Revealed: The winners and losers under Liberty’s 2021 F1 prize money plan

84 comments on “Revealed: The winners and losers under Liberty’s 2021 F1 prize money plan”

1. 

   Krommenaas (@krommenaas)
   11th April 2018, 10:25

   If Liberty push this through, I’ll forgive almost anything else they do.
   1. 

      GS (@gsagostinho)
      11th April 2018, 10:34

      @krommenaas +1
      1. 

         Will Jones (@sleepywill)
         11th April 2018, 13:07

         +2!
   2. 

      Loen (@loen)
      11th April 2018, 16:41

      I’ll second, third, fourth and fifth that response @krommenaas !
      Liberty told us they would tell the teams ‘like it is’……..
      and cold reality will look sound and smell like it should to most
      teams. To other, shall we say, ‘more equal than other’ teams
      this will be a slap in the face of considerable proportions.

      Keep this standard up, Liberty, and F1 should be well able
      to polish off the tarnish of that disreputable and corrupt era
      when back-street car dealer rules applied.

      Give us more like this Liberty…..don’t stop now !
   3. 

      Patrickl (@patrickl)
      11th April 2018, 18:50

      @krommenaas As if this actually changes anything at all.
      1. 

         Krommenaas (@krommenaas)
         11th April 2018, 19:20

         You think that for teams like Sauber and Force India, who are always on the edge of bankruptcy, getting 30 million $ extra won’t change anything at all? Then I don’t know what to say to you :)
   4. 

      rsp123 (@rsp123)
      11th April 2018, 19:35

      +1
2. 

   Hugh (@hugh11)
   11th April 2018, 10:35

   This would be amazing. Going from a difference of Almost £140m, to a difference of £40m. This should help make more teams closer to the big teams. Is there anything on the cost cap yet? I may have missed something
   1. 

      bogaaaa (@nosehair)
      11th April 2018, 10:41

      +2
   2. 

      Keith Collantine (@keithcollantine)
      11th April 2018, 11:08

      @hugh11 It’ll be $150 million.
      1. 

         Hugh (@hugh11)
         11th April 2018, 12:59

         Thanks, more good news! I’m liking their budget plans a lot, let’s hope the car regulations are just as good.
         1. 

            Robbie (@robbie)
            11th April 2018, 13:51

            Well…proposed to be $150 mill, depending on how they categorize spending in the various aspects involved. TW thinks that it is unachievable and his number is something more like $250 mill.
      2. 

         pez2k (@pez2k)
         11th April 2018, 18:42

         It’s quite interesting to look at the prize money in terms of percentage of budget, considering that proposed $150m cap:

         If we take $350m as the estimated maximum budget of any team currently, Sauber’s $49.7m prize money comes to 14.2% of what it costs to fund a front-running team.

         Under the 2021 proposal, the maximum budget on the grid would be $150m, and so Sauber’s $80m prize money would come to 53.3% of what it costs to be a front-runner.

         That for me is the number that should be underlined as the point of these changes – the immense narrowing of the budget gap for the smaller teams to be competitive, and minimising the damage that a bad year can do.

         I would also hope that the effective 40% increase in relative finances would reduce the need for funding from the drivers and allow the smaller teams to pick drivers on talent more than backing, which helps alleviate that artificial restriction on their overall performance too.
         1. 

            Jesper Baunsøe (@jesbau)
            18th July 2018, 9:40

            I see your point and I totally agree. Fewer drivers like Stroll and more drivers like Leclerc! By all means you wouldn’t want that?

            Small notice to your math and I just can’t help myself :)
            Going from $49,7m up to $80m is not a 40% increase. You are calculating a percentage based on the ratio between two numbers which gives 14,2% and 53,3% respectively and the difference between these two ratio is almost equal to 40 percentage points. The increase itself is actually almost equal to 61% :)
3. 

   Optimaximal (@optimaximal)
   11th April 2018, 10:42

   Ferrari’s unique Long Standing Team payment, which by itself is worth more than some teams’ entire prize revenues, will be scrapped.

