Bernie Ecclestone understands the need for change in how Formula One’s revenues are distributed to help its most vulnerable teams, according to Lotus’s deputy team principal Fedrico Gastaldi.
The absence of Marussia and Caterham from the previous round came after months of warnings from the smaller teams about the pressures they faced from the high cost of participating in F1 while they receive considerably less revenue than their rivals.
“I think everyone has known for a long time that there are big issues with the way revenue is distributed in the sport,” said Gastaldi.
“It finally looks like things are going to be addressed on this and with the full co-operation of the teams to actually get things changed, and quickly. The teams know changes need to be made, the fans can see it and now it looks like Bernie can see it too and is going to address it.
“To me and in particular to the team’s shareholders, it just seems wrong that some teams get a significant amount of money for just arriving at the track whereas other teams get nothing. Like any global business there are issues that need to be addressed and of course because F1 is so visible they come to light very publically when teams hit trouble.
“The commercial part of racing is always a hot topic and we need to make some big decisions because F1 cannot afford to lose more of its participants.
“One thing is for sure, the level of spending just to participate in F1 is way too high at present, so it has to be addressed and tough decisions have to be made. Hopefully something positive will come out of the difficult times being faced by Marussia and Caterham recently.”
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Image © Lotus/LAT
Mark Thomson (@melthom)
4th November 2014, 17:13
BE needs to spend less on his daughters and more on the teams.
Steve C
4th November 2014, 18:53
Thats just Fn stupid. BE can do with his own money what ever the hell he wants.
CountryGent (@countrygent)
4th November 2014, 21:30
So Petra Ecclestone breaking recent US housing market records for the highest asking price ($150 million) because of Daddy’s wealth is fine when the origin of that wealth is currently loosing people jobs and putting families in jeopardy? This is not just a faceless structural fault in F1, it is one costing skilled people their livelihoods.
hemzshaw
6th November 2014, 18:34
that is business, if you will. @countrygent
it sounds rude, but that is how people build money.
Steve C
10th November 2014, 13:28
YES, it’s his money, he can what ever he wants.
Dan
4th November 2014, 17:25
If people are looking to Bernie Ecclestone as the solution to F1’s problems then I fear the sport is doomed. His bizarre responses to interviewers during the Austin build-up should certainly ring alarm bells at his employers CVC. At the age of 84 he’s no longer up to the job and it’s time everyone in the pitlane recognised that. It would be helpful, too, if Jean Todt waddled off into the sunset alongside Bernie, for all the use he’s been during the latest debacle.
The fact is that the big teams are determined to spend their way to oblivion. Most already plough through a shocking amount of money for little gain. At their current rate of expenditure, it won’t be too long before teams like Mercedes will be pouring half a billion dollars a year into F1. That’s an obscene prospect which I feel will lead to a tipping point for casual fans, where it will be seen as just as morally dubious to support the oligarchs of F1 as it is to be seen wearing a fur coat. We may as well watch billionaires set £50 notes alight to see whose bonfire burns quickest. Doesn’t anyone in F1 have a notion just how tough life is for us mugs in the stands? It seems the spectators are the last people on anyone’s minds in F1.
Optimaximal (@optimaximal)
4th November 2014, 19:28
What relevance does that have? Life is often hard for most. There are people dying in wars and of famine around the world. Minorities are being oppressed for race, religion and sexuality.
If you’re able to afford to be in the stands at a Grand Prix, you’re doing better than most!
Shimks (@shimks)
4th November 2014, 21:10
Hear, hear!
Dan
4th November 2014, 21:56
Of course it’s not relevant if you’re an oppressed minority enduring famine in a Third World warzone. My apologies to you. But here in the First World, it is. Mercedes, for example, are in F1 to sell more motor cars. Other sponsors pour fortunes into the sport to publicise their brands and sell more stuff. If people watching aren’t buying, or can’t persuade their parents to buy, the sponsors won’t stick around and teams will die. I’d say that was relevant.
CountryGent (@countrygent)
4th November 2014, 22:00
True @optimaximal, but your not exactly comparing apples with apples when you compare profound violations of humanitarian liberties or global poverty with being dissatisfied with a product you’ve paid money for. Yes all grievances are relative and all Grand Prix attendees are duty bound to thank their socio-economic circumstances, but equally any individual has the right to vent dissatisfaction if they have parted with good money. That is not to say I agree with Dan’s point about the mistreatment of fans, but merely that poverty, war and illegal human rights violations don’t infringe on our right to feel ripped off.
petebaldwin (@)
5th November 2014, 11:30
Sure but that’s completely irrelevant in the context of what we are talking about.
You could use that argument to almost everything on here but it wouldn’t make for much of a converation!
“Williams had a disasterous weekend”
Disasterous!? I’ll show you a disaster. The tsunami a few years back. That was a disaster! Williams got to race F1 cars for the weekend!!
“Hamilton was brave with his overtaking manouver”
Brave!? You’ve got to be kidding me right!? Brave is climbing into a burning building to save a child. Brave is going to war and fighting for your country!
