Drivers expose holes in FIA budget

Lewis Hamilton's 2009 superlicence will cost him ??218,950 (??191,492)

The statement issued by the Grand Prix Drivers’ Association criticising Max Mosley’s demand for them to pay more money for their superlicences has been derided by some as an unwise move. The thinking being that no-one is going to stick up of for superstars earning millions of dollars complaining about a comparatively small increase in their fees at a time when much of the world is plunging into recession.

But what I found particularly interesting in the drivers’ announcement was what they had to say about the state of the FIA’s finances (emphasis added):

The drivers have offered to explore fair ways in which they can assist the FIA in raising funds to meet the apparent ??1.7m shortfall required to run the federation in 2008 and a further ??3m shortfall that will be required in 2009, according to the figures cited by Mr. Mosley at Monza.

There are several things about the superlicence that don’t make sense, and fixating on the simplistic angle that says “they earn a lot of money therefore they should pay a lot of money” tells us little about what’s really going on.

Last year the FIA hiked up the cost of superlicences dramatically as explained in this post: How much does an F1 driver cost? And why??

The FIA increased the amount of revenue it was raising from superlicenes from ??330,702 to ??1,504,000 – a whopping 454% hike.

This year the basic cost of each drivers’ licence is going up by ??400. They will also have to pay an extra ??100 per point scored. On top of that they are also being charged ??2,720 for insurance. Assuming 20 drivers start the season (i.e. if The Team Formerly Known As Honda finds a buyer) it will increase the amount of money going into the FIA by ??132,400 – nothing like the magnitude of the ??1.2m increase last year.

Two questions

Why are the drivers making so much fuss over this year’s superlicence fee increase instead of last year’s when the sums of money involved are so much smaller?

How did the FIA manage to increase its budget shortfall by ??1.3m from 2008 to 2009 despite charging the drivers an extra ??1.2m for their licences?

As ever, it’s incredibly difficult to come up with reasonable answers to these questions because so much of F1′s finances are shrouded in secrecy. We do not know, for example, what prize money an F1 driver gets for winning a race, which would make it easier to put the ??2,100 per point charge the FIA levies into context.

Here’s a breakdown of how the payment structure has changed over the last three years. You can find a breakdown of what each driver will have to pay on the F1 Fanatic drop.io.

2007 – ??1,725 per driver, plus ??456 per point scored.
2008 – ??10,000 per driver, plus ??2,000 per point scored
2009 – ??10,400 per driver, plus ??2,720 insurance charge, plus ??2,100 per point scored.

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17 comments on Drivers expose holes in FIA budget

  1. Arthur954 said on 8th February 2009, 13:12

    Let Bernie pay for the deficit in FIA´s numbers . He´s got plenty of money
    Really I think there is no other sport in the world that has such a sleazy way of handling money like f1 does.

  2. beneboy said on 8th February 2009, 13:37

    I just don’t get where the FIA are coming from, Footballers don’t have to pay towards the safety facilities at stadiums and neither do any other professional sportsmen so why should F1 drivers ?

    The governing body has a responsibility to ensure the safety of the competitors and they should insist that the commercial income generated by the sport is used to cover any costs it incurs.

    Just because the drivers earn a lot is no reason to start imposing arbitrary fees for super licences or anything else.

  3. Steven Roy said on 8th February 2009, 15:57

    Max is doing his normal jealous pout. He doesn’t like Ron’s success at McLaren so the first opportunity he got he put his boot in. Ron is a pleb and Max’s family is aristocratic so he has that in-built superiority complex and likes to put us plebs in our place. The drivers are also plebs so Max is putting showing them who is boss.

    Max’s logic is always difficult to figure out since it is so warped so what I tend to do is turn the situation on its head. Rather than try to figure out how he arrived at the view that drivers should pay for safety which clearly is insane just extrapolate the situation.

    If the drivers have to pay for safety at races should Max not be making a contribution to office safety? Fire extinguishers, safety committees etc all have to be paid for and Max benefits from them therefore he should contribute. The FIA no doubt has to pay insurance policies to cover Max in the office, at the tracks and during travel so he should make a contribution to those as well. Everyone in the FIA should get a bill to cover safety.

    How many of us think we should pay an employer’s safety costs? So why should the drivers pay for safety that is the responsibility of the FIA.

  4. This has been the most quarrelsome off season for a long time!

  5. The money mystery continues…

  6. HRH Mosley will continue to impose his will and whims on all as long as his reign is allowed to continue. He and his cronies at the FIA are totally corrupt and there needs to be a fundamental reinvention of what they do and how they go about what they do.

    Relative to the shortfall in FIA funding no doubt a large part came from the fact that all FIA delegates had to come to Max’s hearing, take up posh lodgings, meals and other “entertainments” to give Max his vote of confidence last year. You know Max underwrote all of them from FIA funding.

