‘Teams to blame’ for not getting F1 revenue share

F1 Fanatic round-up

Start, Monaco, 2012In the round-up: Martin Whitmarsh says F1 teams are to blame for not getting more money from Bernie Ecclestone.

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F1 teams ‘are in survival mode’ (BBC)

Martin Whitmarsh: “If the teams aren’t cohesive enough to work together to secure a larger share of [F1's revenues], then they have to blame themselves.”

F1 constructor rules ‘should be eased’ (Autosport)

Cyril Abiteboul: “There is a discussion in Concorde about what exactly is a constructor. Personally, I do believe that it is offering a nice avenue without going into the extreme of complete customer cars.”

HRT cars sold to Spanish auto-breaker (Reuters)

“A spokeswoman for the Italian company said it would be repainted in Pirelli’s black and yellow colours and used as a static ‘show car’ on display in dealerships and at promotional events.”

NBC F1 promo video

New American F1 broadcaster NBC Sports’ promotional video for the 2013 season.

When Ferrari Almost Came to Indy (Indianapolis Motor Speedway)

“Ferrari contacted leading Indy car team Truesports as a potential partner in the venture. In mid-1985, Truesports sent one of its successful March-Cosworth Indy cars to Ferrari, where it was disassembled and inspected.”

Vodafone McLaren Mercedes Achieves Environmental Excellence (McLaren)

“Vodafone McLaren Mercedes is the first motor sport stakeholder in the world to receive the FIA Institute’s Environmental Award for the Achievement of Excellence.”

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Comment of the day

There were loads of really interesting comments in response to yesterday’s article on pay drivers. Here’s one from @Bpacman:

The whole problem of pay drivers can easily be traced back to the ownership model of the sport. There?s no problem with the amounts of money the sport generates ?ǣ the broadcasting contracts, the hosting fees, the ticket revenues etc… ?ǣ the problem is that a massively disproportionate amount of this money doesn?t go to the participants in the sport but is simply syphoned off to pay Bernie and CVC.

I see that Martin Whitmarsh has told the BBC today that seven of the eleven F1 teams are in “survival mode” due to their lack of funds. However, I really do think that the teams need to take a look at themselves and realise just how badly they?ve played their hand over the past few years. The time has been absolutely ripe for the teams to collectively come together and change the terms on which revenue is shared. The short-term duration of each of the last few Concorde Agreements, the recession in the Western world, the exits of Toyota, Honda and BMW, the Ecclestone bribery scandal ?ǣ all should have been exploited mercilessly by the teams to get the deal they want.
@Bpacman

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On this day in F1

Future F1 driver Sebastien Buemi scored a controversial win in GP2 Asia’s first and only visit to Setul in Indonesia five years ago today.

He finished second behind Luca Filippi on the road, but Filippi was disqualified for having his team mate’s tyres fitted to his car. Buemi made his F1 debut for Toro Rosso the following year and 2013 will be his second season as Red Bull’s reserve driver.

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57 comments on ‘Teams to blame’ for not getting F1 revenue share

  1. JCost (@jcost) said on 16th February 2013, 0:13

    The world has changed and it will change again for sure so teams need to adapt. Seems that the pie is not getting any bigger but some folks are eating more than others so finding a way to better divide the pie should be the way to go. I think Bernie can stomach a “pay cut”.

    • Rufus said on 16th February 2013, 6:31

      I think bernie would rather prostitute his own daughters than get a pay cut.

      • Skett (@skett) said on 16th February 2013, 11:40

        I think Bernie probably does!

        • JimmyTheIllustratedBlindSolidSilverBeachStackapopolis III said on 16th February 2013, 16:59

          Interesting last I remembered bernies daughters don’t work for money. You on the other hand….

          • Last I remember they never had to work for money

          • JimmyTheIllustratedBlindSolidSilverBeachStackapopolis III said on 17th February 2013, 12:59

            That’s *exactly* the point. How could they possibly be viewed as prostitues when they have more personal freedom to do what ever they wish exactly when they wish it than at least 8.5 billion other people. I’ll admit bernies daughters are annoying spoilt and sometimes very airheaded but insulting them just for the sake of insulting them and *not even* doing a good job at it just makes your self look silly and i’m pretty sure it’s against keiths comment policy.

