F1 Bytes

Following Ferrari’s resurgence in 2017 the 2018 season was always going to be a fascinating one. While a number of intense battles have been raging both within and across teams our attention has inevitably been drawn to the battle at the front – the battle for the World Championship between two four-time World Champions.

So far the stoush between Seb Vettel and Lewis Hamilton has really delivered! The chart below shows the cumulative points haul for both drivers as the season has progressed. As you can see it has been a tight battle with a total of six changes in leadership (including the initial leadership of Vettel).

To put some context around this, if there were no further leadership changes after the mid-season break  2018 would still be in the top 16% of seasons of all time in terms of leadership changes – an epic battle indeed!

As you may recall leadership changes was one of the eight factors we looked at in our Best Season in Formula 1 History analysis. Both 2010 and 1986 topped the charts for this factor with a total of ten leadership changes over the course their respective seasons.  Could 2018 break the record?  We’re looking forward to finding out!

POINTS MARGIN

In the next chart we look at the points margin of the leader over the course of the 2018 season to date.  Lewis Hamilton’s current points margin of 24 points is the largest margin held by either competitor so far this year.

Does this suggest Hamilton has it in the bag and is on his way to a 5^th Championship? Well, maybe…but read on as we investigate Vettel’s chances of turning the tide.

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WHAT CAN HISTORY TELL US?

At the mid-season break last year we developed a model to estimate the likelihood that each driver would go on to win the Championship. We won’t repeat the detailed derivation here but suffice to say we built a model based on historical data allowing us to map the current season standings to each driver’s probability of winning.  The chart below shows the fitted curve against the actual WDC wins from different points margins at mid-season over history.

To clarify what all this means, a driver who is leading by 75 points at midseason (+75 on the x-axis) has historically gone on to win the Championship about 90% of the time.  Alternatively a driver who is trailing the leader by 25 points (-25 on the x-axis) at mid-season has still gone on to win the Championship nearly 20% of the time.

Mapping our current season standings to the historical model and normalising the results so that they add to 100% gives us the probabilities described in the chart below.  We’ve also added the current probabilities implied by Betfair markets to see how punters are reading things compared to our historical model.

As you can see both Betfair and our historical model suggest that it is really only Vettel and Hamilton who are still realistically in the hunt at this stage in the Championship.

WILL LEWIS HAMILTON WIN?

Our model suggests Lewis Hamilton has a 75% chance of taking the title this year versus a Betfair probability of 64%.  This is interesting as last year the punters on Betfair gave the Brit (who was trailing Vettel by 14 points) a higher probability of winning the Championship at mid-season than our historical model.  As we know Lewis went on to win the Championship last year!

WILL SEBASTIAN VETTEL WIN?

The model gives Seb Vettel a 24% chance of winning the 2018 Championship versus a Betfair probability of 35%. So as was the case in 2017 punters are giving the underdog a higher probability of winning than the statistical model (although Hamilton is still favoured for the victory on Betfair).  Whether this reflects a general bias among punters towards backing the underdog is an open question – one we may look at in more detail in the future.

But the plot thickens.  Since 1974, after adjusting for changes in the points system seven drivers have managed to pull off a Championship win after trailing by 24 points or more (ie Hamilton’s current lead over Vettel).  And only one driver has managed this feat on more than two occasions – one Sebastian Vettel.

And it gets better.  Vettel recovered from precisely the same 24 point deficit to take his maiden Championship victory in 2010 (and from 44 points down in 2012 to claim the title!).  There is absolutely no question that Sebastian Vettel has what it takes to fight his way back and challenge for the 2018 title.  Perhaps the punters have it right in nudging the probabilities higher for the Man in Red?

HAMILTON’S CHAMPIONSHIP TO LOSE

So Lewis Hamilton goes into the second half of the season with the highest points lead of either driver so far this season and with a 75% probability of going on to win the title based on historical win rates.  But Sebastian Vettel is by no means beaten yet.  Both our model and the opinions of punters give Vettel a fighting chance to bring the Red Team its first World Drivers Championship since Kimi Raikonnen took the title in 2007.

Let the battle continue…

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A modern F1 Team comprises a large number of supremely talented individuals coming together to collectively produce magic on the racetrack. However it is the drivers alone who are traditionally viewed as the superstars of the sport. And like many globally recognisable sports stars the biggest names in F1 often attract very large pay cheques.

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As we discussed in our 2017 mid-season bang for buck piece F1 is a complex business. Teams, especially the manufacturers, are prepared to pay tens of millions of dollars to leverage off the personal branding of their star drivers. Driver salaries and bonus structures are generally commercial in confidence but a bit of knowledge and logic enables one to extrapolate a ballpark figure for driver salaries.

Website TSM Sportz did just that with the 2018 grid.  A few of their estimates definitely feel over-inflated (Vandoorne, Raikkonen and Stroll particularly) so standard disclaimers apply when judging the veracity of these numbers given the lack of hard evidence.

