Formula One's teams made combined net losses of £127.5m last year according to an article in the Daily Telegraph by Christian Sylt.

The losses have come to light in the teams' accounts and were driven by the accelerating costs which fuelled the collapse of Caterham and Marussia in the past two months.

Marussia ceased trading in November whilst administrators have said that Caterham, which is also based in Oxfordshire, needs new investment to continue racing next year. If both fail to make it to the grid it will lead to the loss of more than 400 jobs. Others are said to be at risk and the accounts reveal why.

Remarkably, more than half of the total loss was made by Lotus which is controlled by the private equity firm Genii Capital.

Its £64.9m loss is the largest ever recorded by an F1 team and widened by £9.6m as revenue remained stable at £92.7m. Costs were cut by £3m but interest payments on the inter-company loans increased from £630,000 to £13.6m.

Staff numbers were boosted from 520 to 557 and it paid off as Kimi Raikkonen won the season opener for the team last year. It secured ten further podium finishes but by the end of the season cracks began to appear as Raikkonen left for Ferrari amidst claims that Lotus owed him £15m.

It had a noticeable effect as Lotus finished eighth in the standings this year. It is one of the teams which are pushing to cut costs in F1 where the average annual team budget comes to £150m.

As Pitpass revealed in October, Mercedes, made the second highest loss last year as operating costs rose £39.6m to £190.7m due to increased spending on its 2014 car. It is the highest amount that Mercedes has spent since it took over the outfit at the end of 2009.

Likewise, last year the Force India team received £17m from its shareholders, the trio of Indian conglomerate Sahara, Dutch businessman Michiel Mol and tycoon Vijay Mallya who has an estimated fortune of £480m. The team still burned up the third-highest loss at £38.5m and, as Pitpass revealed last month, its auditor said that the "material uncertainty" over whether its owners will continue to fund it may cast doubt over its future.

Just four teams made a net profit - last year's champions Red Bull Racing, its sister outfit Toro Rosso, Williams and McLaren. At £15.1m McLaren's after-tax profit was the biggest. It was driven by a new contract it signed with F1's boss Bernie Ecclestone which boosts its prize money and led to revenue rising £26.1m to £191.8m.

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READERS COMMENTS

1. Posted by tonyjak, 11/12/2014 10:42

"Is There Going To Be Fastest Lap Times For Abu Dhabi"

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2. Posted by Pyrope, 11/12/2014 0:57

"Interesting comments from Walter Wolf in a recent interview. I'm not old enough to remember his era, but according to him in those times you just assumed that F1 was a loss-making enterprise for the smaller teams and sucked it up (like Wolf) or else you ran around at the back of the field, living within your means, and picking up a few scraps here and there (like Frank Williams originally did). The idea that each and every F1 team should make a profit seems to be a very recent one."

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3. Posted by Colins'son, 10/12/2014 19:01

"As the old saying goes, ' A million here and a million there and pretty soon you're talking about real money!'"

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4. Posted by MaximumF1, 10/12/2014 7:15

"Toro Rosso (nee Minardi) profitable, who'd of thought?"

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5. Posted by Imsa, 10/12/2014 0:29

"There's an old saying in racing . . . "If you want to make a small fortune, start with a large fortune.""

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6. Posted by scf1fan, 09/12/2014 22:45

"So what happened at Ferrari?

From a profitability standpoint, it seems like a team's ability to perform on the track is secondary to their ability to cut a deal with Bernie. (And then they still don't want to share the ACTUAL prize money more reasonably.)"

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7. Posted by kiwi2wheels, 09/12/2014 20:21

"Forgot to add, it would be interesting to view the changes of the personal fortunes of the team bosses, especially Lotus."

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8. Posted by kiwi2wheels, 09/12/2014 20:19

"How to make a small fortune from motor racing......start with a ( very ) large one !"

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9. Posted by testa rossa, 09/12/2014 18:52

"Yes yes it is all the books ...ask KPNG or Deloitte how they cook or cool the books .
let us say we take it with a pinch of salt LOL"

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F1 teams lose £130 million in 12 months

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