      • Kelsier (@kelsier) said on 16th February 2013, 13:40

        I thought they were?

    • The question is, Bernie and CVC are different faces of the same problem.
      I mean: Bernie bought F1 rights for a ridiculous amount of money to his friend (and partner?) Max Mosley, and then sold it for an enormous amount of money becoming (Bernie and Max?) instantaneously one of the richest man (men?) in UK.

      All the money is going out the F1 value chain, is for paying Bernie, directly or indirectly, and CVC is not going to renounce to recover the money they paid to Bernie and the corresponding interests.

  2. Why have Pirelli bought an HRT? They already own a 2010 renault, so the HRT is worse than what they own already.

    If the HRT is just to be used as a showcar, unless it’s been picked up for less than 500 quid I think they’ve been ripped off, an e36 looks better than an HRT ;)

    • Lin1876 (@lin1876) said on 16th February 2013, 1:18

      I think it’s purely for display purposes, so that Pirelli can tow an F1 car around to various events, as opposed to any intentions of running the car. As you said, they have a 2010 Renault for that.

      To be honest, without the engine at gearbox, I can’t imagine the cars sold for terribly much. Perhaps only a few tens of thousands.

    • Gridl0k said on 16th February 2013, 2:07

      The HRT almost passes 2014 regs. The Renault can’t.

    • Prisoner Monkeys (@prisoner-monkeys) said on 16th February 2013, 4:32

      They bought it because it was cheap, and they only intend to use it for show events. Anything else would likely be super-expensive and not worth the price given its intended purpose.

      • They should use it to test. And also why not bring it to a few races and run it on a friday, then they are testing in real time situations rather than just pounding round a lonely track that isnt rubbered in at all

  3. Nick.UK (@) said on 16th February 2013, 1:30

    The NBC add, is that ‘Prophet’ from the Crysis games narrating..? Haha.

  4. matt90 (@matt90) said on 16th February 2013, 2:00

    That is exactly why I criticised the team which left FOTA last year.

  5. clay (@clay) said on 16th February 2013, 2:14

    I think back to 2009 and the proposed breakaway series. Realistically if all the teams work together, as Whitmarsh suggests, but together set up a rival series where the income is evenly distributed and is enough for the ‘slower’ teams to survive without pay drivers, what would the FIA do? I seem to recall that so many of us fans loved the idea of the breakaway series seeing as (at the time) Mad Max and Bernie were being incredibly unreasonable. At the moment Bernie knows that the teams can complain all they want, the fans can complain about pay drivers all we want and nothing is going to change – because where else can the teams or fans go to? Indycar? I like the racing but technically it is just a glorified version of F3, with everyone in the same chassis and only two (I think) engine suppliers. There needs to be a real and viable alternative. Hello rival series…
    New, better tracks (where crowds would actually turn up to watch, unlike some of Bernie’s latest calendar-fillers…), more reasonable costs both for teams and promoters – only once Bernie sees the teams are serious would any real change occur. I love F1 however I think having 26 cars on the grid, as was the plan for 2010, most of which could spring a surprise result given the right conditions (i.e. Seb at Monza ’08) with the best 26 drivers in the world, on the best tracks in the world (Istanbul, Brands Hatch, Laguna Seca, that south american track the Keith loves so much…) and technical rules which don’t have the loyal fanbase complaining so much (I love DRS but so many do not) would be awesome. It is in the hands of the team principals to make this happen.

    • Prisoner Monkeys (@prisoner-monkeys) said on 16th February 2013, 4:19

      You do know that Bernie works with the teams, right? The fans don’t like him, but they have collectively taken this to mean that the teams don’t like him, either.

    • HoHum (@hohum) said on 16th February 2013, 15:10

      @clay, I agree with you, the main problem for the teams is that they would not be in “Formula 1″ anymore and would have to re-negotiate all their sponsorship and TV contracts for ” Formula ?”. There is a good chance that many sponsors and broadcasters would adopt a “wait and see” policy before re-signing, and only a few teams could afford a year without major income. I wish it were otherwise.