Branding and marketing aside once the lights go out teams pay their drivers for ultimately one thing – to score Championship Points! So as a Championship Point scoring investment how does each driver compare?

Following 12 out of 21 races so far in the 2018 season we adjust each driver’s annual salary on a pro rata basis ($ x 12 / 21) and then divide by their WDC points to date. The resulting $/point ranking gives us a good rough and ready ranking for driver value for money – their respective bang for buck. Some interesting results ensue…

2018 MID-SEASON BANG FOR BUCK

Rank	Driver	Team	Salary	WDC Points	$ / Point
1	Charles Leclerc	Sauber	$150,000	13	$6,593
2	Pierre Gasly	Toro Rosso	$350,000	26	$7,692
3	Carlos Sainz	Renault	$750,000	30	$14,286
4	Daniel Ricciardo	Red Bull	$6,000,000	118	$29,056
5	Kevin Magnussen	Haas	$2,580,000	45	$32,762
6	Valtteri Bottas	Mercedes	$12,000,000	132	$51,948
7	Max Verstappen	Red Bull	$10,000,000	105	$54,422
8	Marcus Ericsson	Sauber	$500,000	5	$57,143
9	Esteban Ocon	Force India	$3,000,000	29	$59,113
10	Nico Hülkenberg	Renault	$5,500,000	52	$60,440
11	Sergio Pérez	Force India	$5,000,000	30	$95,238
12	Brendon Hartley	Toro Rosso	$350,000	2	$100,000
13	Romain Grosjean	Haas	$4,450,000	21	$121,088
14	Lewis Hamilton	Mercedes	$50,000,000	213	$134,138
15	Kimi Räikkönen	Ferrari	$40,000,000	146	$156,556
16	Sebastian Vettel	Ferrari	$60,000,000	189	$181,406
17	Lance Stroll	Williams	$1,800,000	4	$257,143
18	Fernando Alonso	McLaren	$30,000,000	44	$389,610
19	Stoffel Vandoorne	McLaren	$7,000,000	8	$500,000
20	Sergey Sirotkin	Williams	$150,000	0	–

In 2017 Esteban Ocon had the best $/point ranking and in 2018 a rookie once again takes the crown. The young Monagasque Charles Leclerc tops the tables at the mid-season break though it was extremely close. Another rookie having a sensational season is Pierre Gasly with a $/point score only around $1,000/point behind Leclerc.

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Interestingly in 2017 Ocon’s $/point was only $2,261 – more than three times better value than Leclerc this year. The difference is predominantly due to the relative strength of the driver’s teams this year with Force India having a more difficult 2018 and Sauber significantly improved from last year.

WHAT ELSE DID WE LEARN

One significant change from 2017 is the performance (and value) of the two HAAS drivers. In 2017 Roman Grosjean and Keven Magnussen could not be separated in our head to head results. Their bang for buck score was also extremely close with Grosjean only just beating his teammate on a value for money basis. In 2018  KMag is a clear winner in the head to head and consequently represents nearly four times better $/point value than his teammate.

McLaren have definitely improved their performance from last year with Fernando Alonso securing 44 points to date compared to only 10 at the mid-season break in 2017. Even so the double World Champion and Stoffel Vandoorne represent the two worst drivers in the $/point value rankings (not including the hapless Sergey Sirotkin – the only driver yet to score a point this season). Few would doubt Alonso’s ability to eek out every point possible from the car at his disposal but McLaren are surely looking closely at the business case for retaining his team mate for 2019.

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At Renault even though Hulkenburg is beating Sainz in their head to head battle it is the Spaniard who represents the best value in the $/point rankings. Chilli Sainz will lose his Renault drive in 2019 but surely at number three in the value rankings the Spaniard will still be able to secure a race seat for next year?!

THE SHARP END OF THE GRID

Of the top three teams there is a clear winner for the best value for money. Sitting 5th in the Championship and with a relatively modest pay packet compared to the other Mercedes, Ferrari and Red Bull drivers Daniel Ricciardo stands out as a solid investment.

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The fact that Red Bull Racing weren’t able to keep the Australian for 2019 would tend to indicate that Renault decided to offer Ricciardo a significant increase to his current salary for next year (rumours have the figure at $75M over the two years). Renault’s 2019 lineup will arguably be one of the strongest on the grid and it will be fascinating to see how the Hulk and Honey Badger measure up in their head to head and $/point value during the season. With Nico Hulkenberg having never made a podium (amazingly!) he now has the opportunity to measure himself directly against one of the very best drivers in the sport.

Following Ricciardo’s announcement of his move to Renault the final pieces of the driver lineup puzzle for 2019 should start to fall into place. Will Sainz and Leclerc’s 2018 performance and value secure them seats at Red Bull and Ferrari respectively? What of Fernando Alonso’s future and who will miss out on a 2019 seat when the music stops?…