $3.4bn in revenue in 2024, when it also broke through the $20bn market cap figure.
Payouts were up by almost $200m from 2023, when F1 made $3.2bn – itself an increase from $2.57bn in 2022.
Money, money, money
Last year Verstappen finished top of the solo standings but his Red Bull finished third in the team table, meaning Christian Horner’s outfit got $140m, $21m less than McLaren and $11m less than second place Ferrari.
For bottom team Sauber, the prize was $69m, $10m short of Williams in ninth and $21m short of RB in eighth.
There is a direct correlation, therefore, between Formula 1 as a whole being successful and the return for teams being worth the buy-in. This is because of the Concorde Agreement, which runs through until 2026 and dictates, among a number of other areas, the profit cut.
It states that Ferrari gets a bonus payment for being, well, Ferrari, while teams who help the sport grow commercially are also rewarded.
Each piece of the pie is getting bigger and bigger, despite the teams being forced to stick to a cost cap of $140m, which works out at less than McLaren’s payout from 2024.
Formula 1 is changing
With that in mind, there’s an uncomfortable reality coming for the 10 teams on the grid and it is in the form of the red, white and blue of the USA.
Last week the agreements were signed which endorsed Cadillac – formerly Andretti but now in partnership with General Motors – onto the grid from 2026, seeing the field expand to 11 teams and 22 drivers.
There was a time when, in 2017, Formula 1 couldn’t tempt anyone into the sport to replace the struggling Manor Racing. But now it is so difficult to get onto the grid, some of which is down to one major obstacle.
From the new Concorde Agreement in 2026, the pie will be cut 11 ways rather than 10 – meaning teams will get less, unless they can dramatically commercialise the sport further.
This season, therefore, could be crucial for teams looking for their last bumper payout before their slice is trimmed to make room for Cadillac – likely to be a major player in the North American market.
Prize money in the millions
Every crash, missed qualifying session and no-point finish could be detrimental to this final year of banking cash, especially for mid-table teams whose revenue payout matches their cost cap. This scenario means the team can use the growing sponsorship market to bolster reserves and spend on the best drivers rather than worrying about build costs.
The gross, and net, revenue figures may increase in the coming years as Formula 1 continues its global domination, but the percentage of revenue received will soon be split between more teams.
So when you look at the front of the grid and see five drivers from five teams fighting it out across this 24-race season, take a look at the team principals on the pit wall. Because they’ll likely have one eye on their second driver, making sure they’re in the hunt and taking points off rivals. Every decision could literally be worth millions.