   How does this square with earlier reporting that the LST payment was staying? I know $40 million it’s still an obscene amount of money, but it’s probably enough of a drop to cause Marchionne to put his LdM hat back on…
   1. 

      Keith Collantine (@keithcollantine)
      11th April 2018, 10:46

      @optimaximal The subsequent sentence addresses that and adds the new information about how that money is to be used.
      1. 

         Optimaximal (@optimaximal)
         11th April 2018, 10:53

         @keithcollantine Fair enough – I did some checking and it was actually the article from RF 5 days ago that stuck in my mind – I see the reduction was confirmed then too, which I must have missed. Carry on :)
         1. 

            Keith Collantine (@keithcollantine)
            11th April 2018, 11:00

            @keithcollantine No problem, I’ll get back to adding typos to @DieterRencken‘s next column :-)
            1. 

               Shimks (@shimks)
               11th April 2018, 14:46

               Not funny!!! Fix it!
            2. 

               Shimks (@shimks)
               11th April 2018, 14:47

               I forgot to add a smiley. :O)
4. 

   RB145
   11th April 2018, 10:43

   Ferrari still getting a bonus. Hopefully they wont kick up a stink about the reduction, many fans dont want them to even have that.
   1. 

      Dave F. (@dave-f)
      11th April 2018, 16:30

      Liberty should include a time related reduction so the longer Ferrari leave it without signing the less they will receive.
      1. 

         Loen (@loen)
         11th April 2018, 17:33

         Now that would be VERY interesting (@dave-f )….mmmmmm
         now wouldn’t that rattle a few cage bars…..’get in line like everybody else
         has to….or …….off !’ ) Trouble is Marchionne might just risk the threat
         of a pull-out….. and though I do not regard a certain Italian team as anything
         more than one of the world’s greatest motor racing outfits, that designation
         includes lots of other very great and worthy but now lost marques. We did
         not want to lose any of them, Ferrari included.
5. 

   Todd (@braketurnaccelerate)
   11th April 2018, 10:59

   I really would like to see 1st place get a little bit more of an incentive. Have the same payment tier between 3rd/2nd, and 2nd/1st (or 9th/8th for that matter) seems a bit odd. Seems to leave little incentive. Ideal situation would be to take away Ferrari’s $40m and make that a kicker for winning the championship.
   1. 

      Krommenaas (@krommenaas)
      11th April 2018, 13:15

      The marketing value of being world champions far exceeds the prize money anyway.
6. 

   MG1982 (@mg1982)
   11th April 2018, 10:59

   2021 prize money proposal is looking so much better!
7. 

   Makana (@makana)
   11th April 2018, 11:07

   WOW great article/comparison! Thanks Keith!
8. 

   PaulK (@paulk)
   11th April 2018, 11:11

   So where does the $40 million payment to Ferrari fit here? Wouldn’t Ferrari total prize be 115.5 + 40?
   1. 

      Egonovi
      11th April 2018, 15:32

      small print “NB. Under the 2021 prize money structure Ferrari would receive an additional $40m which must be written to group profits. Each engine manufacturer would also receive an additional $10m. These are not reflected in the tables and graph above.”

      But to be consistent this should be left in: this Ferrari reducing from 195->165; mercedes reducing from 176->130, and Renault the big winner from 67->108.
      RBR looks bad at -44, but that is largely offset by STR at +33.
9. 

   Phylyp (@phylyp)
   11th April 2018, 11:12

   Many thanks for clarifying this, Keith. Good to note that Ferrari’s $40 MM is not coming out of the $1 BN prize money, that addresses the only concern I had with this rejig.

   Very heartening to note that teams like Sauber and Force India are entitled to get an additional $30 MM. While the financial gap between first and last placed teams has reduced, we must remember that those higher placed do continue to receive proportionally higher coverage during races, thereby increasing brand visibility (so they should take that away as an intangible benefit).
10. 

    Ben Needham (@ben-n)
    11th April 2018, 11:14

    A genuine question – how much does it cost to run a Formula One team for a season? Frankly I couldn’t begin to guess. Humour me…

    By coming last in a Formula One World Championship from the proposed 2021, my theoretical team will receive $80m. I’m going to run two pay drivers, paying me $10m per season. Perhaps I get some sponsorship in place and some paying reserves that gives me another $20m in total. My theoretical team gets $120m income p/a simply for turning up, with the intention of coming last.

