Dummy’s guide to team strategy or It’s all about expected cash flows

Is Formula 1 a team sport? The question might sound simple, but the answer is not. Technically, according to the regulatory framework of the FIA it is both team and individual sports. We have World Drivers’ Championship and World Constructors’ Championship. Despite high correlation of the performances in those two, sometimes – and rather often – a huge conflict of interests arises.

At the first glance good performance in WCC appears to be more important from the economic point of view. It gives the team a certain cash inflow in addition to the positive media coverage, which is beneficial for the team’s sponsors and therefore improves their chances to secure further less certain cash inflows. On the other hand, it would be wrong to underestimate an economic impact that a driver’s personality has on sponsorship deals.
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