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

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?

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

  1. It’s not Bernie, it’s the mountain of debt CVC took on when Bernie sold the rights. Bernie CAUSED the problem, and now he has to keep squeezing money wherever he can to sustain the debt burden and make money for the new owners.

    Don’t get me wrong, I’m no fan of Bernie, we would all have been better off had he sold out 5-6 years ago at a more “reasonable” price and allowed the venues to profit from the sport, as well as the teams and sport ownership.

  2. Robert McKay said on 19th December 2008, 23:25

    FOTA have really noone to blame but themselves.

    They set up the prior organisation – the GPMA – and threatened to go run their own series. And with the leverage they had all they did or all they wanted was a bigger slice of the pie. If they have issues with Bernie and/or the running of the sport they had the opportunity to use that same leverage to effect change there too but in the end money was the real motivator.

    They then committed, or agreed to intend to commit, or wherever we are at this stage of the (complicated) game, knowing that they were signing up to and in essence endorsing the Bernie Ecclestone model and his decisions.

    To come out now and disagree with what Bernie is doing now just seems a bit hypocritical. If they don’t like it they should go off and run their own series the way they want to run it and not continually niggle and moan about how things are. After all they are now united and the time to “divide and conquer” is apparently over.

  3. “After all they are now united and the time to “divide and conquer” is apparently over.”

    I wonder about that Robert. What happens when Bernie approaches Luca and dangles another $125 million in his face to resign with the series, much as how Bernie killed off the GPMA?

    I still don’t trust Luca, but the current financial scenario is so different from anything in the past that I will give Luca the benefit of the doubt…..until he stabs the other teams in their collective backs.

    Bernie paid off Ferrari earlier to get Ferrari to commit to the series in order to sell the rights to CVC and break up the GPMA. Luca now threatens come 2012, when the current agreement expires, the teams may toddle off and form their own series. Reads like deja vous all over again!

  4. Arthur954 said on 5th March 2009, 14:02

    “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.”

    Yes Keith well said. It is crucial that we have great, visually exciting historical tracks.

    More money for the teams and for the tracks, less for CVC. It is in no one´s interest for the teams to split into two series – this would be disastrous, but if ALL the teams ( including Ferrari ) stick together, they might be able to get more money from Bernie. The present arrangement is very unfair for teams AND tracks like you have well pointed out.

  5. Arthur954 said on 5th March 2009, 14:26

    “Luca di Montezemolo, Chairman of FOTA, said: “This is an unprecedented moment in Formula One history. Above all else, for the first time the teams are unified and steadfast – with a clear, collective vision. Thanks to this unity, all the teams ……”

    The first thing that Monty needs to explain is why he gets more money than the other teams. As long as historic teams like Wiliams are struggling he has no right to get more money than the rest

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