    As a businessman, could this be profitable or would I be sure to make a loss? As I say, I have no idea how much running a team costs, so I could be way out, but I’d imagine it’s not going to cost me more than $120m per season to put together a pretty rubbish team… (someone please prove me wrong!).

    Random musings, but curiosity meant I had to ask!
    1. 

       GeeMac (@geemac)
       11th April 2018, 11:34

       A genuine question – how much does it cost to run a Formula One team for a season? Frankly I couldn’t begin to guess. Humour me…

       F1 teams have historically spent every penny they could get their hands on, so the answer to this is really “how long is a piece of string..”. The real question should probably be “how much should it cost to run an F1 team for a season”.
       1. 

          Ben Needham (@ben-n)
          11th April 2018, 11:40

          @geemac – indeed… let’s rephrase it; “What is the minimum budget I need to run a Formula One team, around 2 seconds off the pace of the next best team?”

          Of course, this is totally against my competitive nature and sportsmanship… but if one can break even by coming last, we’d see a great influx of new teams lining up to have a go and build year on year. The current huge costs and almost certain losses frighten potential team owners away before they’ve even tried it. It’d be good to get rid of this fear.
          1. 

             Robbie (@robbie)
             11th April 2018, 13:15

             @ben-n I don’t think it is good to completely get rid of that fear, nor will that happen anyway. I think in your scenario of ‘breaking even,’ guaranteed, even for finishing last, we’d have an influx of entities trying to get into F1 for the wrong reasons, and not because they are racers at heart, with a burning desire to be there and excel. We can’t have teams trying to enter because they will happily just remain 2 seconds back, ad infinitum, there just for the pay check.

             Liberty needs to, and indeed is proposing to, make overall changes that when combined should have a bigger positive effect than this prize money balancing that will barely affect the top teams but more impactfully help the lesser teams. A better product on the track via less complicated pu’s that don’t require a factory setting to succeed in, and much less dirty air effect, should help grow back some audience and thus attract more sponsor money.

             Let’s not forget the (often huge) marketing impact teams and their sponsors get for being in F1. Without that the teams wouldn’t be there, so this is far from just about the balance of prize money and what the teams get literally from F1 directly.
             1. 

                Ben Needham (@ben-n)
                11th April 2018, 13:21

                @Robbie –

                We can’t have teams trying to enter because they will happily just remain 2 seconds back, ad infinitum, there just for the pay check.

                I absolutely agree – my thoughts were purely speculative and I’d be concerned if this was actually possible.

                If we can get the top 8-10 teams of the sport surviving reasonably comfortably, then we can add more teams to the fold who feel they can challenge the establishment without breaking the bank. Currently there are only 5 teams I could say with near-certainty will be on the grid in 2021; this needs to change and the steps being taken seem positive by Liberty.
          2. 

             Sonics (@sonicslv)
             11th April 2018, 18:06

             @ben-n I think you forgetting the fact that only 10 teams get a prize. The 11th onwards afaik won’t get any payment depicted in column 2. Also iirc, to eligible to be paid in the first place, a team must complete the last 3 season with at least one season finished 10th or higher, which makes them eligible to get the column 1 payment. Your break even strategy can only work if there’s 10 or less team competing.
    2. 

       Velocityboy (@velocityboy)
       11th April 2018, 13:51

       We see that to some extent in American sports now where the guaranteed revenue is so high that teams are willing to stink for several years to increase profits. The Miami Marlins are a great example of that, where every time the team becomes good they sell off all their top players so they can have a low salary budget and thus increase their profits. They don’t care about putting people in the seats either as ticket sales are nothing compared to the TV money.
    3. 

       Hemz Shaw (@hemzshaw)
       12th April 2018, 7:35

       @ben-n

       May be this article helps! https://www.autosport.com/f1/feature/7919/revealed-what-f1-teams-really-spent-in-2017

       The autosport article is paid one, so I have not read it.
       1. 