  6. Abdurahman (@) said on 16th February 2013, 2:59

    I liked the NBC ad, especially how they show all the US stars in it hehe. Going to be really interesting to see how they do this year. I just hope they don’t try to “dumb” it down to much for people getting into the sport.

    • I Love the Pope said on 16th February 2013, 3:07

      I’ve been watching F1 on Speed over here and have been pleased. I am relatively new to the sport, but I enjoyed Hobbs, Buxton, and Machet. When I want to laugh – Hobbs. When I want technical data – Machet. When I want to hear from a driver – Buxton.

      Those three, if I understand correctly, are now with NBC. No Varsha which is OK.

    • Prisoner Monkeys (@prisoner-monkeys) said on 16th February 2013, 4:35

      On a certain level, they do have to simplify it. Formula 1 is a complex sport, and newcomers can easily get lost in the myriad of rules. And if they can’t follow it, they won’t watch it.

    • andae23 (@andae23) said on 16th February 2013, 9:08

      I really liked that ad too. When I clicked on it, I was more than certain we would see Grosjean’s crash at Spa, but thankfully they sticked with the actual racing!

    • Scalextric (@scalextric) said on 16th February 2013, 21:05

      Australian GP promo up on the NBC site. And some Will Buxton interviews from Vroom. Shame they’re filed under ‘other sports’.

  7. Prisoner Monkeys (@prisoner-monkeys) said on 16th February 2013, 4:29

    There’s no problem with the amounts of money the sport generates – the broadcasting contracts, the hosting fees, the ticket revenues etc… – the problem is that a massively disproportionate amount of this money doesn’t go to the participants in the sport but is simply syphoned off to pay Bernie and CVC.

    I disagree. For some reason, people seem to believe that all of that money finds its way into Bernie’s numbered Swiss bank account. It doesn’t.

    All of the money from broadcasting contracts goes to the teams. That’s where the prize money comes from. Bernie’s comments while discussing the Australian Grand Prix contract make it pretty clear that a decent slice of that money also goes to the teams, to cover their costs. And the revenue from the ticket sales goes to the event promoters, because it is the best and easiest way to make money.

    Bernie and CVC get some of the money from the price of holding a race, and income from sponsorship deals (like Pirelli and Emirates). They are not, as popular belief holds, taking 90% of the money and leaving the rest for everyone else to fight over.

    • Brace (@brace) said on 16th February 2013, 4:34

      The last I checked they sure do take the percentage of TV revenues. And big one too. Not 50% any more, but not 20% or less either. And if there are 10 teams getting money, there’s no way in hell CVC should be getting more then 5%.

    • AdrianMorse (@adrianmorse) said on 16th February 2013, 5:54

      They are not, as popular belief holds, taking 90% of the money and leaving the rest for everyone else to fight over.

      I think the ‘popular belief’ is that CVC is taking around 50%. CVC loaned billons to buy F1, and since then they’ve been taking huge amounts of money out of the sport to finance that loan, and of course see some return on investment.

      I suspect you’re having a field day playing devil’s advocate, but why not give it a rest for once? Why not argue the other side of the argument for a change? The financial struggle of all but the largest teams, the extortionate hosting fees for event promotors, and the fact that, in the space of two years, F1 has almost disappeared from free-to-air in many European markets, is not something I am particularly happy about. In fact, what has Bernie ever done for us?

      • Prisoner Monkeys (@prisoner-monkeys) said on 16th February 2013, 6:01

        Bernie has expanded the calendar to 20 races and made sure Formula 1 has an unprecedented level of coverage worldwide.

        Freeing up money from CVC won’t help the smaller teams, because it means the money owed won’t get paid, putting the sport in jeopardy.

        • AdrianMorse (@adrianmorse) said on 16th February 2013, 6:15

          My last sentence was not entirely serious, so in case you missed the reference:

          Reg: All right, but apart from the sanitation, medicine, education, wine, public order, irrigation, roads, the fresh water system and public health, what have the Romans ever done for us?
          Attendee: Brought peace?
          Reg: Oh, peace – shut up!

