34 replies to this topic

[SophieB]

Dieter Rencken has been looking to the future of Liberty prize money to the F1 teams:

 

https://www.racefans...ize-money-plan/

 

Ferrari and Mercedes will receive a much smaller share of F1’s prize money from 2021 under new plans for how the near-$1 billion fund will be shared out.

Formula One Management’s commercial rights holder Liberty Media presented its proposed changes to teams in Bahrain. RaceFans has learned from sources how it intends to cut top teams’ payments and hand more money to F1’s smaller outfits such as Williams and Force India.

Ferrari’s unique Long Standing Team payment, which by itself is worth more than some teams’ entire prize revenues, will be scrapped. The payment, worth $68 million last year, will be replaced by a $40 million payment which must be taken as company profits, RaceFans understands.

 

 

 

[Anderis]

It almost sounds too reasonable to come true.

[Risil]

Huh, Dieter Rencken's not contributing to Autosport anymore? Big loss, that. Or rather, big gain for Keith and the gang at Racefans.net.

[Risil]

Anyway, looks like Ferrari and Mercedes have been divided from the rest of the teams. Every other team stands to benefit. In Rencken's table, Red Bull actually come out better under the new system once you've added in the money earned by Toro Rosso. Plus, for a team of winners like the Bulls equally pertinent is the fact that they're looking at a $9m deficit over Ferrari rather than $40m.

 

Wonder how they're going to handle an 11th team though, should one ever materialize.

[Anderis]

Wonder how they're going to handle an 11th team though, should one ever materialize.

Yeah, that is a very important question.

 

I hope the difference between 10th and 11th place isn't as big as it used to be, otherwise everyone who fails to finish inside top10 for a couple of seasons in row might get driven out of the sport like Caterham and Manor were. If F1 wants to have more than 10 teams (and I really believe it would benefit from it), it also needs to have an adequate prize money system.

[Risil]

Yeah, that is a very important question.
 
I hope the difference between 10th and 11th place isn't as big as it used to be, otherwise everyone who fails to finish inside top10 for a couple of seasons in row might get driven out of the sport like Caterham and Manor were. If F1 wants to have more than 10 teams (and I really believe it would benefit from it), it also needs to have an adequate prize money system.

 

I'm also not keen on the idea of F1 giving up after this and saying that a 20-car grid is enough. I want so many entries that they have to bring back pre-qualifying.

[Kalmake]

The texts speaks of last placed team, not 10th. So then it would be streched if more teams turn up. Could be just careless writing of course.

[SophieB]

Anyway, looks like Ferrari and Mercedes have been divided from the rest of the teams. Every other team stands to benefit. In Rencken's table, Red Bull actually come out better under the new system once you've added in the money earned by Toro Rosso. Plus, for a team of winners like the Bulls equally pertinent is the fact that they're looking at a $9m deficit over Ferrari rather than $40m.

 

Wonder how they're going to handle an 11th team though, should one ever materialize.

 

I thought it was somehow amusing McLaren are smack in the middle, neither gaining much or losing much. Almost like they are some sort of control solution that calibrates the rest of the thing.

[PayasYouRace]

As shown by Rencken that’s a much fairer system that what we currently have. It’s also much easier to adjust fairly should the number of teams change.

[PayasYouRace]

I thought it was somehow amusing McLaren are smack in the middle, neither gaining much or losing much. Almost like they are some sort of control solution that calibrates the rest of the thing.

Or possibly that McLaren are, dare I say it, the epitome of the average Formula 1 team.

[SophieB]

I was trying to find a way to NOT say that!

[andrewf1]

Ferrari's bonus is still too much and highly unfair. Getting paid $40 million for just being there is ridiculous. 

[PayasYouRace]

That’s unfair of me on McLaren really, because they’re just at the crossover point between the benficiaries and the rest. But given that the current system is grossly unfair to begin with, it doesn’t say much.

