28/10/2013
NEWS STORY
Earlier this month Pitpass' business editor Christian Sylt wrote a news story for the London-based business newspaper CityAM which revealed that Mercedes' Formula One team made an after-tax loss of £31.5m in 2012. Revenue remained stable at £115m whilst operating costs accelerated 20% to £151m as 86 staff were added taking the total to 612. However, that was only half of the story as Sylt revealed in the Sunday Express that Mercedes' F1 team injected a massive £200m into the UK economy last year.
It was the icing on the cake of an already-impressive day for the Brackley-based outfit as it overtook Ferrari at the Indian Grand Prix to claim second place in the Constructors' Championship.
Details of the economic impact of F1 teams are usually a closely-guarded secret. Calculating the data requires deep analysis of the location of the team's suppliers which is no mean feat given how many they deal with.
Mercedes alone works with 1,500 UK-based suppliers including caterers, designers, equipment manufacturers and haulage firms. Research from the German manufacturer shows that last year its F1 team and engine division spent £125m with them and employed 1,114 staff in the UK. This gave it a total wage bill of £69.9m bringing the economic impact to £194.9m.
Payments to UK suppliers comprised around half of the £277m total costs of the team and engine division. However, this is not a net cost to Mercedes as it is offset by income from prize money, sponsorship and lease payments from McLaren and Force India for the use of its engines.
It goes to show that there are two sides to every story. There are constant complaints about the amount spent by F1 teams but as this data shows, there are a lot of people in the UK who are doing very nicely from it.