          Note that the calendar is down to 19 again, and how many races were there in a season before Bernie took over, 16? Anyway, what I wanted ask, what do you mean by your last sentence? F1 is in trouble if CVC doesn’t pay its dues? Well, yes, but my point would be that I don’t see how the sale of the commercial rights for billions was a good thing to begin with.

        • Ilanin (@ilanin) said on 16th February 2013, 12:25

          The commercial rights holder going into administration would probably not put the sport in jeopardy. The mostly likely outcome would be that the commercial rights to Formula One would find a new buyer – or in the worst case they would devolve onto CVC’s creditors who would likely set up a company to exploit them – and we’d be in pretty much exactly the same situation we are now, since that company would have the same desire as CVC to squeeze as much money out of F1 as they possibly could.

        • HoHum (@hohum) said on 16th February 2013, 16:08

          @prisoner-monkeys, “the money wont get re-paid putting the sport in jeopardy”, and you claim to teach business? CVC would be in jeopardy but FOM as an asset it controls would not be effected , nor would F1 or the teams in any way, other than any new directions the new management of FOM may take.

          • Prisoner Monkeys (@prisoner-monkeys) said on 17th February 2013, 9:43

            FOM as an asset it controls would not be effected , nor would F1 or the teams in any way, other than any new directions the new management of FOM may take

            Uh, yes it would be affected. If Ecclestone couldn’t repay the money, CVC would move to liquidate whatever had been put up as collateral to guarantee the loan. This would put the future of the sport into jeopardy because CVC would take whatever assets were needed to cover the debt, leaving FOM unable to run the sport.

          • HoHum (@hohum) said on 17th February 2013, 14:38

            @prisoner-monkey, You really do not understand the CVC/Fom situation at all, Bernie did not borrow any money from CVC, he sold it to them, he has the money, he will keep the money no matter what, currently he is an employee being paid $5m.pa.
            If CVC default on the payment of the money they borrowed to buy F1 from Bernie, all CVCs assets will be sold F1 is an asset.

        • Brace (@brace) said on 16th February 2013, 19:29

          @prisoner-monkeys

          and made sure Formula 1 has an unprecedented level of coverage worldwide.

          Oh, and let me add to this. It’s unprecedented because it’s impossible to make it worse then it was.
          Every other sport has moved 10 times faster then F1 in terms of coverage quality.

          Bernie can afford to be as bad as possible since there’s no direct competition to compare him with, but the way the coverage of F1 looks at the moment is pathetic for the sport like F1.

          He is as obsolete in his attitudes and philosophy towards every aspect of coverage and broadcasting material as big record companies who still can’t figure out how useless and unadapted they are for the 21st century world.

          We have Bernie to thank to for this below average coverage and features we have today.

          • HoHum (@hohum) said on 16th February 2013, 22:47

            Well said, but rather than incompetence it is a result of Bernies need for immediate gratification, he wants results fast, he is not interested in growing the brand for 20 years hence as he doesn’t expect to be here to enjoy it.

    • mantresx (@mantresx) said on 16th February 2013, 7:31

      You’re right, I doubt teams are able to have a lot more money than what they receive already, but also what would be the point? if everyone gets let’s say 20% more that doesn’t mean the Caterhams will be fighting the Ferraris, or that there won’t be paydrivers and teams about to go bankrupt.
      In my opinion before seeking more money from Bernie they should first hand F1′s revenues more evenly and strictly based on the performances on track in the previous season, not by how many years they’ve been in F1 or how many times they’ve won in the past etc. That way the bigger teams are less likely to dominate for multiple years and the smaller teams can catch up faster.

    • bpacman (@bpacman) said on 16th February 2013, 11:20

      @prisoner-monkeys The amounts due under the TV broadcasting contracts are paid to the group owned by CVC, Ecclestone and other private equity firms. Of all the revenue that flows to this group, 47.5% is then paid on to CVC and the other owners.

      Check out my comment here for more detail: http://www.f1fanatic.co.uk/2013/02/15/f1-pay-driver-debate/comment-page-2/#comment-1173329

      • The other problem is that Ecclestone’s efforts to maximize TV revenue by moving to subscription services has started to shrink the global audience.