          Hemz Shaw (@hemzshaw)
          12th April 2018, 8:10

          @ben-n

          At the best, minimum cost of running a team looks like £90M! By your theory, yes, an F1 team can break-even in its first year of operations starting 2021 if the prize money distribution is as demonstrated above. Even if you include inflation for 3 years, it does make sense.
       2. 

          Hemz Shaw (@hemzshaw)
          12th April 2018, 8:11

          However, this is if you do not count on the money that has to be invested in hiring, factory set up etc. the capital costs.
11. 

    Joao (@johnmilk)
    11th April 2018, 11:19

    In case there are new teams how are they going to distribute the money? A share of those 1 billion (or whatever number it is) or will they increment the payment budget?

    If they don’t do the 2nd it those 10 million for the engine manufacturer start to be a bit more relevant.

    Regardless it seems to be a step in the right way
12. 

    natlmm
    11th April 2018, 11:24

    SO MUCH BETTER!!!!! We might have a competitive racing series………soon.
    1. 

       Jimmi Cynic (@jimmi-cynic)
       11th April 2018, 20:15

       Dare to dream!

       Sadly the loser teams, like Williams, have created a culture of losing for so long, it will take more than money to fix.
13. 

    Gary
    11th April 2018, 11:43

    Very interesting that Liberty is willing to give Ferrari the $40 million rather than it coming from the team’s fixed-percentage share. That is not a decision that would have been taken lightly.
    Frankly, I don’t think this rejiggering of payments would change much as it relates to the bifurcated nature of the grid. Ferrari, Mercedes and Red Bull have the resources to massively outspend everyone else even with these changes, if they so choose. The real change agent would be the cost cap, which forces the issue. Formula One is 80% car and 20% driver, so if they are capped at $150 million on the 80% then they can spend whatever they like on drivers, “senior management” and marketing and it won’t give them much of an advantage. Policing this cost cap is, of course, another matter and quite difficult.
14. 

    Steve Rogers (@yossarian)
    11th April 2018, 12:16

    Great article @keithcollantine but what happens if new teams join. Is there still the 10th place cut off on prize money?
15. 

    FlatSix (@)
    11th April 2018, 12:18

    This is good news for the teams accountant, but do we really believe the drivers of the lower ending teams “care”? Do we really believe they’ll all of a sudden get a better car. Mercedes and Ferrari will “earn” less compared to now but they will not spend less money on the development, if anything I see Mercedes leaving for it after 2021 as they already reported losses even in their championship winning years if I remember correctly.

    I don’t think this change will have any effect whatsoever on the competitiveness of the field. It will allow the backmarker teams to work under a more financial healthy environment.

    The other side I see happening is the backmarker teams spending this right away and ending up with a car that’s a tiny bit faster yet the team itself is still in financial troubles.
    1. 

       Robbie (@robbie)
       11th April 2018, 13:01

       @flatsix I thought it had been put out there that the annual marketing impact for Mercedes by being in F1 is about a $1 billion. So I wouldn’t expect that they are losing money overall, but perhaps have ‘taken a loss’ at certain times in certain departments for the tax savings or what have you.

       I think you raise a good point and I think none of us are expecting this to be a magic formula that suddenly makes a huge difference. It will only sting a little for the big teams that have no problem finding money to spend beyond that which they literally get from F1, but will certainly be more impactful for the smaller teams. I think the better balance and the sense of a little more fairness can go a long way though.

       Something I always agree with BE on though, is that new teams entering F1 should be there because they have put together the ingredients, along with a convincing mission statement that speaks to their sustainability. In other words they shouldn’t enter F1 and immediately be holding their hands out for more money. They should have entered because they can make a serious go of it. That has gotten complicated in the last decade thanks to the BE/CVC thing, and the complex factory based new formula, and the struggles for sponsor money, but in general I take BE’s point. F1 is supposed to be hard…not some guarantee that just by entering one will immediately be competitive and profitable. That’s just not the real world. They’d have entities lining up that really would have no business being in F1 otherwise.

