43 replies to this topic

[nosecone]

Hi folks,

 

Some F1 teams are in deep financial crisis which is mainly due to the unfair money distribution. One way of helping the small teams would be to get rid of the privileges for some teams and hand more money to the small teams instead.

 

Ferrari, McLaren and Williams are privileged teams because of their history and succes and get disproportional more money independend of their position in WCC. RB is also one of those teams (for whatever reason... guess it is the recent succes)

 

I know F1 has a big history of solving problems you never knew they existed.

But if F1 starts to fight its real problem which is the unfair money-distribution this may affect the income of your favourtie team. I know there are many Williams,McLaren,Ferrari and RB-fans around. This question is to you. Would you accept a 'pay-cut' for your favourite team?

Edited by nosecone, 11 November 2014 - 09:51.

[scheivlak]

Other: I have no favourite team.

 

Apart from that, the money should be distributed more evenly than now and CVC/Bernie should take less money out of the sport.

[Jon83]

Yeah - I couldn't care how much Ferrari get, I'll support them forever more.

 

Maybe they'll spend their money more wisely, anyway and occasionally develop something decent.

[Force Ten]

Hi folks,

 

Some F1 teams are in deep financial crisis which is mainly due to the unfair money distribution. One way of helping the small teams would be to get rid of the privileges for some teams and hand more money to the small teams instead.

 

Ferrari, McLaren and Williams are privileged teams because of their history and succes and get disproportional more money independend of their position in WCC. RB is also one of those teams (for whatever reason... guess it is the recent succes)

 

I know F1 has a big history of solving problems you never knew they existed.

But if F1 starts to fight its real problem which is the unfair money-distribution this may affect the income of your favourtie team. I know there are many Williams,McLaren,Ferrari and RB-fans around. This question is to you. Would you accept a 'pay-cut' for your favourite team?

Actually it seemed like Ferrari, Williams and Mercedes were the privileged teams. Whilst Ferrari was a bit more privileged than the other privileged teams.

Edited by Force Ten, 11 November 2014 - 12:12.

[nosecone]

Actually it seemed like Ferrari, Williams and Mercedes were the privileged teams. Whilst Ferrari was a bit more privileged than the other privileged teams.

 

Sorry i might be wrong but i thought McLaren and RB are also privileged teams. Force India stated last year that even if they finish in front of McLaren they'd still become less money than McLaren bc McLaren is a privileged team.

 

edit: as for Merc i thought Bernie was unwilling to take the Brawn-championship and the other championships the team won before into account

 

 

Yeah - I couldn't care how much Ferrari get, I'll support them forever more.

 

Maybe they'll spend their money more wisely, anyway and occasionally develop something decent.

 

Problem is that a pay-cut for Ferrari could make them even worse. So i think you should care.

 

On the other hands without help for the small teams we won't have a Formula 1 in 2 years time

Edited by nosecone, 11 November 2014 - 12:25.

[Force Ten]

Sorry i might be wrong but i thought McLaren and RB are also privileged teams. Force India stated last year that even if they finish in front of McLaren they'd still become less money than McLaren bc McLaren is a privileged team.

 

edit: as for Merc i thought Bernie was unwilling to take the Brawn-championship and the other championships the team won before into account

So did I but this thing said otherwise:
http://forums.autosp...2015/?p=6960020

[nosecone]

What's the constructor's championship bonus fund thing? That'd be Ferrari, RB, McLAren, Merc and Williams

[Force Ten]

Seems to be a top three thing, from 2012. Merc and Williams got 30 "historical", the rest got a "top three" thing. Ferrari gets 90 from the top of the pile before anything other is given out.

Edited by Force Ten, 11 November 2014 - 13:50.

[scheivlak]

So did I but this thing said otherwise:
http://forums.autosp...2015/?p=6960020

Which easily shows that Ferrari (90+21.2 m), Red Bull (78.9 m), McLaren (34.6 m), Mercedes (30 m) and Williams (30 m) are the privileged teams.

Edited by scheivlak, 11 November 2014 - 13:50.

[Tombstone]

Ill post it again(!). Probably clearer to have it here for reference.

 

 

The ~$300M that McLaren, Williams, Mercedes, RB and especially Ferrari get should be more equitably distributed. I would allocate half of this to a fund based on how long the team has been in the championship, and the other half put in to the WCC fund.

 

I would also include all teams on the grid, not just the top 10, in the main structure of the payout scheme.

 

Note, it is unclear whether McLaren, Williams, Mercedes, & Red Bull get this money every year. Ferrari certainly do.

Edited by Tombstone, 11 November 2014 - 13:49.

[Jon83]

Sorry i might be wrong but i thought McLaren and RB are also privileged teams. Force India stated last year that even if they finish in front of McLaren they'd still become less money than McLaren bc McLaren is a privileged team.

 

edit: as for Merc i thought Bernie was unwilling to take the Brawn-championship and the other championships the team won before into account

 

 

 

Problem is that a pay-cut for Ferrari could make them even worse. So i think you should care.

 

On the other hands without help for the small teams we won't have a Formula 1 in 2 years time

 

I'll support them anyway.

 

I'm not going to get upset if any team makes less money, especially if it leads to a fairer field.
 

[Force Ten]

Ill post it again(!). Probably clearer to have it here for reference.

 

 

The ~$300M that McLaren, Williams, Mercedes, RB and especially Ferrari get should be more equitably distributed. I would allocate half of this to a fund based on how long the team has been in the championship, and the other half put in to the WCC fund.

