Drivers expose holes in FIA budget

Posted on | Author Keith Collantine

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

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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