[LeClerc]

As shown by Rencken that’s a much fairer system that what we currently have. It’s also much easier to adjust fairly should the number of teams change.

It all sounds very sensible, which is why I eye it with great suspicion 😁

[JoeDede]

Ferrari's bonus is still too much and highly unfair. Getting paid $40 million for just being there is ridiculous. 

 

Yep. One would think they could at least have done it incrementally as in 2021 40 mill, 2022 30 etc. so that they would send a signal, the idiotic times is about over 

[CPR]

I thought it was somehow amusing McLaren are smack in the middle, neither gaining much or losing much. Almost like they are some sort of control solution that calibrates the rest of the thing.

 

Well, McLaren are currently third in the constructors championship. I'm not saying they're going to end the year there but currently they're heading for a much better position than last year and so are more likely to be losers from the new prize money calculation.

 

Incidentally, Zak Brown has generally been supportive of $150m budget cap for some time and has been open about willing to compromise on their special payments if it means a saner sport:

http://www.planetf1....ecial-payments/

 

I don't think he's said anything definite but my general impression is that if these rules go through as is then what McLaren will likely do is create some new sports teams (eg for WEC and/or Indycar) and move any "excess" engineers from the F1 team into those new teams.

[Sterzo]

This would be a great step in the right direction. Let's hope (a) Liberty manages to implement it and (b) at some point in the future they take it a step or two further.

 

Here's a translation for Sean Bratches in case he reads this. (a) I hope he effectuates the optimisation of a brand partner reset and (b) going forward puts more water in the ocean to rise all tides.

[Forghieri]

 

I don't think he's said anything definite but my general impression is that if these rules go through as is then what McLaren will likely do is create some new sports teams (eg for WEC and/or Indycar) and move any "excess" engineers from the F1 team into those new teams.

 

I hope all the big teams will do this, as it would increase the competition in other series.

[Lights]

Ferrari’s unique Long Standing Team payment, which by itself is worth more than some teams’ entire prize revenues, will be scrapped. The payment, worth $68 million last year, will be replaced by a $40 million payment which must be taken as company profits, RaceFans understands.

 

Can anyone explain what this means?

 

To me it doesn't mean anything is scrapped, just decreasing from 68 to 40 million.

[andrewf1]

Ferrari’s unique Long Standing Team payment, which by itself is worth more than some teams’ entire prize revenues, will be scrapped. The payment, worth $68 million last year, will be replaced by a $40 million payment which must be taken as company profits, RaceFans understands.

 

Can anyone explain what this means?

 

To me it doesn't mean anything is scrapped, just decreasing from 68 to 40 million.

 

It's decreasing from 68 million to 50    They get another 10 million as engine manufacturers too. 

[Kalmake]

They can't use that 40 for the team budget. Maybe there are legal or tax reasons why it matters, but I don't see a practical difference.

[Fastcake]

It’s a step forward. It’s a shame Liberty lacked the ability to totally remove Ferrari’s bribe, but a compromise obviously had to happen somewhere. 

 

I'm also not keen on the idea of F1 giving up after this and saying that a 20-car grid is enough. I want so many entries that they have to bring back pre-qualifying.

 

Agreed. I don’t think it will ever be sustainable to have more entries than starting positions again (and pre-qualifying was never really sustainable the first time round), but I’d like to see 26 cars on the grid again. 

 

Perhaps one way of encouraging it would be to have the prize money for 11th, 12th and 13th teams cordoned off, and advanced to a new entry a the start of their first season. Or if no one wants to come in, Todt can use it to build speed bumps in Malawi or something. At the least you want to avoid the current situation, where I understand when a team drops out, the surviving teams split their prize money amongst themselves. You want an ecosystem where the teams are encouraged to support a new entry - perhaps through Haas style set-ups where it’s made worth their while. 

 

I don't think he's said anything definite but my general impression is that if these rules go through as is then what McLaren will likely do is create some new sports teams (eg for WEC and/or Indycar) and move any "excess" engineers from the F1 team into those new teams.