       But to your point I think that this proposed change in prize money distribution must, and will, go hand in hand with a less complicated formula, and less aero dependence for a better show on the track, a budget cap of some sort, and theoretically a growing not a diminishing audience, which is what really should attract new sponsors and perhaps eventually new teams.
       1. 

          BlackJackFan
          14th March 2019, 5:05

          Good points Robbie.
          I would assume that new entrants would continue to be vetted by the FIA… Maybe they could use a similar arrangement as with new drivers: Potential new Teams need to show some proficiency in the lower formulae…
16. 

    ruliemaulana (@ruliemaulana)
    11th April 2018, 12:40

    Finally a proposal with numbers. And it’s looks decent too. The Ferrari special profit sharing made Mercedes and RedBull as the biggest loser. We need Marko and Lauda comment on that.

    Any projection on how much Liberty gonna spend on ‘promo budget’? I don’t think $1B prize would be achievable.
17. 

    Zedian
    11th April 2018, 12:55

    How well did financial fair play in football work ?. This is a utopian view, which is not realistic. Take for instance williams as they are now or Ferrari 2014, to improve performance they have to invest a lot of money because the nature of F1 is that someone will come up with a winning strategy that blows everyone out of the water and then dominate for 3/4 years and no one will be able to catch up since budgets are restricted and revenue is restricted.
    Another issue is that all you’ll end up with is unrestricted spending prior to 2021 by teams with money and resources i.e Haas before they entered. With long lead times and restricted spending the current order is maintained and then restrictions have to be loosened up again.
18. 

    Harrisf1 (@harrisf1)
    11th April 2018, 12:58

    All they need now is to change the voting rules to allow a 60% majority to approve changes.
19. 

    Sonics (@sonicslv)
    11th April 2018, 13:00

    Interestingly, with the extra $40M added, Ferrari will still earn the same as the WCC even if they finished last in 10th. I bet Liberty thinking very hard to arrive at the $40M number, a number that actually cut a lot the Ferrari tax (they lose a lot more than $28M and more than other teams since CCB is gone too) while still giving Marchione his bribe and “legendary team status” ego. Kudos to them if this plan realized.
    1. 

       Michael (@freelittlebirds)
       11th April 2018, 14:39

       Which is why they are the only team that don’t care about the WCC:-)

       It’s the cherry on the top but they care more about the giant cake (the WDC) more than the cherry. The WDC also brings in the WCC or P2 and they already make more money than the team that wins the WCC.

       It’s borderline insane that Ferrari makes 1 billion more than any other team simply by competing.

       But then again we have Ross Brawn and Jean Todt controlling the sport which in itself is beyond insane.

       I don’t think any of us would be surprised if Charlie Whiting’s real name is Carlos Bianchissimo Domenicali and he turns out to be Enzo’s son and Di Montezemolo’s nephew hiding in F1 race direction for the past few decades :-)
       1. 

          Sonics (@sonicslv)
          11th April 2018, 18:14

          @freelittlebirds I admit I thought Jean Todt selected as FIA president is making Ferrari International Assistance official, but to give him (and Brawn) credit, they actually don’t make Ferrari life easier. In fact we can argue they made Ferrari life harder than Schumi era.
20. 

    rob91
    11th April 2018, 13:09

    Percentages of total prize money proposed:
    1st place = 12%
    2nd = 11.55%
    3rd = 11.1%
    4th = 10.65%
    5th = 10.2%
    6th = 9.8%
    7th = 9.35%
    8th = 8.9%
    9th = 8.45%
    10th = 8%

    So last place team gets 2/3 of first place team. I feel this is too close together, I like my proposal better, I think it gives a greater incentive to finish higher.
    1. 

       Michael
       11th April 2018, 20:12

       Its not prize money though, it’s just sharing the income of F1 from TV rights. The teams and parent companies involved need steady incomes to pay staff and suppliers, and investments in R&D activities and infrastructure. Massive year on year performance based fluctuations in income, risk the teams and parent companies staying afloat and would be really tax inefficient.
21. 

    AliceD (@aliced)
    11th April 2018, 13:13

    Boring push towards mediocrity.