“The Sauber was quite slow at the start of the season”
SLOW!!!!!????? It’s an F1 car! Put it in a race against my old banger and call it slow then!
You can do it for any argument but it’s absolutely pointless….
Neil (@neilosjames)
4th November 2014, 18:09
He sees a need for change. But not in the amount him and his buddies extract every year, which is an even greater issue than the unequality…
@HoHum (@hohum)
4th November 2014, 21:20
here,here.
BJ (@beejis60)
4th November 2014, 18:26
With the apparent development that Merc will allow an engine unfreeze, I wonder if Merc countered that the top teams need to give up a few percent of their income for redistribution to the lower teams…
Or is that just far beyond wishful thinking?
@HoHum (@hohum)
4th November 2014, 21:35
If Merc allow a loosening of the engine freeze, I hope they and/or the teams they supply successfully argue that the development costs should not be passed onto the teams for several reasons;
1. Why should teams running Renault and Ferrari engines have to pay more to get the same performance as MB engines.
2. MB-AMGs demonstrated superior performance is priceless in advertising/prestige value.
3. Much has/will be learned that will be used in production engines in order to sell more vehicles.
petebaldwin (@)
5th November 2014, 11:33
@beejis60 – One thing that I can say for certain is that no-one in F1 ever agrees to anything unless there is a direct benefit for themself.
If Mercedes have agreed to an unfreeze, it will be because they have gained something or perhaps, because they have figured out how to improve their own engine.
Imagine that – an engine unfreeze, everyone copies Mercedes’ ideas and Mercedes go a different way and end up even quicker!
bull mello (@bullmello)
4th November 2014, 20:38
Lack of more fair and proper distribution of F1 revenues to all teams leads to bad publicity. Bernie stirs and wakes. Thinking probably that he and the teams are now forced to put a good face on this. Probably hoping it doesn’t cost them too much to help rescue their own sport.
@HoHum (@hohum)
4th November 2014, 21:49
@bullmello, that good face is unlikely to last beyond Abu Double, and definitely not beyond the time it takes for Bernie to find a couple (or even 1 + Haas) of new teams.
Bernie is probably passing around the begging bowl himself right now, I wouldn’t be surprised if he was asking his good buddy V.Putin to “lean” on some oligarchs and suggest that they finance the return of team **Russia.
bull mello (@bullmello)
5th November 2014, 1:47
@hohum – Agreed, stopgap words until he can impose 3 car teams because the “rich” teams didn’t give enough to save the smaller teams for 2015.
He really has all the teams over a barrel. If they don’t give enough to save the small teams to run next season, then the remaining teams will have to likely spend even more to run third cars. This whether or not Bernie gives anything at all.
petebaldwin (@)
5th November 2014, 11:35
@bullmello – It’s in the team’s hands. All they need to do is state that they will not be entering the 2015 Championship until this is sorted out.
Bernie has the teams over a barrel because they are going to enter next year. He holds all the cards. If they all threaten a boycott of the season, suddenly the cards completly change hands…
@HoHum (@hohum)
4th November 2014, 21:13
The level of spending necessary “just to turn up” is affordable, or rather would be if the revenue the teams generate by “turning up” were equitably distributed. The real problem in F1 is that Bernie slipped under the teams guard and “stole” the commercial rights with complicity from Max M. CVC legitimately purchased the rights to rape and pillage F1, the reason that a court of law found that they had not underpaid for those rights is because of the risk involved that F1 will fail unless more more Billionaires/corporations can be induced to continue to spend hundreds of millions of $$$ just to turn up. If CVC were forced to accept a return based on the commercial value of the services they provide then they may have actually overpaid ,but don’t waste any sympathy on them, they have taken more money out of F1 than they have paid to the teams and long ago re-couped their initial investement.
@HoHum (@hohum)
4th November 2014, 21:16
I guess the words stole + Bernie + MaxM, must not occur enen in quotation marks.
@HoHum (@hohum)
4th November 2014, 21:18
Edit to acquired, if you must.
Hairs (@hairs)
4th November 2014, 22:02
Lotus are delusional if they really think Bernie sees any need for change.
James Keith (@fishinjim)
13th November 2014, 19:38
Amen
Tomcat173 (@tomcat173)
4th November 2014, 22:28
I must admit I take an issue with some of Lopez’s comments, and probably go against tide of sentiment in thinking that the loss of Caterham and Marussia is the status quo for Formula 1.
F1 has always been a meritocracy, not a democracy. Not everyone deserves to be there. Lopez can complain that the amount of money required to participate in F1 is too high at present… but its always been exhorbitantly expensive to design and construct F1 machines and get them to 20 races a year (relative to say a team in GP2). If Lotus can’t afford to spend the excessive amount of dollars to run its team then Bernie has a point when he says that they (or other smaller teams) don’t need to be there.
What I don’t understand about the teams that fail due to money issues is – they are running businesses, and at the start of each season they know how much money will come in through prize money, sponsorship, pay drivers, etc, and also how much its going to cost them to build 2 cars and get them to each race in the season – they are working to a budget, so folding due to financial reasons is due to their own financial mismanagement. If your budget for the season is $60m then you have to run your team to that budget. A team like Sauber is a good example where it seems like good management is keeping the team in the game.