    If the scumbunny had the civility to resign as he should have, there would be no FIA funding shortfall.

    By the way, does anyone know how much licensing costs compare to other series??

  7. By the way, does anyone know how much licensing costs compare to other series??

    Off the top of my head, I’m not even sure most sports have licensing costs for individual entrants.

    For example, I never had to pay a licence for swimming, though I was charged various amounts for gala entry fees (the most I was billed for a gala I attended was £800 for eight days at the Special Olympics in Cardiff). My team has to pay a membership fee, which was passed on to me in increased club charges, but that is a flat fee covering as many members as the club may wish to send.

    Some sports do require licences. The ones I’ve found, and their costs, are:

    Road cycling – can’t find a price
    Hang gliding – can’t find a price
    Clay pigeon shooting – $20AUD in Australia

    • Keith Collantine (@keithcollantine) said on 8th February 2009, 21:58

      According to the drivers:

      The closest Licence Fee in the world is NASCAR in which each driver pays $4,000 per season

      To put that into perspective, based on 20 drivers racing this year, F1 drivers will pay an average of €86,020 each, which is $111,344.

      Do F1 drivers earn 27 times more than NASCAR drivers?

    • patrickl said on 8th February 2009, 23:10

      Off the top of my head, I’m not even sure most sports have licensing costs for individual entrants.

      Oh come on, doesn’t every sport where you enter a competition require licence fees?

      I mean they have to register the players, set up a competition, supply referees and what not. At the very least the administrative costs will have to be paid when you enlist for some competition.

  8. They are probably protesting the fees this year because they didnt find out about the price increase last year until after they had signed for their new licenses. The GPDA tried to talk to Max last year but that got no where so now they are making the issue public and holding back on signing their super licenses for this year.

  9. patrickl said on 8th February 2009, 23:03

    From what I understood they are still complaining about the 2008 hike. They were obviously forced to pay last year before the start of the season, but have been fighting all year to get the fees corrected.

    sought to resolve the issue privately with the FIA throughout the 2008 season

    and they simply want to go back to the 2007 fees after a realistic indexation:

    Therefore, the drivers have offered to pay the 2007 Super Licence fees adjusted upwards by inflation for the 2008 season with a corresponding increase for the 2009 season.

  10. chaostheory said on 9th February 2009, 0:15

    The most … ugly in this whole story is Mosley’s way of thinking: “We spend a fortune on safety and most of it is for the benefit of the drivers” – they’ve spent that fortune a couple of decades too late; after all those deaths in F1 they should increase safety (which they did) and do not charge a cent – not from drivers. The sentence i cited sounds as bad as: thanks to us you wont die on the track – now pay us.
    I don’t think F1 licence should be free, but Mosley’s argumentation of why drivers should pay as much as he wants is completely wrong.

  11. It is interesting that Max has the drivers thinking about Safety Issues, when he has everyone else thinking about Green issues.
    Wouldn’t it be more to the point if the FIA was paying Mercedes or another manufacturer to develop green/hybrid/zero emission FIA official cars and Safety Car? Wouldn’t it be more to the point if he was asking the teams to submit ideas for greener/cleaner motorhomes and lorries?
    I think this is more Max spin, just wanting the money for money’s sake. Notice this is FIA money we are talking about, not FOM money!

  12. staggington said on 9th February 2009, 14:20

    i really think the teams and drivers should go on strike/boycott if it gets any worse. although im sure bernie would try to ‘sue the pants’ off every team if no1 was to show up at Melbourne. It wouldn’t be uncommon for that to happen in sports. off the top of my head i know the NBA went on strike in 1997 or round then which resulted in the teams playing only half the games that season…BUT negotiations did result in their favour.

  13. SuperKarateMonkeyDeathCar said on 9th February 2009, 16:29

    After a couple minutes searching on Google I found that an FIA license to race in IMSA (American Le Mans Series) costs $200 http://www.imsaracing.net/2006/credentials/FIAEntrantsLicense.pdf
    A license for Grand Am costs $225 http://admin.grand-am.com/assets/2009FIAEntrantLicense.pdf
    A license to race in the Sports Car Club of American (SCCA) costs $225 http://www.scca.com/documents/Club%20Forms/form-fia-license.pdf
    I don’t think the FIA raised the costs for licenses for any of these other series. If the FIA was really interested in paying for driver safety, they would have applied a licenses fee hike to every license holder.

  14. Great info SKMDC, just the comparison I was looking for.

    Now if someone could find out what WRC and Touring car drivers pay for their licenses, we’d have a broad comparison to assess.

  15. Alastair said on 25th February 2009, 10:38

    These guys risk their lives and spend all their time travelling and racing, earning the FIA bazillions of dollars. Why should they not earn Top Whack, especially as they have a very short time to do it in?

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