 

I would also include all teams on the grid, not just the top 10, in the main structure of the payout scheme.

 

Note, it is unclear whether McLaren, Williams, Mercedes, & Red Bull get this money every year. Ferrari certainly do.

 

Seems to me Williams and Merc got a historical, Red Bull, Ferrari and McLaren got separate WCC top three bonuses.

[Force Ten]

Regarding the original it's complicated. I am pretty sure Williams would be dead already if not for their historical status as that's what kept them going in their lean years after BMW.

[scheivlak]

Seems to me Williams and Merc got a historical, Red Bull, Ferrari and McLaren got separate WCC top three bonuses.

I thought at least McLaren were also in the "historical payment" club so they would have got that $30 m as well if they hadn't already qualified for the $34.6 million.

[BobbyRicky]

Prize money at each GP wouldn't be so bad i think.

Add in a bonus to the team that wins the WCC and WDC aswell.

[amppatel]

I think everyone should get the same split of the money - not depending on WCC standings.

 

The higher up the WCC you are:  the more TV coverage you get (resulting in more money from sponsors) and the more press coverage you get (again more sponsor money). I think this is enough reward so there is no need to add extra money from the FOM.

[pdac]

The vast majority of the money should be distributed evenly between the competitors. There should be a very small prize fund to reward the WCC order and a nice trophy for the winner. If you're going to make it about winning and the order, then it ought to be paid on a race-by-race basis and competitors should not have to enter all races.

[redreni]

Ill post it again(!). Probably clearer to have it here for reference.

 

 

The ~$300M that McLaren, Williams, Mercedes, RB and especially Ferrari get should be more equitably distributed. I would allocate half of this to a fund based on how long the team has been in the championship, and the other half put in to the WCC fund.

 

I would also include all teams on the grid, not just the top 10, in the main structure of the payout scheme.

 

Note, it is unclear whether McLaren, Williams, Mercedes, & Red Bull get this money every year. Ferrari certainly do.

 

First I think the main problem with the distribution depicted, to the extent it's accurate, is the utterly obscene 36.1% that goes to Delta Topco. Amongst people who are prepared to acknowlege that major problem, we can obviously discuss the matter of the top teams' extra income.

 

The first point to note is that, leaving aside Ferrari's share for the moment, the teams' share is fairly equitable, with half the money being distributed equally and half according to a reasonably equitable performance formula (with the worst performer getting more than a fifth of what the team that's won the WCC four times on the bounce gets under column 2. I don't see too much of a problem with that, except that I agree that column 1 and 2 money has to go to every constructor otherwise the teams at the back will never be viable and will never improve unless somebody is willing to bankroll them to a very serious degree over a number of years until they can break into the top 10, in which case whover drops out will be in trouble. That reform would allow column 3 to be abolished and the money to go to the teams.

 

The second point, which is crucial to note, is that in the days of a strong FOTA, there was a lot of talk of the main split (50:50 between the teams and FOG) being renegotiated substantially in the teams' favour, failing which they would walk away and set up a pirate series. That never happened because the big teams were bought off with the introduction of the "historical payments". Personally I don't find it credible that this money only goes to Mercedes and Williams, with Mclaren and, more particularly, Red Bull getting nothing. Red Bull was first to break ranks, and if Horner did FOTA in and then positioned himself as a key Ecclestone ally in return for none of the FOG money, surely Mateschitz would at the very least have sacked him?

 

But regardless of how that money is split and whether it's fair, we must remember that this money comes from FOG's share of the revenues. The agreed split between the teams and FOG is 50:50, so no team has any entitlement to any of that money. If they have negotiated a payment, that's a commercial arrangement comparable to a sponsorship agreement. Suppose Castrol agreed sponsorship deals with both Mercedes and Sauber. Would it be a problem if they paid Mercedes more than Sauber? The money that goes to the teams and is distributed according to columns 1 and 2 should be divvied up fairly, according to an equal split, sporting performance or some combination of the two. It is. What FOG wants to do with its share is entirely up to them, so I don't think the same expectations apply.

 

Bearing that in mind, I have no problem with the historical payments shown in the flowchart, I have no problem with the half of Ferrari's payment that comes from FOG's side, and I may or may not have a problem with whatever deal RBR has done because it appears to be a secret and it would depend how much it is and where the money comes from. I do think the 2.5% of the teams' share that goes to Ferrari should cease, and should be distributed according to columns 1 & 2. On the figures quoted that would mean Ferrari would lose $45m of their special payment, which would be added to the pot for columns 1 & 2. $4.5m of that would go straight back to Ferrari on their column 1 share, and another $6m or so would flow to them in extra performance payments. So that would leave them around $34m down on what they currently get (less if they started to perform to a reasonable level on track). In that case, Ferrari's share of the FOG money would have to be looked at again, because they currently get less than Mercedes and Williams in recognition of the current special arrangement.

 

Adjusting for that, and recognising that any FOG money flowing to teams is done for commercial reasons, I wouldn't be surprised if Ferrari were able to negotiate terms that would get them back to a broadly similar level of income to what they currently get, as a share of the total pie.

Edited by redreni, 11 November 2014 - 15:18.

[Nathan]

For you people that think it is unfair CVC & the shareholders get so much, let's remember how many opportunities the teams had prior to purchase that investment.  They all shrugged their shoulders.  They couldn't produce a break away series.

 

If it wasn't for FOM being 'greedy' and sucking out what it can from governments and TV companies that pot wouldn't be nearly as big as it is.  I don't understand why Ferrari should get the same from FOM as Caterham when the revenue and value Ferrari adds is many times greater.

