FOTA wants more money for F1 teams – it should get some for circuits too

Posted on | Author Keith Collantine

North America has been priced off the F1 calendar
North America has been priced off the F1 calendar

Having taken on Max Mosley over F1 cost cutting – and come out with some positive changes for the sport – the Formula One Teams’ Association is now aiming to get a bigger share of F1’s revenue. FOTA president Luca di Montezemolo told Gazzetta dello Sport:

I’ve known Ecclestone since 1973, and I think he’s done a great job. But a few years ago we argued: I called him greedy because of the revenues which were distributed 70 percent for him and 30 percent for all the teams. Now we are 50-50. We’ll have to do something more, we’ll see.

Can Montezemolo squeeze more money out of Bernie Ecclestone? If so, they need to make sure it is spent on more than just themselves.

FOTA’s successes

The cost-cutting deal rubber-stamped by the FIA last week featured some key victories for the F1 teams’ agenda over Max Mosley’s. Mosley’s standard engine proposal is out, the standard KERS system he opposed remains on the table, and the refuelling ban he didn’t want is set for 2010.

Montezemolo attributed FOTA’s success to the face the remained united:

What’s certain is that the time to divide and conquer to rule in F1 is over.

Having had some success in making Mosley accept their policies, FOTA is now trying to achieve the one thing in F1 that’s even more difficult: getting money out of Bernie Ecclestone.

The revenue debate

Earlier this month Mosley offered the teams his backing in this cause. In a letter to the teams he wrote:

The FIA would join with FOTA in seeking to persuade Formula One Management to divide the prize money so that up to 12 teams are guaranteed at least $50m (??40m or ??33m) each. This would ensure a full grid with a strong possibility that new teams will enter the championship, filling the two vacant slots as well as any additional vacancies.

Ecclestone didn’t accrue a personal wealth of ??2.4bn (divorce notwithstanding) by saying “yes” when people ask him for money. He is already under pressure to maximise F1’s earning to pay the debts accrued by owners CVC. Giving more money to the teams will only make it harder.

Instead of just asking for more cash for themselves, FOTA may enjoy more success by encouraging Ecclestone towards making price concessions that will benefit him in the long run.

A win-win scenario

One example is race hosting fees. Ecclestone continues to force prices up by as much as 10% per year. Now the majority of the races on the calendar receive some form of local or national government support. That may work in Abu Dhabi and Bahrain, but traditional F1 venues like the United States and Canada have been forced off the calendar because they cannot afford these prices.

The manufacturer-backed teams need these races back on the calendar because – even with the contraction happening at the moment – they are huge and important markets for car sales.

It would be do the manufacturers and the sport a lot of good if the teams cut back their own demands for more cash in exchange for concessions from Ecclestone that he will offer cheaper deals to strategically important F1 races: especially the northern American rounds.

I’m not saying the teams don’t deserve a greater share of F1’s earnings. But I do feel that if they can get him to agree to take less money out of the sport, some of that should be spent on keeping traditional venues in important markets.

It would be an investment in the future of the sport that would reverse the damage being done to its credibility as a global racing brand. In the long term, it would pay off for all parties.

Read more: Are FOTA a force for good in Formula 1?