F1 prize money pot grows to $1.25 billion for 2025, with major shifts in team payouts

The total prize money pool for Formula 1 teams is set to reach approximately $1.25 billion for the 2025 season, reflecting the sport's continued financial growth. This represents a significant portion of F1's total revenue, with 45% of the estimated $3.7 billion in revenue for 2025 being allocated to the teams, 75% of which is distributed as prize money based on championship position.

Why it matters:

Prize money is a critical lifeline for F1 teams, directly funding their competitive operations and development. The substantial year-on-year increase in the total pot underscores the commercial health of the sport under Liberty Media. However, the dramatic shifts in individual team payouts, driven by on-track performance, can have a major impact on a team's financial stability and its ability to invest in future competitiveness, creating a performance-based feedback loop.

The details:

The distribution follows a descending percentage scale from the constructors' champion to tenth place.

• McLaren, as the 2025 champion, is set to receive the largest share at 14% of the prize pool.
• Mercedes makes a significant jump, moving up from fourth in the 2024 standings to second in the payout order.
• Red Bull maintains its third-place position in the financial ranking, mirroring its 2024 constructors' championship finish.
• Ferrari experiences a notable drop, falling from the runner-up spot in 2024 to a lower position in the 2025 prize money allocation.
• Williams emerges as one of the biggest movers, vaulting from ninth to fifth place in the payout structure.
• Alpine faces the steepest decline, dropping from sixth to tenth (and last) place, which will significantly impact its operational budget.

The big picture:

The financial redistribution highlights the volatile and competitive nature of the midfield battle in Formula 1. A single position change in the constructors' championship can translate to tens of millions of dollars in prize money, making the fight for seventh, eighth, and ninth places as financially crucial as it is sporting. The system inherently rewards recent success, allowing top teams to reinforce their advantage, while struggling teams must find efficiency to close the gap with potentially smaller budgets.

What's next:

With an 11th team set to join the grid in the coming seasons, the prize money distribution model will face new complexities. The arrival of a new competitor will dilute the total share for existing teams unless the overall revenue pie continues to expand at a rapid pace. This impending change will likely fuel further discussions among teams about the long-term sustainability and fairness of the financial regulations, especially for those in the lower half of the standings.