 

Why is the sport so expensive?  20 years ago did Jordan and Sauber rely on prize money to fund half their efforts?

How is it one billionaire can buy a **** team and win 8 world championships within 9 years, and other billionaires buy teams and still drive around in the middle of the field?


 

[JHSingo]

I don't really have a favourite team, but I view no team as greater than the sport, not even Ferrari.

 

It's ridiculous that some teams get far more money than others, when it isn't even performance related. History or not, it's stupid that Ferrari gets so much more money than a Force India, when, this year at least, they're not exactly blowing them away. And I bet that if they got just as much money, they'd do just a good job, if not even better. That applies to Sauber and Lotus also. In many ways, I respect those teams more than Ferrari, Mercedes or Red Bull. Because they exist only to race, not to make road cars or energy drinks. They are the backbone of the sport, essentially, and should be being protected.

 

I look at how my other sport, NHL, is run. They've done a good job of distributing money as evenly as possible, and prevent it from just being a spending war, and the end result is a super competitive league. No team in the NHL has won the Stanley Cup in two consecutive seasons since 1998. That's how it should be in F1. But even this year, with this big rules change, it's still the same teams at the front. Red Bull and Mercedes have switched places at the front, and Williams and Lotus have switched around, but that's it. Just because of the way the money is distributed, we don't get to see many giant killing performances or upsets any more, and I find that rather disappointing.

Edited by JHSingo, 11 November 2014 - 15:16.

[Tombstone]

First I think the main problem with the distribution depicted, to the extent it's accurate, is the utterly obscene 36.1% that goes to Delta Topco. Amongst people who are prepared to acknowlege that major problem, we can obviously discuss the matter of the top teams' extra income.

 

The first point to note is that, leaving aside Ferrari's share for the moment, the teams' share is fairly equitable, with half the money being distributed equally and half according to a reasonably equitable performance formula (with the worst performer getting more than a fifth of what the team that's won the WCC four times on the bounce gets under column 2. I don't see too much of a problem with that, except that I agree that column 1 and 2 money has to go to every constructor otherwise the teams at the back will never be viable and will never improve unless somebody is willing to bankroll them to a very serious degree over a number of years until they can break into the top 10, in which case whover drops out will be in trouble. That reform would allow column 3 to be abolished and the money to go to the teams.

 

The second point, which is crucial to note, is that in the days of a strong FOTA, there was a lot of talk of the main split (50:50 between the teams and FOG) being renegotiated substantially in the teams' favour, failing which they would walk away and set up a pirate series. That never happened because the big teams were bought off with the introduction of the "historical payments". Personally I don't find it credible that this money only goes to Mercedes and Williams, with Mclaren and, more particularly, Red Bull getting nothing. Red Bull was first to break ranks, and if Horner did FOTA in and then positioned himself as a key Ecclestone ally in return for none of the FOG money, surely Mateschitz would at the very least have sacked him?

 

But regardless of how that money is split and whether it's fair, we must remember that this money comes from FOG's share of the revenues. The agreed split between the teams and FOG is 50:50, so no team has any entitlement to any of that money. If they have negotiated a payment, that's a commercial arrangement comparable to a sponsorship agreement. Suppose Castrol agreed sponsorship deals with both Mercedes and Sauber. Would it be a problem if they paid Mercedes more than Sauber? The money that goes to the teams and is distributed according to columns 1 and 2 should be divvied up fairly, according to an equal split, sporting performance or some combination of the two. It is. What FOG wants to do with its share is entirely up to them, so I don't think the same expectations apply.

 

Bearing that in mind, I have no problem with the historical payments shown in the flowchart, I have no problem with the half of Ferrari's payment that comes from FOG's side, and I may or may not have a problem with whatever deal RBR has done because it appears to be a secret and it would depend how much it is and where the money comes from. I do think the 2.5% of the teams' share that goes to Ferrari should cease, and should be distributed according to columns 1 & 2. On the figures quoted that would mean Ferrari would lose $45m of their special payment, which would be added to the pot for columns 1 & 2. $4.5m of that would go straight back to Ferrari on their column 1 share, and another $6m or so would flow to them in extra performance payments. So that would leave them around $34m down on what they currently get (less if they started to perform to a reasonable level on track). In that case, Ferrari's share of the FOG money would have to be looked at again, because they currently get less than Mercedes and Williams in recognition of the current special arrangement.

 

Adjusting for that, and recognising that any FOG money flowing to teams is done for commercial reasons, I wouldn't be surprised if Ferrari were able to negotiate terms that would get them back to a broadly similar level of income to what they currently get, as a share of the total pie.

 

To be honest I'm not that interested in the detail. The point is that there are several ways in which the money could be distributed which are fairer than that in the diagram.

[redreni]

I don't really have a favourite team, but I view no team as greater than the sport, not even Ferrari.

 

It's ridiculous that some teams get far more money than others, when it isn't even performance related. History or not, it's stupid that Ferrari gets so much more money than a Force India, when, this year at least, they're not exactly blowing them away. And I bet that if they got just as much money, they'd do just a good job, if not even better. That applies to Sauber and Lotus also. In many ways, I respect those teams more than Ferrari, Mercedes or Red Bull. Because they exist only to race, not to make road cars or energy drinks. They are the backbone of the sport, essentially, and should be being protected.