    Who is going to win this weekend? Don’t know could be anyone, totally random, the cars are all the same now, how exciting.
    1. 

       Robbie (@robbie)
       11th April 2018, 13:18

       Wrong.
    2. 

       Minardi (@gitanes)
       12th April 2018, 1:27

       That doesn’t happen in too many actual racing series that I know of. I doubt it.
22. 

    SparkyAMG (@)
    11th April 2018, 13:18

    The proposal not only looks good on paper but sounds and feels logical.

    However, as pointed out in Deiter’s other article there are some moral problems that still need to be addressed; predominantly the overall loss of personnel across all teams.

    I can’t help but feel that the final outcome rests on how Mercedes decide to approach these proposals. In the lead up to this season Toto has made a point of stressing that Mercedes are aligned strategically with Ferrari, and whilst I think F1 could survive if it lost one of these teams (and their engine supply), I don’t think it would survive the loss of both.

    If the cost cap could be raised to support the current level of personnel across all teams the optimist in me thinks that Mercedes will tow the line and make this happen.
    1. 

       Minardi (@gitanes)
       12th April 2018, 1:32

       Renault and Honda would gladly fill the void if they both left. With a 3rd or 4th added supplier, I think F1 would continue just fine.

       As much as I like Ferrari and their long history, it’s not what keeps me watching.
23. 

    Robbie (@robbie)
    11th April 2018, 13:26

    @sparkyamg I don’t think Liberty can or should concern themselves that some of the teams have inflated their staff to the point of ridiculousness and that might have to potentially back that down a little (which remains to be seen anyway). By that I mean they should insist that teams make their staff shrink by firing people. What just might end up being a side effect, though, is they won’t grow their staff any more.

    I thought TW made an interesting point that if the prize money were distributed more evenly to help the lesser teams, and there were budget caps in place (his number being something closer to $250 mill not $150), and if that forced them to have less staff, that staff would be able to take jobs at the other lesser teams who would theoretically be in a healthier, more competitive environment in which to grow.
    1. 

       Robbie (@robbie)
       11th April 2018, 13:48

       …they SHOULDN’T insist that teams make their staff shrink…’
       1. 

          Mad Eric (@mad-eric)
          11th April 2018, 16:44

          Why not?
          This whole process is to reduce the impact of the manufacturer teams from having more money and increase the impact of design and production concepts. Think about the loss of jobs to harness makers and whip makers with the production of the Ford model T. Think about the reduction in secretarial staff with the introduction of PCs and Word processing software. Think about the loss in jobs in the petrol and diesel driven vehicles with the growth in robotic manufacturing and assembly of just about everything now and even more in the future.
          Let the teams decide where to use their millions to produce the most exciting and advanced F1 racing cars they can WITHIN THE RULES and UNDER THE COST CAP!!!
          1. 

             Robbie (@robbie)
             11th April 2018, 20:40

             @mad-eric I hear you and I get what you are saying, but the examples you give are job losses that were inevitable with changing times or changing technology, and I just meant that as to the ‘moral’ question that @sparkyamg brought up, I don’t think Liberty should dictate a certain staff level that would see employees out on the street. Let them lessen their staff by not replacing them if they quit, or by offering buyouts to contracts, but not to fire them just because Liberty says to do so just to hit a certain number of personnel.

             When it comes to the job losses you speak of, for every job lost to the harness maker, the secretary, the car maker there is another job making Model T’s, making computers and designing software, and making robots that in turn make the cars. Just as Wolff has suggested if the natural result of cost caps is smaller teams, the staff who are no longer needed on one team may end up at other teams that are bolstered in the new F1 model.
             1. 

