Renault reveals pre-tax loss due to F1

Renault's Formula One motor racing team made a pre-tax loss of £3.6 million in 2006 despite winning back-to-back world championships. Had they not spent so much money sponsoring their F1 team they would have actually turned a profit.

According to UK press reports, the latest accounts reveal that Renault's turnover in the year to 31 December 2006 increased by 10 per cent to £132 million after increasing its sponsorship, but its costs accelerated.

The team reaped a prize of around £15.7 million for winning the world championship in 2005 and added three new sponsors to its tally the following year. Existing sponsors got increased exposure from the victory and paid bonuses on top of their huge annual fees. Japan Tobacco paid Renault an estimated £33 million for title sponsorship of the team and was followed by oil company Elf which gave it £10 million per year for prominent car logos.

Renault, however, spent £134 million in 2006 with payment of its 526 staff comprising over a quarter of this.

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