 

I look at how my other sport, NHL, is run. They've done a good job of distributing money as evenly as possible, and prevent it from just being a spending war, and the end result is a super competitive league. No team in the NHL has won the Stanley Cup in two consecutive seasons since 1998. That's how it should be in F1. But even this year, with this big rules change, it's still the same teams at the front. Red Bull and Mercedes have switched places at the front, and Williams and Lotus have switched around, but that's it. Just because of the way the money is distributed, we don't get to see many giant killing performances or upsets any more, and I find that rather disappointing.

 

Force India are doing a worse job than Ferrari despite deriving an enormous advantage from a power unit that they didn't design and which has been sold to them at a loss by a manufacturer. Tweaking the FOM money won't alter the very different capacities of those two outfits, or their relative value.

 

And if we're seriously trying to work out what's the nearest thing to a "backbone of the sport", we shouldn't look to those manufacturers that have a five or ten year programme and then disappear, nor to the privateer chassis constructors that couldn't run without an engine supply deal from a manufacturer. The "backbone of the sport", surely, would have to be the only chassis constructor and engine manufacturer that's been there since the beginning, wouldn't it? If not them, then who?

[JHSingo]

Force India are doing a worse job than Ferrari despite deriving an enormous advantage from a power unit that they didn't design and which has been sold to them at a loss by a manufacturer. Tweaking the FOM money won't alter the very different capacities of those two outfits, or their relative value.

 

And if we're seriously trying to work out what's the nearest thing to a "backbone of the sport", we shouldn't look to those manufacturers that have a five or ten year programme and then disappear, nor to the privateer chassis constructors that couldn't run without an engine supply deal from a manufacturer. The "backbone of the sport", surely, would have to be the only chassis constructor and engine manufacturer that's been there since the beginning, wouldn't it? If not them, then who?

 

I'd turn it around. I'd say Force India are doing a remarkable job to be only 83 points behind Ferrari in the WCC, when Ferrari gets a little over $128m more than them, according to that graphic posted above, and my (admittedly poor) maths. In terms of value for money, they're punching well above their weight in that regard, that's my point.

 

I disagree on your second point. Ferrari has threatened to quit so many times in the past, that I personally couldn't really care if they did. The Force Indias, Saubers and Lotuses of this world will be in F1 come hell or high water, and exist purely to race. Does Ferrari? They exist to sell road cars, key rings, unnecessarily expensive aftershave. Ferrari's business model isn't all about their F1 team, and hasn't been for many, many years. But I suspect we may be getting away from the topic of this thread just a little....

Edited by JHSingo, 11 November 2014 - 16:37.

[redreni]

[snip]

But I suspect we may be getting away from the topic of this thread just a little....

 

I'm not so sure about that. This question comes around in different forms every so often, but it's usually the Ferrari issue that irks people the most. I'm more than happy to address it.

 

If we could get rid of CVC and have an FIA-owned and controlled entity holding the commercial rights, nearly 100% of the commercial rights holder's operatng profits could go to the teams and the rest could go to the FIA to spend on other forms of motorsport, on motorsport safety and on road safety. If that happened, I would expect the FIA to distribute the commercial revenues according to fair and transparent criteria, not disimilar to the distribution of column 1 & 2 money, and in line with other sports, I would not expect anyone to get a special deal because of who they are or how important their brand is to the sport.

 

But as long as we live in a world where CVC takes half the revenues, keeps most of its own share and pays the rest in bribes to the big teams to prevent them from withdrawing or forming a breakaway series, then it seems obvious to me that something is fundamentally wrong, and complaining about one team getting a bigger bribe than the others seems to me to be missing the point. That's why I voted that I'd be willing to see my favourite team get a pay cut so that (a) we don't have one team dipping into the pot before the column 1 and 2 calculations are even done, because that's unfair and (2) to pay for decent revenues for the backmarkers so that we get healthy and competitve grids, which benefits everyone. But I don't think they should get a major haircut under the current structure because, under the model where the commercial rights holder retains 50% of the profits and then uses his share to pay bribes, it seems obvious to me that Ferrari is always going to get one of the bigger bribes, for the same reason that it's going to make more than most other teams from carrying sponsors' logos.

Edited by redreni, 11 November 2014 - 19:03.

[Tsarwash]

Force India are doing a worse job than Ferrari despite deriving an enormous advantage from a power unit that they didn't design and which has been sold to them at a loss by a manufacturer. Tweaking the FOM money won't alter the very different capacities of those two outfits, or their relative value.

 

And if we're seriously trying to work out what's the nearest thing to a "backbone of the sport", we shouldn't look to those manufacturers that have a five or ten year programme and then disappear, nor to the privateer chassis constructors that couldn't run without an engine supply deal from a manufacturer. The "backbone of the sport", surely, would have to be the only chassis constructor and engine manufacturer that's been there since the beginning, wouldn't it? If not them, then who?

Williams and McLaren are as much of the backbone of the sport as Ferrari. It's not exactly their fault that they entered the sport 15 years after Ferrari. 

 

I think that we are in danger of only having these three teams left in five years time. Both Red Bull and Mercedes have said they'll leave under certain conditions. Mind you Ferrari used to say this every year for a while.

[Nathan]

"The Force Indias, Saubers and Lotuses of this world will be in F1 come hell or high water, and exist purely to race. Does Ferrari? They exist to sell road cars, key rings, unnecessarily expensive aftershave. Ferrari's business model isn't all about their F1 team, and hasn't been for many, many years. But I suspect we may be getting away from the topic of this thread just a little...."

 

What on earth....

