It didn’t take too long before a war of words erupted between the newly formed FOTA and the traditional powers-that-be who rule and govern Formula One, but this time the exchanges have led to Bernie Ecclestone revealing some possible truths behind the way the revenue is shared out among the teams. This revelation comes from Bernie himself, when speaking to The Times newspaper the diminutive Briton admitted that Ferrari get more money than the other squads.
This particular slanging match started after Ferrari president and FOTA chairman Luca di Montezemolo called on Ecclestone to re-evaluae the share of revenue among the teams and asked for more say in how the sport is run. In the current climate of economic instability, the squads are looking at increasing their income while trying their best to reduce their outgoings. In the wake of the Honda departure, this is something that is very real and has to be achieved if lesser teams are to survive. However, increasing the income is nigh on impossible through traditional means, so the grid, via FOTA, have asked for more share from the commercial rights holder.
We want to know the revenues better so we can decrease the cost of the tickets. Then we have the matter of traditional tracks rather than exotic tracks just because they have a nice skyline. We have to discuss the show. How to promote. I’m not prepared any more to have all this dictated to us by outside without any control. Luca di Montezemolo.
The response from Ecclestone was nothing short of interesting.
The only thing he has not mentioned is the extra money Ferrari get above all the other teams and all the extra things Ferrari have had for years – the ‘general help’ they are considered to have had in Formula One.
Ferrari get so much more money than everyone else. They know exactly what they get; they are not that stupid, although they are not that bright, either. They get about $80 million more. When they win the constructors’ championship, which they did this year, they got $80 million more than if McLaren had won it. Bernie Ecclestone
So aside from the “general help”, Ferrari make a lot more money from winning than any other team would. And $80m is a lot, even to Ferrari. Renault famously won the 2005 and 2006 titles with a budget considered to be substantially less than their rivals at the time, Ferrari and McLaren. Had the Anglo-French squad received an extra $80m, I’m sure they wouldn’t have looked so painfully off-pace in the past one and a half years.
There is a ‘reason’ why Ferrari get this though, as Ecclestone went on to explain…
They were the only team that broke ranks with the other manufacturers – why did they break ranks? That’s where the $80 million comes in. We ‘bought’ Ferrari. We ‘bought’ Ferrari’s loyalty. Our deal with Ferrari was that we ‘bought’ them so they would not go to the others. Bernie Ecclestone.
Back in 2003, there was serious talk of the manufacturers starting a breakaway series to directly compete with Formula One. Which of course is a power the teams have over Ecclestone. Should even a small number of squads desert Formula One, the series would suffer immeasurably, meaning a breakaway series would hit the ground running. Despite this though, they wouldn’t have the network and experience of Bernie, and they wouldn’t have the tradition. Although Ferrari are in all intents and purposes a manufacturer, they are also the oldest team on the grid, the most successful and bring the sport its lion share of fans and ticket-buyers. Whoever got Ferrari would get the upper hand.
Ecclestone went on to say that Luca di Montezemolo had every right to visit CVC (Formula One’s principal owners) and go through the books. A clause in the Concord Agreement allows this, but Bernie stated that nobody from Ferrari had ever exercised this right, including di Montezemolo.
Ecclestone’s statements lead me to believe that di Montezemolo is right; the revenue needs to be better divided among the competing teams. Is this extra $80m a time-sensitive deal that will expire in a few years, or was it left open, meaning Ferrari will continue to earn more than anyone else would have done providing they keep on winning? This sort of deal only adds insult to the other teams. While I’m sure Frank Williams is pleased Ferrari remained in Formula One, I suspect he isn’t entirely happy at the costs involved.
However, if the other teams are happy for Ferrari to receive this extra income, then Bernie Ecclestone has weakened his position. FOTA are meant to be united, and if they currently are, Ecclestone may have played an important card too early in the game. Furthermore, the hints at “general help” will lead to a backlash from the sport’s traditional fans. How many times did Ferrari International Assistance come to the fore in 2008? Too many times if you ask me, and Bernie’s remarks have only added more fuel to the already burning fire.
I try to not get too political on BlogF1, preferring to quietly watch from the sidelines and then sum up the events and the consequences after the dust has settled. But what was said yesterday and will undoubtedly be said in the coming week is fast becoming a serious game of poker between some of the world’s greatest players. FOTA have become an interesting body, and after they were mocked for raising issues previously that were perhaps pointless and menial, are now attempting to take the bull by the horns. It’s going to be a very interesting off-season.