 

‘That will certainly help, and make the whole motorsport world benefit. But I think the biggest mitigation to job losses is new teams hiring up any staff made redundant. 

[Afterburner]

I thought it was somehow amusing McLaren are smack in the middle, neither gaining much or losing much. Almost like they are some sort of control solution that calibrates the rest of the thing.

One-point calibrations usually don’t end very well...

[danmills]

Just a thought... when did Ferrari first receive their lions share of prize money for just being Ferrari?

The next teams based on age to receive this are McLaren and Williams. Would it not be right to feel that once they reached the same age they too would earn the same status Ferrari has done?

I know it won't work that way, but logically, it should in some way reflect a % of how long you have been part of the sports existence as an entirety.

[JoeDede]

Just a thought... when did Ferrari first receive their lions share of prize money for just being Ferrari?

The next teams based on age to receive this are McLaren and Williams. Would it not be right to feel that once they reached the same age they too would earn the same status Ferrari has done?

I know it won't work that way, but logically, it should in some way reflect a % of how long you have been part of the sports existence as an entirety.

 

Maybe it goes all the way back to the 50's when Ferrari was engine supplier to lots of teams?

 

Anyway, those times are over and so should their bribe money be as well imo.

[johnmhinds]

I wonder what happens once we see the inevitable collapse of the TV revenue in the mid 2020s, are Liberty going to squeeze the teams budgets down further to keep their profit share or is everyone going to take a hit?

[pingu666]

they could have %splits for all number of teams, so when 11th team joins, its already set what everyone will get, rather than 11/12/13 being cut off from anything which was really counter productive

[ArrowsLivery]

I think this will kill any chances of an 11th or 12th team. Every new team would cost existing teams a fortune, without necessarily increasing revenue. 

[Antemeridian]

Depends on how they structure things. If you look at North American leagues like the NHL, new franchises pay an expansion fee which is shared amongst all of the existing franchises. It's a different model than F1, but with some cost containment, and potentially the option for a team to start on a Haas-style model, it may help the grid grow. If the sport grows, it could end being a 'rising tide' scenario, whereby they get a smaller piece of a bigger pie, and it nets out either flat or positive.

[pingu666]

I think this will kill any chances of an 11th or 12th team. Every new team would cost existing teams a fortune, without necessarily increasing revenue. 

 

depends if other teams  have much of a say

[Myrvold]

Wonder how they're going to handle an 11th team though, should one ever materialize.

From that other thread (don't remember which one). I figured out if they removed all special payments put that in the column 1 pot, then added all together, split equally on 13 teams. McLaren would lose 5.5 mill EUR, Williams would earn more(!) and bascially only Ferrari, Merc and RB would lose enough money to actually complain about.

[ray b]

Maybe it goes all the way back to the 50's when Ferrari was engine supplier to lots of teams?

 

Anyway, those times are over and so should their bribe money be as well imo.

????

no

the few red motors used were not official Ferrari f-1 units

or just old spare cars loaned to national teams

[Osiris]

It's decreasing from 68 million to 50 They get another 10 million as engine manufacturers too.

I thought the $10 mill for supplying engines was included in that amount for a total of $40 mill.

Nope...see it now. 40 plus 10

Edited by Osiris, 11 April 2018 - 22:34.

[loki]

I wonder what happens once we see the inevitable collapse of the TV revenue in the mid 2020s, are Liberty going to squeeze the teams budgets down further to keep their profit share or is everyone going to take a hit?

Except for Sky the TV revenue is nowhere near the potential it could be.  Sports in the US make more money with far fewer viewers than F1 even with declining ratings.  They'll make more eventually selling and licensing streams than over the air broadcast.  In developed markets by the mid 2020s the TV landscape is going to look different than now.

[TJJohansen]

It almost sounds too reasonable to come true.

 

Not to worry. You, like the rest of us know that when they propose one thing, the end result will probably be quite different!

 

Like this most likely!

 

 

 

T J