 

Force India and Lotus exist for as long as their owners want to write the cheque.  They exist to promote their owners businesses and play motorsports boss.  They are not like Sauber or Williams where the teams are the owners primary business concern .  Vijay hasn't even been around for one-third the length of time Peter Sauber, has a questionable financial future back home, but you can say that team will be around hell or high water? Hopefully, provided the teams next change of ownership happens before it's too late.   Lotus is owned by an outfit not much different to CVC Partners...

 

Lotus F1 Team -> A division of Genii Capital
Genii Business Exchange -> A division of Genii Capital created to transform Formula One exposure into business opportunities.
 

"Genii Capital is an investment management and financial advisory firm, operating within the Finance division of The Genii Group. 

 Genii Capital serves the needs of investors, international groups and governments worldwide. "

 

hmmm.....

 

Ferrari's business model isn't about their F1 team?? Why are the grand stands 1/4 red? Why are their road cars littered with Formula-1 references? What made the brand cool enough to sell toilet water and key chains for inflated prices?   Lamborghini doesn't sell near as many of those gimic things, and their cars look cooler and go faster. So what gives??

Edited by Nathan, 11 November 2014 - 19:31.

[Szoelloe]

NO

[redreni]

Williams and McLaren are as much of the backbone of the sport as Ferrari. It's not exactly their fault that they entered the sport 15 years after Ferrari. 

 

I think that we are in danger of only having these three teams left in five years time. Both Red Bull and Mercedes have said they'll leave under certain conditions. Mind you Ferrari used to say this every year for a while.

 

Well, the "backbone of the sport" issue possibly is taking us away from the topic. But if money is being directed at keeping the most important entrants in F1 and we're discussing the rights and wrongs of that, whilst Williams and Mclaren are definitely two of the last outfits I'd want to see go, one of the greatest potential threats to F1 in the event of manufacturer withdrawals is lack of engines, and a team that makes its own engines and supplies others is more important than a team that doesn't. Ferrari is the only constructor to combine the virtues of making engines and having shown a long term commitment to the Championship. No other existing championship in the world has had that kind of consistent loyalty from a marque or team. I am not surprised that the commercial rights holder is keen to retain Ferrari's involvement.

[redreni]

"The Force Indias, Saubers and Lotuses of this world will be in F1 come hell or high water, and exist purely to race. Does Ferrari? They exist to sell road cars, key rings, unnecessarily expensive aftershave. Ferrari's business model isn't all about their F1 team, and hasn't been for many, many years. But I suspect we may be getting away from the topic of this thread just a little...."

 

What on earth....

 

Force India and Lotus exist for as long as their owners want to write the cheque.  They exist to promote their owners businesses and play motorsports boss.  They are not like Sauber or Williams where the teams are the owners primary business concern .  Vijay hasn't even been around for one-third the length of time Peter Sauber, has a questionable financial future back home, but you can say that team will be around hell or high water? Hopefully, provided the teams next change of ownership happens before it's too late.   Lotus is owned by an outfit not much different to CVC Partners...

 

Lotus F1 Team -> A division of Genii Capital
Genii Business Exchange -> A division of Genii Capital created to transform Formula One exposure into business opportunities.
 

"Genii Capital is an investment management and financial advisory firm, operating within the Finance division of The Genii Group. 

 Genii Capital serves the needs of investors, international groups and governments worldwide. "

 

hmmm.....

 

Ferrari's business model isn't about their F1 team?? Why are the grand stands 1/4 red? Why are their road cars littered with Formula-1 references? What made the brand cool enough to sell toilet water and key chains for inflated prices?   Lamborghini doesn't sell near as many of those gimic things, and their cars look cooler and go faster. So what gives??

 

And your post started so well....

[johnmhinds]

Well, the "backbone of the sport" issue possibly is taking us away from the topic. But if money is being directed at keeping the most important entrants in F1 and we're discussing the rights and wrongs of that, whilst Williams and Mclaren are definitely two of the last outfits I'd want to see go, one of the greatest potential threats to F1 in the event of manufacturer withdrawals is lack of engines, and a team that makes its own engines and supplies others is more important than a team that doesn't. Ferrari is the only constructor to combine the virtues of making engines and having shown a long term commitment to the Championship. No other existing championship in the world has had that kind of consistent loyalty from a marque or team. I am not surprised that the commercial rights holder is keen to retain Ferrari's involvement.

 

What happens when one of the biggest reasons for those engine manufacturers pulling out is the teams not being able to pay their bills?

 

If anything it is in the interests of companies like Mercedes, Renault and Ferrari to give the lower teams a little more of the money because a large chunk of it will all come back to them when those lower teams can afford to buy their engines and gearboxes.

 

I can't see how the Ferrari and Renault shareholders would be happy with the Marussia and Caterham teams going under and not paying them for their expensive engines that they've used, and the additional loss of future profits from them not being in the sport anymore to buy those engines.

Edited by johnmhinds, 11 November 2014 - 20:00.

[KingTiger]

The money should be split evenly between the teams and engine manufacturers. 

[Szoelloe]

The money should be split evenly between the teams and engine manufacturers. 

 

No, it should not. You don't just throw good money in the trash bin like that.

[redreni]

What happens when one of the biggest reasons for those engine manufacturers pulling out is the teams not being able to pay their bills?

 

If anything it is in the interests of companies like Mercedes, Renault and Ferrari to give the lower teams a little more of the money because a large chunk of it will all come back to them when those lower teams can afford to buy their engines and gearboxes.

 

I can't see how the Ferrari and Renault shareholders would be happy with the Marussia and Caterham teams going under and not paying them for their expensive engines that they've used, and the additional loss of future profits from them not being in the sport anymore to buy those engines.