                BlackJackFan
                14th March 2019, 5:24

                More support, Robbie… ;-)
                I have NO support for this (probably ‘PC’ inspired) “moral” issue of staffing levels as a disguise to ignore the base issue – Costs Nee3d To Be Cut…!
                I spent most of my working life as a Freelance or on Short-Term contacts. Nobody cried when I needed to move on – it was part of the job.
                I have never seen evidence of the employment contracts of the majority of F1 Team employees but I feel sure the current trends will have a large percentage of staff in a similar situation.
                For starters I would see no problem losing 50% of the pit guys, especially the two guys who stop the car tipping over when it’s on the jacks, simply because the jacking points have been made too narrow.
                Then there are the scores of guys who are starring at computer screens, especially those back at base. I don’t doubt their efforts but I do doubt their actual necessity…
                Never forget the old adage that: “Work expands to fully utilise the number of man/hours available”…
                Many people will maintain that F1 “must” be at the forefront, and at the pinnacle, etc., etc… but it must also be at a level that can be sustained – by a majority – for everyone’s benefit.
    2. 

       SparkyAMG (@)
       11th April 2018, 13:58

       @robbie I agree that this isn’t Liberty’s primary concern, although it can’t be be ignored and will be one key point of discussion moving forwards.

       Toto’s point was the basis of my comment; a higher cost cap might ensure that there is no net loss of staff, which is currently estimated at roughly 1300 net losses if the proposal went through as it is.

       If that could be resolved then I can’t see a legitimate reason – aside from protecting their own investments – for Mercedes to kick up much of a fuss so it will be interesting to see which way they go.
       1. 

          Robbie (@robbie)
          12th April 2018, 0:24

          @sparkyamg True and at some point though we do have to consider that teams shouldn’t need such huge staffs, but that just goes to show what having very deep pockets can do. They have the money, so they hire at record levels, but that doesn’t mean every last one of those positions is crucial to them succeeding. They can find efficiencies in many areas likely. Or…put another way…if F1 teams now need 1500 staff, F1 is toast. But we know they don’t ‘need’ that many staff, they just have them because they can. They can put more heads into a room to find more ideas, but this is really stretching it. Not really sustainable in the new chapter coming.
          1. 

             BlackJackFan
             14th March 2019, 5:27

             +1
24. 

    TribalTalker (@tribaltalker)
    11th April 2018, 13:37

    Well played, Liberty Media! And a good explanation from Dieter and Keith.
    One thing that strikes me is that a big reduction in income to the top three teams will be quite hard to manage – it’s difficult to cut chunks of expenditure away from an integrated approach.
    On the other hand, the teams at the other end of the grid will already have wish lists of research and development technologies ready to hand. They will be able to forge ahead relatively quickly.
    It seems to me that, for a couple of seasons after this change, the lower teams have their best opportunity to make inroads on the big three.
25. 

    Ivan Vinitskyy (@ivan-vinitskyy)
    11th April 2018, 14:11

    This all looks good except for the bonuses that haven’t been included in any of the graphs / tables. Ferrari will remain to receive extra money, 40M so regardless where they finish they will still earn more than any other team.
26. 

    Michael (@freelittlebirds)
    11th April 2018, 14:27

    At this point, I don’t believe Ferrari needs an extra bonus. They’ve received billions more than any other team and it’s simply unfair to have a team that receives more money just because of their name.

    In the current structure, the difference between last position for Sauber ($49.6) and top position for Ferrari ($195.2) is nearly 400%.

    In the new structure, the difference between last position for Haas is ($80) and top position for Mercedes is ($120) is 50% – actually, Ferrari is the top with 155.5 once you add the profits which is 100%. I think 50% is too little between first and last.

    I’m assuming Liberty is aiming for 80%-100% and is giving the top teams room to negotiate.

    Ferrari has to give up the extra payment of $40 million. They are just another team and a lot of the teams are Long Standing Teams at this point that have suffered much more than Ferrari to be in F1 and many haven’t made it because they didn’t have the payouts or extra bonuses that Ferrari has, not because they didn’t want to.

    But this looks like a great starting point for F1.
    1. 

       Michael (@freelittlebirds)
       11th April 2018, 14:58

       Also, it’s very important not just to look at the payout schedule but at the following things:

       1. What will the whole prize fund be in 2021? Perhaps the teams should fight for a larger cut than they receive now. That might ease things for the top teams that might 5%-10% from a growth in the prize fund.
       2. What happens if another teams enters the sport? Do the other 10 teams suffer the loss?
       3. What happens if a team leaves the sport?
       4. What happens if you have many teams join and you have 15 teams?
       5. How does the prize pool grow over time?
27. 

