With the release of team earnings last week comes renewed debate over how Formula One is managed – and sadly it’s a familiar story.
Ferrari tops the earnings table, thanks mostly to their $70 million Long Standing Constructor bonus, a special payment that was negotiated with Bernie Ecclestone and is awarded to the team on top of their Constructor’s championship bonus (which is also awarded to Mercedes, Red Bull and McLaren) as a reward for their lengthy service to the sport.
For the rest of the teams, including those already mentioned, there’s a pay-out for their achievement in the sport over the previous few seasons, with a few little sweeteners here and there to keep things interesting.
Force India finished fifth last year but earned only $67 million – less than Ferrari’s ‘please don’t leave F1’ bonus payment. Williams collected less than half of the Scuderia payday, despite finishing just one position behind them in the final standings, a point that isn’t lost on the independent operator.
“I am a firm believer that sports should have equitable platforms to be successful,” Williams deputy team principle Clair Williams told Reuters.
Current agreements between the teams and Formula One Management (FOM) need to be renegotiated before 2020, which provides an opportunity for a correction.
“I imagine we will all start negotiating new terms,” Williams said, “I hope that a revision and a re-distribution is something that’s tabled as part of those discussions.”
“I wouldn’t have an issue if Ferrari got a heritage payment, but not as great as it is.”
You’ve probably noticed that tracks are disappearing just as fast as they are being added. The Turkish Grand Prix, European Grand Prix (Valencia), Korean Grand Prix and Indian Grand Prix have all disappeared from the calendar, as well as the Nurburgring, which shared the duty of hosting the German Grand Prix every second year, alternating with Hockenheim.
All of them, without exception, left the sport due to a ticket-paying public with a diminished appetite for the sport, compounded by the rising cost of hosting a Formula One race. Why is it rising? Because the teams are paid from the revenue raised from the GPs, topped up with revenues from television rights plus whatever Bernie can find beneath the couch cushions.
Following the announcement that British broadcaster Sky will have exclusive rights to show Formula One behind a pay-wall in the UK, the prototype for how we will all eventually be watching races has been established. Moving to pay TV will be enough for a majority of the current Formula One audience to disengage, meaning even fewer Ferrari supporters per dollar spent.
FOM’s extraordinary investment in keeping Ferrari around looks even worse when you consider that Monza – Mecca for those who worship the prancing horse – has been on the brink of collapse for a number of years now.
There are two obvious courses of action: force the Tifosi to pay to watch Formula One while keeping it free for the rest of us, or derail the Ferrari gravy train.
That’s not as destructive as it sounds and a number of scenarios come to mind, all of which seem perfectly reasonable.
Perhaps most drastically you could cut Ferrari’s bonus payments altogether. Alternatively you could simply scrap their Long Standing Team bonus, leaving them with the Constructors’ championship bonus plus whatever they earn from in prizemoney.
Finally, and most importantly, all team bonuses have to be staggered and correlated to performance. That’s to say that if you want a Constructors’ championship bonus you’d better win the championship, if you’re second your bonus is cut by one-third, if you’re third in the championship it’s reduced by another third.
If you’re fourth, you get a set of steak knives.
I’ve got nothing against Ferrari. I’d agree that the sport is better with them than without them. But it’s time to face an inconvenient truth. I’d rather secure the future of Formula One without Ferrari than continue treading water with concrete boots on.
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