 

I agree, and I refer you to my previous answer - if I had my way, every team would get column 1 & 2 money. It's just healthier for the sport to have full grids.

 

That said, I'm not sure how profitable PU supply deals are for the manufacturers. When backmarkers go bust, it allows the PU manufacturer to downscale production, which probably saves them as much as they lose in revenue from the smaller outfits. And the fewer teams there are, the bigger the PU manufacturer's slice of the pie...

[Fastcake]

Well, the "backbone of the sport" issue possibly is taking us away from the topic. But if money is being directed at keeping the most important entrants in F1 and we're discussing the rights and wrongs of that, whilst Williams and Mclaren are definitely two of the last outfits I'd want to see go, one of the greatest potential threats to F1 in the event of manufacturer withdrawals is lack of engines, and a team that makes its own engines and supplies others is more important than a team that doesn't. Ferrari is the only constructor to combine the virtues of making engines and having shown a long term commitment to the Championship. No other existing championship in the world has had that kind of consistent loyalty from a marque or team. I am not surprised that the commercial rights holder is keen to retain Ferrari's involvement.

 

You'd have an argument if the money went to Ferrari to keep them in the sport, but they're only getting it because Bernie divides the teams and pays off Ferrari so that he can continue to cream off hundreds of millions for himself and CVC.

[Risil]

Yes. Mind you, none of them send me any cheques.

[johnmhinds]

I agree, and I refer you to my previous answer - if I had my way, every team would get column 1 & 2 money. It's just healthier for the sport to have full grids.

 

That said, I'm not sure how profitable PU supply deals are for the manufacturers. When backmarkers go bust, it allows the PU manufacturer to downscale production, which probably saves them as much as they lose in revenue from the smaller outfits. And the fewer teams there are, the bigger the PU manufacturer's slice of the pie...

 

The engine manufacturers aren't going to be losing money on these engine deals over the 5+ year lifetime of the current engine rules.

 

Sure they might make a bit of a loss this year due to the up front development cost but they're going to be raking in the profits in the future, why else would Mercedes sign a new deal with Lotus to keep their 4 teams supply limit full.

 

As you said it is in the interests of everyone in the sport for there to be as many healthy teams as possible so that the whole sport grows and becomes more profitable, so it's stupid for Mercedes, Red Bull(Renault) and Ferrari to be fighting so much about the development of these expensive engines and making it worse for everyone in the sport.

[redreni]

You'd have an argument if the money went to Ferrari to keep them in the sport, but they're only getting it because Bernie divides the teams and pays off Ferrari so that he can continue to cream off hundreds of millions for himself and CVC.

 

That's true. The teams went into a discussion as FOTA wanting to change the fundamental problem, namely the initial 50:50 split, and their bargaining position was that if the split wasn't altered significantly in their favour, FOTA would walk away from F1 and set up on its own. They went away from that negotiation with FOTA disbanded, the split unchanged, the top teams receiving extra payments taken from FOG's half of the pie (and being entrusted with rulemaking powers, which they have misused extremely badly right from the word go), and the rest of the teams getting nothing, with consequences for their viability which are now playing out. This is nothing unique to Ferrari.

 

I'd be fully in favour of getting rid of the leeches, because then all the teams' revenues would increase, including Ferrari's. Ferrari's revenues would increase in that case even if their special payment and the historical payments were to be abolished. That would be great.

 

Back in the real world, though, I think a more realistic prospect is to get the distribution of the teams' share regularised by abolishing the special payment to Ferrari and by splitting the column 1 and 2 money between all the teams rather than just the top 10. I don't think the phenonmenon of teams being treated differently by Bernie with respect to payments taken from FOG's share of the revenues is ever likely to change while CVC continue to hold the commercial rights.

[Nathan]

So is it possible for Scuderia Ferrari to receive $286.4 million from FOM? (Constructor Champ, Col.1, top Col.2 performer and The Payment.

 

Bernie pretty much pays Ferrari to race

 

 

 

I have to ask again, why should a team the produces a car two seconds per lap slower, is almost always placed within the last six positions, produces little revenue for the sport and is unattractive to sponsors deserve to receive the same amount of money from F1 Revenues as one of the teams that are the star of the show? That create the media buzz, that establish meaningful fan bases, that are proven "F1 racing companies" (like Sauber..) that collect trophies, that become champs etc..
 

 

I think these team owners should have to put in what is required to earn big FOM bucks (how isn't Sauber historical?). Why should "the sport" have to fund some billionaires grand venture into F1?  Make them earn it.  A certain Austrian managed on his dime and now its dividends time.  Other billionaires to varying degrees.  Let us remember of the 5 teams broke or near broke, 4 are/were owned by people of very high net worth...
 

I still say at the end of the day the problem is the cost.  To become competitive in F1 you need to be a billionaire person or company to fund the venture.  If the cost problem was fixed we'd be sitting here talking about becoming F1 team owners because of the fat profits even the 9th placed team earns.

 

Frankly I'm all for Ferrari, McLaren, Williams and Sauber receiving a 'pension' to ensure they remain in the sport.  The teams that have helped build Formula-1 (not the guys that have owned teams the last 4, 7 or 8 years) should get to wet their beak a little now that the dividends are rolling in big time.

Edited by Nathan, 11 November 2014 - 23:59.

[bourbon]

Not a fan of teams, but I agree the teams sustaining the sport should get extra.  Not just those that have done it for a long while, but also a team like Red Bull that has diverted billions to the sport over time.  In the balance, with wins, it is not all give and no take, but to keep a money interest you give incentives for them to stay (i.e., Hollywood giving huge tax breaks to the movie industry to stop the mass move toward Canada location for filming.) Otherwise you will be stuck with no growth among the sustaining teams, which is necessary over the long term (both in keeping those teams in and motivating new interest.  

