Bernie Ecclestone, Baku, 2016

Ecclestone ‘considering Premier League-style prize money’

2016 F1 season

Posted on

| Written by

Bernie Ecclestone says he is considering a fairer system of sharing prize money between Formula One teams modelled on English football’s Premier League.

Formula One Management currently pays huge bonuses to F1’s wealthiest teams. The prize money structure has been blamed for weakening the competition in Formula One and leaving smaller teams at a disadvantage.

Ecclestone told The Times: “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.”

Bob Fernley, Force India, Red Bull Ring, 2015
Force India want a fairer distribution of funds
“The Premier League has a good way of distributing the prize money, so maybe that could work for us.”

Critics of Ecclestone’s prize money structure have held up the Premier League as an example of a fairer means of sharing the wealth. In Formula One Ferrari often earns the largest share of prize money irrespective of its championship finishing position. In the Premier League earnings are more closely connected to performance.

The last-placed Premier League team receives around two-thirds of the prize money given to the winners. In F1 the last-placed team receives little more than a quarter as much as their highest-paid rivals. Haas stand to earn no prize money this year as they have not yet agreed terms with FOM.

Ecclestone is facing a potential legal threat from the European Union after Force India and Sauber lodged a complaint alleging F1’s prize money distribution, as well as its rules-making system, is anti-competitive.

Force India’s deputy team principal Rob Fernley argued in favour of adopting a Premier League-style prize money system earlier this month.

“The Premier League is a perfect example of the way you’ve got a performance-related programme that’s very fair and transparent,” said Fernley.

“There’s no need for negotiations. We’ve got a pot of money that needs to be done, split it in a proper manner, make it transparent, teams take it or leave it.”

A new prize money structure cannot come into place until 2020, when F1’s current commercial deals expire.

2016 F1 season

Browse all 2016 F1 season articles

Author information

Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

Got a potential story, tip or enquiry? Find out more about RaceFans and contact us here.

31 comments on “Ecclestone ‘considering Premier League-style prize money’”

  1. So, what is behind this one now? Surely Bernie can’t be starting to make sense, can he.

    Off course paying team based on their performance but with less of a ravine between what the likes of Ferrari and Red Bull get and what ends up at Sauber, Force India, Manor or Haas is good.
    But Bernie knew that all along. So what is he achieving by saying this out, is it to do with the EU investigation maybe? Or just casually ramping up towards the negotiations for new deals?

    1. @bascb He may even be gambling that a few more teams will have gone to the wall in four years’ time.

      1. Good point @keithcollantine!

        Will the likes of Manor, Sauber and Force India be able to hold on with getting very little and fighting with teams getting 3 or more times as much money with a calendar that seems more made with the focus to make a point (crazy amount of double headers, a lot of time between other races) – apart from maximising race fees off course – than with efficient travel, optimised routing or the people having to do the travelling.

    2. @bascb, with the UK now having voted to leave the EU, the protest launched by Force India and Sauber is probably now a toothless threat given that the UK will probably have severed its ties with the EU before they come to a decision on the case. In fact, thinking about it, it probably explains why Bernie publicly supported the Brexit campaign given it would enormously benefit him…

      It sounds to me more like Bernie is pushing the larger teams to relinquish some of their share of the pot by putting them under public pressure to treat the smaller teams more fairly. There is perhaps some justification to the move given that the larger teams have been just as reluctant to change the funding model as Bernie – though you can be sure that Bernie will be pushing for the larger teams to give up more of their share of the cash than FOM would be.

      1. not at all Anon. FOM still does business in the EU (at least Ferrari are, and the owners of Mercedes are too). The investigation is running, there is no reason to stop it now.

        I think that what @bullmello mentions might be closer to it – Bernie preparing this so that the larger teams can downvote it to show that he/FOM are trying to solve the issue.

        That said, Bernie probably sees the EU investigation as a bit of a crowbar to try and force the current agreements out and install something new (where FOM again takes a larger share!)