    Joao (@johnmilk)
    11th April 2018, 15:10

    Not that I agree that Ferrari should receive those 40 million, but to clear some details, those 40 million have to be accounted as profit, which means they will have to pay taxes on them, so they will not have the total amount to spend on the team.

    Also most of the teams are not Long Standing Teams, I would consider LST only 3 Ferrari (68 years), McLaren (52 years) and Williams (40 years), the next “oldest” teams has been in the sport for 25 years.

    Again the extra payment isn’t something that I agree with, but at least it is a reduction, a new form of payment and it is a step in the right direction.
    1. 

       Joao (@johnmilk)
       11th April 2018, 15:11

       this was in response to @freelittlebirds
    2. 

       Michael (@freelittlebirds)
       11th April 2018, 15:18

       @johnmilk I understand that the amount is much lower but Ferrari have had a long-standing advantage by being in the sport longer than other teams and by being the most successful F1 team, thus receiving more money than any other team. The extra payments are incredible over time.

       If every other team enjoyed the same financial advantage, would Ferrari be Ferrari in F1? They need to prove that they are Ferrari, not just a team that gets a bonus that’s over Renault’s payout.

       If you factor in the extra money, it is questionable if Ferrari has won many championships and is the most successful team in F1. They are the best paid team, that’s unquestionable.
28. 

    rpiian (@rpiian)
    11th April 2018, 15:18

    This is supremely interesting.

    I’ve got my popcorn out.
29. 

    Jimmie in LA (@)
    11th April 2018, 16:54

    I really hope that this works out. As much as I like the Ferrari team, that payment was excruciatingly hard to take. A fairer payout system is the best way to go.

    And maybe a less harsh grid penalty combined with a financial fine would be better in the long run spec parts replacement.
30. 

    DASMAN (@dasman)
    11th April 2018, 18:09

    I’m less against this proposal than I thought I’d be. Seems a lot fairer to the smaller teams.

    On the topic of payments to historic teams, I actually like the idea, although I think we should include more teams in this – Mclaren and Williams for example to receive a pro-rata amount depending on their respective years participation in the sport.

    I also would propose that the teams can only put 50% of that payment towards the running of the team, the other 50% should be used on building the Team and F1 historic ‘brand’, as in fan events at the races, TV series, competitiions etc. all designed to promote the historic link of the team to Formula 1 and provide opportunities for these teams to get closer to their fanbase. This would be very much in line with the Liberty strategy I would guess.
31. 

    Markp
    11th April 2018, 18:44

    Hopefully everything stays as it is and if needed little teams can go. Ferrari, Merc and Red Bull can run 4 cars each so 12 drivers in top cars, rest can be covered by loyal satelite teams likes Haas or Sauber. Little teams drag everyone down.
32. 

    Patrickl (@patrickl)
    11th April 2018, 18:56

    This is exactly what I predicted whenever this subject came up. The smaller teams at best get 30 million extra. Blog posters here didn’t believe me that it would be that “little”, but here we are.

    So how much closer will that get them when staring at a 300 to 400 million deficit in budget to the top teams?

    It’s a drop in the bucket.
33. 

    TFLB (@tflb)
    11th April 2018, 20:05

    If they push this through that would be great, however I fear it will go hand-in-hand with such measures as increased standardisation – I do hope not though.
34. 

    Ed Marques (@edmarques)
    12th April 2018, 3:17

    This distribution and a 150m cap?
    Will never happen.
35. 

    ADUB SMALLBLOCK (@waptraveler)
    12th April 2018, 17:19

    I do like this, and hope that Liberty can push through a close approximation of their proposed plan. As for Ferrari’s Long Term Team payment, I would LOVE to see one new change. Teams could qualify for a similar (not necessarily equal) payment by remaining in F1 for some specified number of consecutive seasons, to be increased to a specified maximum after an additional “x” consecutive years. AND, if a team drops out of F1, and then returns, their LTT would be reduced for each year out of F1.

Comments are closed.