[johnmhinds]

So is it possible for Scuderia Ferrari to receive $286.4 million from FOM? (Constructor Champ, Col.1, top Col.2 performer and The Payment.

 

Bernie pretty much pays Ferrari to race

 

 

 

I have to ask again, why should a team the produces a car two seconds per lap slower, is almost always placed within the last six positions, produces little revenue for the sport and is unattractive to sponsors deserve to receive the same amount of money from F1 Revenues as one of the teams that are the star of the show? That create the media buzz, that establish meaningful fan bases, that are proven "F1 racing companies" (like Sauber..) that collect trophies, that become champs etc..
 

 

I think these team owners should have to put in what is required to earn big FOM bucks (how isn't Sauber historical?). Why should "the sport" have to fund some billionaires grand venture into F1?  Make them earn it.  A certain Austrian managed on his dime and now its dividends time.  Other billionaires to varying degrees.  Let us remember of the 5 teams broke or near broke, 4 are/were owned by people of very high net worth...
 

I still say at the end of the day the problem is the cost.  To become competitive in F1 you need to be a billionaire person or company to fund the venture.  If the cost problem was fixed we'd be sitting here talking about becoming F1 team owners because of the fat profits even the 9th placed team earns.

 

Frankly I'm all for Ferrari, McLaren, Williams and Sauber receiving a 'pension' to ensure they remain in the sport.  The teams that have helped build Formula-1 (not the guys that have owned teams the last 4, 7 or 8 years) should get to wet their beak a little now that the dividends are rolling in big time.

 

That's a bit of a chicken and egg scenario isn't it?

 

How is a team like Marussia ever going to get up to the top teams speed or popularity with only £10million + whatever money they can scrounge off rich drivers and benefactors that they can find?

 

In effect you're saying that if a team like Marussia can't have anything back from the sport unless they start winning races, an obviously flawed concept when they are disadvantaged from the start by the established teams who now get to write and vote in all the rules it seems.

 

The whole system is designed to keep them uncompetitive and on the edge of death unless they find a major car company that wants to invest in them.

 

And how are they helped by the big teams more than doubling the costs of the engines while at the same time they all say they want to work on cost cuts in F1, and have been saying so for the last decade...

Edited by johnmhinds, 12 November 2014 - 01:26.

[Tsarwash]

I have to ask again, why should a team the produces a car two seconds per lap slower, is almost always placed within the last six positions, produces little revenue for the sport and is unattractive to sponsors deserve to receive the same amount of money from F1 Revenues as one of the teams that are the star of the show? That create the media buzz, that establish meaningful fan bases, that are proven "F1 racing companies" (like Sauber..) that collect trophies, that become champs etc..

 

 

All of the top teams started somewhere. You could easily have said the same fro Ferrari, Williams or McLaren at some point in their history. If you are looking for a series with just three manufacturers, keep on with that attitude, because that's what you shall get. F1 is in a major crisis at the moment, I can see it actually ceasing to exist within eight years unless things change. 

[Nathan]

I think that's hogwash.

 

Red Bull started with Jaguar.  Force India started with Jordan.  Not as established technologically as Jaguar, but Jordan won races and had been building F1 cars for the previous 15 odd years.  Lotus F1 is a multiple won championship willing platform. No chicken or egg for those three.

 

Of those three, all owned by people worth billions, only one rose to the top and we can see why.  The level of commitment from Red Bull to F1 makes Genii and Kingfishers attempts look   And thus, those are the results they get.  Because F1 is dog eat dog, and the economy isn't good for sponsorship dollars, two of those three teams face elimination.  That's always been F1.  Who funded Sauber's entry into F1??  How many Eddie Jordan's are out there?

 

The 2010 teams came in assuming racing was going to be cheap.  And I think Caterham and Marussia proved that had budgets been capped to say $60m, financially they would have made it.  Alas those teams were founded by guys willing to spend $30-40mln/yr supporting an F1 team, , but the FIA did nothing to help them.  As Mateschitz demonstrated you have to be willing to commit two, three times that. Lopez and Co. have done a good job. 

 

The feeling I get is you people expect CVC to make up the short fall between what is needed and what the billionaire/corporation wants to spend.  I don't see why the commercial rights holder owes it to a new team owner to fund most of his project.  What does Caterham do financially for FOM?  Funny how only one side ever owes it to the other.

 

If you want small teams to get a start and foothold you have to do what they did most of F1's life and allow customer cars.  I'd bet Caterham would have done much better running a year old Lotus. Why not a year old Ferrari for Sauber?

 

F1 is sink or swim.  I don't see why a team perpetually in 7th or 8th place in the championship every year has some entitlement to lasting forever more.  I think economics can only support so many teams at an F1 calibre, and thus the ones that cant swim should be forced to hand the opportunity over to others.

Edited by Nathan, 12 November 2014 - 15:29.

[redreni]

I think that's hogwash.

 

Red Bull started with Jaguar.  Force India started with Jordan.  Not as established technologically as Jaguar, but Jordan won races and had been building F1 cars for the previous 15 odd years.  Lotus F1 is a multiple won championship willing platform. No chicken or egg for those three.