The larger issue about distribution of funds in the sport is about the competitiveness of those teams, not about their survival. Rebalancing the funds towards smaller teams means they should have a better opportunity to compete with the bigger teams – not have a better chance of survival.
Some teams are “worth” more to the sport than some of the newcomers, so why shouldnt they get more just for showing up?!
Mog
4th November 2014, 22:42
@Tomcat. The issue is not that the small teams mismanage their budget, its that the minimum cost to compete is higher than their available budget. Thus financial decisions are forced on them and if they want to stay, they have to go into debt. Lopez pointed this out during the Fri press conference after Toto Wolff made the same point you make here.
Of course, I take your point about the meritocracy. But if the small teams go, the pandora’s box of three car teams is opened and F1 is on the slippery slope.
Tomcat173 (@tomcat173)
5th November 2014, 3:51
It would be interesting to see what a minimum budget to run an F1 team looks like, and compare it to the prizemoney a team gets if they finishing anywhere in the back third of the grid. In another article M Matiacci said he had no idea what the minimum figure to operate an F1 team would be.
The financial decisions that get forced on them (partly due to the imbalance of prizemoney) ought to limit their competitiveness, not their survival. Teams need to ensure they survive first, then develop aero/pay big driver salaries/etc second.
DaveW (@dmw)
4th November 2014, 22:46
You should not rely on that Sauber comparison too heavily. They just took on a patently mediocre pay driver to make ends meet. It’s not just about which team is running according to best practice. If you have a 60mm budget and you pay 20mm for a powerplant, you don’t have much left after you pay for fuel, tires and other essential consumables. Oh and there is the designing and building your car part. Then you write off a care or two in the season. You can have all the Wharton MBAs you want running the show, but the point being made here is that the business model is unsustainable for half the field or entrants not being directly supported by members of the royal court, e.g., Haas. It’s simple arithmetic. As for why teams should get money for turning up, that’s like asking why a one win team in a sports league should get a minimal share of a sport’s revenue, or at least enough to keep their lights on, at the end of the year. They are part of what earns that revenue, by competing.
Tomcat173 (@tomcat173)
5th November 2014, 3:56
Sauber’s current predicament is an example of the choices they’ve been forced to make given their current circumstances – they’re forced to go with a pay driver who brings significant sponsorship because they’re going to finish lower down the order this year. It was a smart decision to make.
How a team then becomes competitive again is the $60k (or $60m?) question.
DaveW (@dmw)
5th November 2014, 15:49
I don’t think becoming competitive is the benchmark and is too much to ask at this juncture. The more pressing issue is what can keep the show no the road. In any case, I think it’s clear that if a smaller, poorer team had some stability of revenue and prospects in the sport, they can challenge the big names. Look at FI, Sauber, STR, who have been able to do it from time to time even without massive guaranteed year-end pay-outs. I think that if you give the smaller teams a stable platform, they will have the means and wherewithal to punch above their weight. In the past couple years, a couple of expensive and drastic developments—new expensive drivetrains beginning with KERS, more races—have put them over the edge. Remember that “Lotus,” FI, STR, Sauber all survived the financial crisis and super-recession, while big name factory squads turned tail, but they are under the gun now.
@HoHum (@hohum)
4th November 2014, 23:03
@tomcat, NO, they do not know what income will be coming in from prizemoney and sponsorship, there is no script (yet) for F1, a multicar crash might get them points or it might cost them the price of a complete new car, and there is always the possibility of finding a sponsor during the season if the team performs as well as they expect it will.
Jay Menon (@jaymenon10)
5th November 2014, 0:30
It sad that teams are on the verge of falling out of F1 rather than clamouring to get in. Moving to the new engines was probably the best strategic decision F1 has made in recent years, but as usual, the implementation has been found wanting. Everyone concurs that this type of hybrid tech is the future, it is already prevalent at the top end of the sportscar market…so the question is, why arent more manufacturers looking to join up?
Has F1 not a good enough job of selling itself? On the evidence of whats gone on in the past couple weeks..probably not so much. F1 needs a good PR person to build its reputation up to what it used to be, the premier class of motor racing, where all the top manufacturers compete for supremacy. Now more than ever, the template is perfect as it is an engine formula now, the manufacturers have the best chance to stand out.
F1 needs a change. Thanks for all your hard work Bernie, but its time to hand the baton over to the next guy who will hopefully catch up to the 21st century.
JohnBt (@johnbt)
5th November 2014, 8:03
Hybrid engines cost 5 times more, not sustainable. Just hope the woes will dissappear as the years go by or lose F1. It’s already happening but it can be saved if greed is removed.
Loen (@loen)
5th November 2014, 8:54
‘Yes, Mr BCE, F1 needs major changes to it’s management
structure…you are so right about that….don’t trip
over the door mat on your way out, and make sure your
desk is cleared of the 51244 IOU’s littered all over it.’