F1 teams take to EU competition commission over sport’s governance

Formula One teams Force India and Sauber have filed an official complaint to the European Union’s Competition Commission concerning the motor racing 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 Racing, McLaren and Williams – by F1’s commercial rights-holder and main shareholder CVC Capital Partners.

A statement from Force India reported by the Autosport website read: “Sahara Force India is one of two teams to have registered a complaint with the European Union questioning the governance of Formula One and showing that the system of dividing revenues and determining how Formula One rules are set is both unfair and unlawful.”

Force India and Sauber, along with Lotus, have long argued for a greater share of Formula One’s revenues in a bid to create a more level playing field with their powerfully backed rivals. Autosport said their main argument concerns the way F1’s revenues are distributed, with the five main teams receiving additional monies last year totalling $249m (€220.2m), on top of prize money from the constructors’ championship.

This extra income is defined as premium payments, agreed by the five teams by way of bilateral agreements in 2012, ahead of the expiration of the Concorde Agreement. This agreement divided up the commercial revenues of the sport, including television rights and prize money, along with specifying technical regulations. Last year, Ferrari received a premium payment of $97m, $30m more than it gained for finishing fourth in the constructors’ championship.

In documents handed to the EU, reported by UK newspaper The Times, the complaint made by Force India and Sauber states: “These unfair side payments put the independent teams at a perpetual sporting and economic disadvantage and directly harm the sport. By locking in a permanent advantage for a select few teams, the sport has been gravely undermined.

“The beneficiaries have vastly more to spend on technology, development, research and equipment, creating an ever-wider performance gap and, effectively, pre-determining the outcome of the world championships. These unlawful practices hurt the sport, its participants and the many thousands of people in and around Formula One, and the many millions of European fans.”

A competition commission spokesman told the Reuters news agency today (Tuesday): “We have received a complaint and will assess it.”