Maximizing Value in Formula 1: Who's the Real Value-Efficient Champion?
Diego Vallarino, PhD (he/him)
Global AI & Data Strategy Leader | Quantitative Finance Analyst | Risk & Fraud ML-AI Specialist | Ex-Executive at Coface, Scotiabank & Equifax | Board Member | PhD, MSc, MBA | EB1A Green Card Holder
Three passions, F1 (long before Netflix), data, and finance. How to bring them together? writing this post.
If you had the chance to invest in a team, or rather, in a racer, which one would you invest in? Would you follow Ryan Reynolds' "smart" investment strategy in Alpine or would you bet on another racer? Verstappen? Sainz? Norris? Colapinto? or Piastri? My money would probably go to Oscar. Here are the numbers.
In Formula 1, the spotlight often falls on the drivers with the most points or race wins. However, when it comes to evaluating true value—how much each driver is worth per point scored—the story becomes much more nuanced. The balance between team budgets and driver performance can highlight surprising efficiencies that aren’t immediately visible in the points tally.
As of the 2024 season, drivers like Max Verstappen, Lando Norris, and Charles Leclerc are scoring big, but their value per point—when we factor in the massive budgets of teams like Red Bull, Ferrari, and McLaren—paints a different picture of their overall efficiency. Let’s take a deeper look into the top 10 drivers, comparing their points against their team budgets to determine who really generates the most value per dollar.
The Budget Landscape
Formula 1 operates under a budget cap of $135 million per team. While this cap is supposed to level the playing field, teams like Red Bull and Ferrari, which consistently contend for championships, spend their budgets efficiently on driver development, car upgrades, and performance enhancements. However, when we analyze how much value each team extracts from its points, the results become revealing.
For instance, Red Bull’s budget, standing near the cap at approximately $135 million, resulted in 860 points in 2023. Similarly, McLaren, with a lower point tally but a comparable budget, provides insights into how much their drivers contribute to overall efficiency.
Charles Leclerc: Cost Rising with Fewer Points
Charles Leclerc, driving for Ferrari, sits third in the standings with 245 points. Ferrari’s budget is similar to Red Bull’s, but Leclerc’s cost per point is $275,510—higher than both Verstappen and Norris. While Leclerc delivers strong performances, Ferrari’s overall efficiency is slightly hindered due to inconsistencies, pushing Leclerc further down the value spectrum.
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Oscar Piastri: The Rising Star
Oscar Piastri, with 237 points, is another standout performer for McLaren. His cost per point is $284,810, placing him near the top in terms of value generation. McLaren’s resurgence in the second half of the season has been driven by Piastri’s rapid adaptation and strong results, making him one of the most cost-efficient rookies.
Carlos Sainz and Lewis Hamilton: The Consistent Contenders
Both Carlos Sainz (190 points) and Lewis Hamilton (174 points) operate in similar budgetary environments. Ferrari and Mercedes spend heavily on development, but their cost per point is notably higher: Sainz at $355,263 and Hamilton at $387,931. While both drivers have strong results, their efficiency is lower than drivers like Norris and Verstappen.
The Dark Horses: Fernando Alonso and George Russell
Drivers like Fernando Alonso (62 points) and George Russell (155 points) also merit attention. Alonso, despite racing for a smaller-budget team like Aston Martin, has a cost per point of $1,048,387, reflecting the challenges faced by his team. Meanwhile, Russell’s cost of $435,484 per point reflects Mercedes’ struggles to maximize efficiency in 2024. Something that leaves Russell in a very bad position compared to his teammate.
Who's the Real Value Champion?
While Max Verstappen dominates the standings, from a cost-efficiency perspective, it’s a close contest between him and Lando Norris. Both drivers extract immense value from their teams' budgets, with Verstappen leading slightly in terms of cost per point. Oscar Piastri also emerges as one of the most cost-efficient rookies, adding significant value to McLaren. However, drivers like Charles Leclerc, Carlos Sainz, and Lewis Hamilton, despite their talent, face higher costs per point due to their team budgets and fewer points scored.
Franco Colapinto: The Newcomer
Franco Colapinto, as a new entrant in the 2024 Formula 1 season, has earned 4 points across 3 races. His cost per point is significantly higher, around $1,960,227. This reflects his limited number of races and points, but as a rookie, there is potential for improvement. Colapinto’s debut season highlights the steep learning curve in F1, but with more races and points, his cost efficiency could improve significantly.
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