Formula One chief executive Bernie Ecclestone has suggested that the revenue distribution system currently utilised by the motor racing series could be replaced by one more akin to that used in football’s English Premier League.
Ecclestone’s Formula One Management (FOM) currently has binding commercial deals with F1 teams running until 2020, but he has said a system to spread revenues more equally could be incorporated after the current contract runs out. Under the current terms, Ferrari, Mercedes, McLaren and Red Bull Racing receive special payments worth tens of millions of dollars based on past success and their prestige within the sport.
“I am going to have a good look at how things work to see if I can come up with something more equal for all the teams,” Ecclestone told UK newspaper The Times today (Monday). “The Premier League has a good way of distributing the prize money, so maybe that could work for us. There will be people who will like it and people who won’t like it, and people who will suffer.”
One team source told the Reuters news agency the comments were to be interpreted as “the first shot of the post-2020 commercial negotiations”. Ferrari is set to receive $20m (€17.7m) more in revenue payments than reigning world champion Mercedes for its performance in the 2015 season, according to figures published by the Autosport website in April.
The information again outlined the financial disparity which exists within the sport – an issue that has led to two of its teams taking to European competition authorities in protest. Ferrari finished second to Mercedes in the constructors’ world championship last season, but Autosport stated the historic Italian marque stands to receive $192m – a 17 per cent increase on 2015.
FOM draws revenue from hosting fees, media rights and other sources such as trackside sponsorship and hospitality. Autosport said the 2015 total rose nine per cent year-on-year to $965m and will be distributed across 10 teams through nine monthly payments from April with a final “check” payment – when definitive revenues have been calculated – early in 2017.
Ferrari is the only team to have competed in Formula One since the championship’s formation in 1950. As a result, it is set to benefit from $105m in historic/constructors’ championship bonuses, as well as $87m in performance payments. By contrast, Mercedes, winners of both constructors’ and drivers’ championships for the past two seasons, will get $171m in total and third-placed Williams $87m.
Red Bull Racing, which finished fourth in 2015, is set to gain $144m, aided by two other significant negotiated payments of $35m and $39m – the latter a constructors’ championship bonus for their four successive titles between 2010 and 2013. McLaren, which endured its worst season in 2015 to finish ninth, will still receive $82m thanks to a $32m constructors' bonus. Meanwhile, eighth-placed Sauber will only receive $54m, while Force India, which achieved a best ever championship finish of fifth, will stand to gain $67m.
Force India and Sauber in September filed an official complaint to the European Union’s Competition Commission concerning the championship’s governance and revenue distribution model. The two teams are battling what they claim is a privileged financial position bestowed upon the sport’s five biggest teams – Ferrari, Mercedes, Red Bull, McLaren and Williams.
The Premier League’s system for distributing revenue sees 50 per cent of UK broadcast revenue split equally between the 20 clubs. Twenty-five per cent of UK broadcast revenue is paid in merit payments based on a team’s finishing position in the table.
Twenty-five per cent of UK broadcast revenue is paid in facility fees each time a club’s matches are broadcast in the UK. All international broadcast revenue, and central commercial revenue, is split equally among the 20 clubs.