 

Of those three, all owned by people worth billions, only one rose to the top and we can see why.  The level of commitment from Red Bull to F1 makes Genii and Kingfishers attempts look   And thus, those are the results they get.  Because F1 is dog eat dog, and the economy isn't good for sponsorship dollars, two of those three teams face elimination.  That's always been F1.  Who funded Sauber's entry into F1??  How many Eddie Jordan's are out there?

 

The 2010 teams came in assuming racing was going to be cheap.  And I think Caterham and Marussia proved that had budgets been capped to say $60m, financially they would have made it.  Alas those teams were founded by guys willing to spend $30-40mln/yr supporting an F1 team, , but the FIA did nothing to help them.  As Mateschitz demonstrated you have to be willing to commit two, three times that. Lopez and Co. have done a good job. 

 

The feeling I get is you people expect CVC to make up the short fall between what is needed and what the billionaire/corporation wants to spend.  I don't see why the commercial rights holder owes it to a new team owner to fund most of his project.  What does Caterham do financially for FOM?  Funny how only one side ever owes it to the other.

 

If you want small teams to get a start and foothold you have to do what they did most of F1's life and allow customer cars.  I'd bet Caterham would have done much better running a year old Lotus. Why not a year old Ferrari for Sauber?

 

F1 is sink or swim.  I don't see why a team perpetually in 7th or 8th place in the championship every year has some entitlement to lasting forever more.  I think economics can only support so many teams at an F1 calibre, and thus the ones that cant swim should be forced to hand the opportunity over to others.

 

First bolded part, it wouldn't be a problem for F1 to be dog-eat-dog and for teams that don't perform to be eliminated if there were others ready to take their place. If you don't have serious people wanting to invest, and you end up with teams getting taken over by a bunch of chancers who want everybody else to pay their bills for them like the muppets at Caterham, surely you can see that's a problem? No serious people wish to invest in F1, even though there are plenty of rich people out there, and to me that suggests F1 is not creating the conditions where the vacant grid slots are a sound investment.

 

Second bolded part, what does Caterham do financially for FOM, until recently they contributed two cars towards a grid large enough to meet the contractual minimum promoter guarantee, which enables FOM to collect its race hosting fees. That's rather important, and I'd venture to suggest it's worth considerably more to FOM than what FOM pays to teams like Caterham. The teams and FOM need each other. FOM pays the teams in cash, and the teams pay FOM by way of services rendered, i.e. by entering the championship, turning up to the events and putting on a show. The teams at the bottom are falling away because they're not being paid enough. It's not a subsidy. It's not charity.

 

Those of us asking for these payments to be increased are not, therefore, asking for subsidies or charity, we're simply arguing that it is worth F1's while to pay for there to be a full grid of proper, constructor entrants, rather than trying to do it on the cheap by way of third cars, customer cars or, as proposed today, GP2 cars running with performance breaks/waivers to bring them up to speed. These are cheap, making-up-the-numbers solutions, and if FOM assumes nobody will notice the difference, they're in for a shock. If you're going to have an under-class of spec GP2-based machinery just to make it look like there's a full grid when there isn't, to my mind that's no more or less ridiculous than just adding extra cars to the world feed using CGI.

Edited by redreni, 12 November 2014 - 18:03.

[johnmhinds]

I think that's hogwash.

 

Red Bull started with Jaguar.  Force India started with Jordan.  Not as established technologically as Jaguar, but Jordan won races and had been building F1 cars for the previous 15 odd years.  Lotus F1 is a multiple won championship willing platform. No chicken or egg for those three.

 

Of those three, all owned by people worth billions, only one rose to the top and we can see why.  The level of commitment from Red Bull to F1 makes Genii and Kingfishers attempts look   And thus, those are the results they get.  Because F1 is dog eat dog, and the economy isn't good for sponsorship dollars, two of those three teams face elimination.  That's always been F1.  Who funded Sauber's entry into F1??  How many Eddie Jordan's are out there?

 

The 2010 teams came in assuming racing was going to be cheap.  And I think Caterham and Marussia proved that had budgets been capped to say $60m, financially they would have made it.  Alas those teams were founded by guys willing to spend $30-40mln/yr supporting an F1 team, , but the FIA did nothing to help them.  As Mateschitz demonstrated you have to be willing to commit two, three times that. Lopez and Co. have done a good job. 

 

The feeling I get is you people expect CVC to make up the short fall between what is needed and what the billionaire/corporation wants to spend.  I don't see why the commercial rights holder owes it to a new team owner to fund most of his project.  What does Caterham do financially for FOM?  Funny how only one side ever owes it to the other.

 

If you want small teams to get a start and foothold you have to do what they did most of F1's life and allow customer cars.  I'd bet Caterham would have done much better running a year old Lotus. Why not a year old Ferrari for Sauber?

 

F1 is sink or swim.  I don't see why a team perpetually in 7th or 8th place in the championship every year has some entitlement to lasting forever more.  I think economics can only support so many teams at an F1 calibre, and thus the ones that cant swim should be forced to hand the opportunity over to others.

 

It wouldn't be FOM funding them, it would be those teams getting a fair amount of the revenue generated from the TV deals and the amounts the tracks pay for F1 to turn up and race.

 

How can the team at the back of the grid be entitled to NONE of the TV money, and NONE of the fees the track is paying them to turn up?

 

Nobody is asking for those teams to be fully funded via those revenue streams, but they should at least get something back for being involved in the sport.

 

Asking Marussia to spend  $80-100million a year (money that is going down the drain if you're last with no sponsors) and then in return only giving them a pitiful 0.5% of the tv/track money ($10million) isn't a sustainable model for that team to build on.

Edited by johnmhinds, 12 November 2014 - 18:05.