Formula 1 teams economic situation
- Project name: Formula 1 teams economic situation
- Author: Jan Zaškolný
- Software used: Excel
- Simulation type: Monte Carlo
Problem definition
At the moment there is serious trouble in the Formula 1 business as two out of eleven teams filed for bankruptcy recently during a single month. This might indicate bigger issues coming in future because the minimal number of teams to run the championship is eight (so that there are 16 cars), thus repeating the recent events could be the end of the most famous racing series. According to representatives of other smaller teams they are also on the verge of going bankrupt due to the model of budget distribution in the championship. Contribution of organizer of Championship to the budget of teams depends on results of teams but this is something that ignores system archetype called "success to successful" which is even stronger in this case because sponsors provide finance mostly to previously successful teams. What makes the situation even worse is the fact that costs to enter to championship are so high that entering of a new participants happens very rarely.
Is current model of budget distribution really a threat for Formula 1? What would happen if something gets changed? Is there a way how to save the series?
Method
Situation in Formula 1 is simulated in Excel using Monte Carlo.
Using a model with various parameters that can be set by user makes answering questions from previous chapter possible.