    3. @bascb – Setting it up so he looks like the good guy who wanted to change it when he knows the teams needed for approval will vote it down.

  2. Tony Mansell
    27th June 2016, 10:30

    The EPL is as good as it gets prize money wise and other leagues are starting to adapt their own system to mirror the EPL’s but it was in place from the start. It would seem more problematic to get Ferrari/Mercedes?RBR to effectively vote for themselves to get less in future. I hope it does happen but F1 is nothing if not dysfunctional.

    1. Assuming they take on the EPL method of prize money distribution. The prize money pot will be no bigger, so will the back marker teams actually end up better off from it?

      Please note, I am not saying that the current prize money system is fair (far from it)…

  3. Well that’s strange… Bernie making sense for a change. Either he is getting softer in his later years or there is something else going on: maybe he knows the EU complaint will succeed, or that a few teams will fold and there’s less money to be distributed to the remaining teams, or maybe it’s his usual tactics of saying one absurd or outrageous (in this case a good) thing while working silently on something else in the background.

    1. . . . or maybe Bernie has concerns that any investigation will uncover something really nasty – like his tax affairs.
      Not to be trusted, whatever he is doing or saying.

  4. “Considering” as in “I’ll maybe think about it for 5 seconds and then I’ll go on and see how I can make more money”?

    1. He’s playing to the galleries yes, but even if he did try honestly, few teams may threaten to leave or lobby hard.

    2. He can do both.

      Restructure it so the distribution of prize payments is fairer, but somehow he and CVC end up with more money from the pot.

      1. You mean, if Johnny used to distribute 2 & 1 apples to Steve and Ron respectively and keep 3 for himself out of the 6 apples they had, he should now distribute 1 each as a fair share to them both and keep the rest i.e 4 apples for himself.

        Bernie likes this.

        1. Yep, @illusive, that’s exactly what I mean!

  5. While this is good to hear, history tells us BC Ecclestone always has an angle when he speaks to the press. A few team principals have been saying that negotiations in respect of commercial deals post 2020 will begin “soon”, it looks like Bernie is firing his opening shots.

    He doesn’t like the smaller teams and he hates paying out more money, so perhaps he is hoping the likes of Red Bull, Ferrari and Mercedes, guided by their own self interest, could be nudged into agreeing another set of preferential bilateral deals that again lock in F1’s ridiculous prize structure to the detriment of the smaller teams.

  6. I hope he is serious. I think he might be though. The current model in unsustainable and Bernie knows it. In Bernie’s defence, he signed the last contracts under pressure for a lot of reasons. The world was different when he signed the contracts. He wanted to keep control of F1 and giving the top teams the power in return for money was in his and FOM’s interests. (maybe not F1, but that may have not been clear at the time). I think he regrets that now. He gave too much power away while trying to keep power.
    However, I think he may possibly see that it is important to distribute the money more evenly. Teams are failing in a way that they haven’t in the past. The car manufacturers have left and F1 needs its teams to be viable. Sauber, Manor, FI and so on failing are a problem. The players are established now and it doesn’t include the major car manufacturers. The car manufacturer’s have made it clear that they will come and go as they please. That wasn’t clear a few years ago as most people thought that they would enter and stay for the long term. We now know that isn’t the case. Manor (like Williams) may be around longer than Renault chooses to stay. They will certainly be round longer than BMW or Ford and so on.
    Bernie and the FOM love power and having teams like RB, Merc and especially Ferrari controlling the power is not in their interests. TBH it isn’t in the interest of F1 either as much as I hate Bernie having the power. However I would support teams like Sauber having more power and money in the future.
    One caveat to that. I like that HAAS has come in and given it a go. They may succeed in the long term. I hope the rules don’t change so that the current teams are protected and it is impossible for a new team to enter and challenge the status quo.
    I think Bernie will distribute the money better in the next round of negotiations purely because it devalues the top teams and their power. That will add power to FOM and add to the selling price when he exits.