        As a large percentage of the teams’ revenue (and particularly the leading teams) is sponsorship based, the fall in audience represents a serious risk to their businesses.

        The number of races is about as high as it’s ever going to get; the amount the Ecclestone can squeeze out of each venue has likely peaked (very few are making profits). The only way to grow the business is to grow the audience, and Ecclestone has lost sight of that.

    • HoHum (@hohum) said on 16th February 2013, 15:25

      @prisoner-monkeys continues, despite all the evidence to the contrary, to promote his idea that F1 owes its existence to the heroic efforts of Bernie E. He should change his pen-name to @Bernies-secret-lovechild.

  8. Bruno (@brunes) said on 16th February 2013, 6:07

    HRT could only be as good as a show car.
    That’s sad

  9. MahavirShah (@mahavirshah) said on 16th February 2013, 6:43

    I find it odd that you’d talk about teams not working together to secure higher revenue shares and yet would not agree to bring costs down.

  10. Julian (@julian) said on 16th February 2013, 6:49

    “Vodafone McLaren Mercedes is the first motor sport stakeholder in the world to receive the FIA Institute’s Environmental Award for the Achievement of Excellence.”

    Pffffft, its no ‘First Annual Montgomery Burns Award for Outstanding Achievement in the Field of Excellence’ but I guess it will do.

    On a (slightly) more serious note, someone at the FIA must be a Simpsons fan, if not, that is a terrible name for an award.

    • Keith Collantine (@keithcollantine) said on 16th February 2013, 8:48

      @julian

      Pffffft, its no ‘First Annual Montgomery Burns Award for Outstanding Achievement in the Field of Excellence’ but I guess it will do.

      That is exactly what I thought when I read it too!

  11. dragoll (@dragoll) said on 16th February 2013, 9:32

    I see that Martin Whitmarsh has told the BBC today that seven of the eleven F1 teams are in “survival mode” due to their lack of funds.
    @Bpacman

    Right now the entire world is reeling from lack of investment, the Greek, Spanish and Italian markets seem to keep the economies of the world in fear. I’m in Australia and have been trying to source sponsorship and considering Australia is supposedly one of the healthiest economies in the world, its like milking a bull, you keep squeezing, nothing comes out, so you work even harder and harder but nothing comes out of it. If 7 teams within F1 is feeling the pinch, then its not because of any internal team issues or how the funds have been split up by the CVC.

    Interestingly, yesterday the Australian Formula Ford Championship management was officially taken over by CAMS, up until yesterday Formula Ford in Australia has always been run by its own committee, and I can tell you that the committee for the Australia Formula Ford Championship is extremely well organised and run and truly passionate about the sport. It was a great shame to hear that Ford withdrew a large chunk of their funding into the fledgling sport.

    A couple of links below:
    http://www.formulaford.com.au/content/news_article.php?ID=256&Front=1
    http://www.cams.com.au/en/Media/News/2013/CAMS_HAS_THE_RIGHT_FORMULA.aspx

    *begin rant*
    IMO (my opinion only), I really do think that the struggling economies of the world should be left to their own devices, and if that means that they default, then they must do that, every other economy around the world is suffering trying to keep the Greek economy afloat, a country that is so corrupt that a mere 30% of workers actually pay tax! Why should we help economies that are clearly doing the wrong things?
    *end of rant*

    • bpacman (@bpacman) said on 16th February 2013, 10:43

      The entire world isn’t reeling from lack of investment. There’s still plenty of money being poured into certain markets – one of which is sports broadcasting markets. The TV deals agreed for major sports rights have generally increased in value in the last few years.

      My whole point is that if the teams were given a bigger slice of those revenues – they wouldn’t have to rely on the sponsorship market where there has been a slow down.

    • HoHum (@hohum) said on 16th February 2013, 15:33

      @dragoll, I don’t know what your budget is now or where you get it from, but do you not think you would be in a better position if that budget doubled, as it could for the F1 teams if they owned the commercial rights collectively .

  12. Something I would REALLY like to see this year is a feature produced by @KeithCollantine is a review of F1 team steering wheels! I want to see the front of at least each steering wheel for each driver on each team, in big-ol’ hi-res photos! Keith, can you make it happen?!

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