    1. To be honest manufactures come and go even less that independent teams do. The only difference is that they have a big company behind them building cars and they can come back again while most independent teams just completely close(Red Bull could probably do what manufacturers do) since i doubt their business will disappear if the F1 team does.

      BUT would the manufacturers come and go if owning an F1 team was actually profitable or at least not an expense? The only manufacturer that doesn’t come and go is Ferrari and that is also the only manufacturer that gets enough money out of F1 to have zero balance sheet and sometimes even profit. Coincidence? i don’t think so.
      If a team wasn’t an expense and didn’t need money from the budget of the outside business then i have a feeling many manufacturers wouldn’t come and go as much.

  7. The thing that needs to be taken into consideration is that United, Chelsea MC etc aren’t going anywhere. If the engine manufacturers left F1 the sport would be in a great deal of trouble especially under the current rules. F1 might also find itself in trouble if the marquee names were to leave the sport as that would probably have a significant impact on sponsorship. I think the pot will always have to be sweeter for the legacy teams and engine manufacturers and that’s just a part of doing business in F1.

    1. That might be fact which cannot be denied, but f1 was also about minnow teams doing well, if not scoring podiums. I can’t imagine a f1 championship with just top five teams. Question is what are they gonna do for the dwindling viewership.

  8. The part he forgot to mention, is that like the Premier League, there will be twenty prizes up for grabs by the teams, and any prizes not claimed due to their being fewer than twenty teams will be allocated to Bambino Holdings (or whatever his slush fund is called this month).

    OK, I made that up, but I wouldn’t be surprised to see him pull off a trick like this to ensure he ends up with even more of the sport’s money.

    1. Yes, what Bernie doesn’t talk about adjusting is the near 50% share CVC/Bernie recoup for being the sports non-promoting promoters. Only how the current half of the pie is sliced up amongst the teams.

      While this new ‘fair and balanced’ distribution method might increase few million to the minnow teams, a more fair and balanced share for slack promoters like Bernie/CVC is 15-20%.

      Leaving 80-85% of the profits for the teams to divide (even with the current bonus/tradition tribute to the fat teams) would provide financial stability for all the teams in the sport – something never seen during Bernie’s reign. Bernie might be old and crazy, but he’s not that crazy.

  9. “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.”

    How difficult can it be?

    Where “m” is the total amount of money available, “t” is the number of teams and “e” is the amount given to each team:

    e = m/t

    1. duncan idaho
      28th June 2016, 3:22

      eccelstone gets all the money over time?

  10. “Fairer” means no reward for excellence, I’ll add that to my thesaurus.

  11. Money distribution should be based on equality (e.g 80%) and performance (e.g 20%). So smaller teams get more money but teams performs better earn more money. This is the basic.
    After that F1 can think about how to increase revenue, popularity (e.g live broadcast on internet and use more cameras choosed by viewers) and decrease costs (e.g travelling costs)
    F1 has to change money distribution system before 2020 to help smaller teams.

  12. Do ferrari still have a veto and would it cover a change in the financial distribution?

  13. If he’s looking to go out with a “good guy” story, this would be it I think. He kind of needs it as the critics could be fairly harsh in their review of his time as F1-supremo otherwise.

    It’s pretty fitting that this comes out just after the caption contest as “look at the EPL” is a common argument in the comments here whenever prize-money distribution is brought up.

    At the very least, of the two “popular” issues he has the ability to impact critically; viewership and finances. It makes the most sense to tackle the financial side where he has the reputation of being ruthless, cunning and intelligent.

  14. Given how much he’s complained recently about dominance of Mercedes ruining the show… Could he actually be thinking about more even $$ = better competition = bigger audience = more $$ ?

  15. What the hell ? Did Eccelestone’s F1 developing side of the brain finally awaken from coma? Are we going to witness the best season yet ? Find out in the next episode of….

  16. This needs to happen.

Comments are closed.