Trouble brewing in F1’s next prize money fight
They say money makes the world go round, and there are few places in this turning world this truism rings more faithfully than in Formula One.
Racing prototype cars isn’t cheap, and as the sport has grown over the years so too has its income stream swelled.
Teams of but a handful of people have ballooned into companies of hundreds approaching thousands, car manufacturing has gone from an amateur pursuit to a scientific exercise, and drivers command amongst the heftiest pay packets of any professional athlete.
Formula One today is now a billion-dollar business — yet grids have stagnate and even shrunk. Fewer teams can dream of being competitive, while some even struggle to compete at all despite multi-million-dollar budgets and collapse, putting hundreds into joblessness.
Long-time followers of Formula One will already know the sport’s deeply inequitable structure for the distribution of its sizable wealth to be the culprit.
Autosport, which has long been keeping yearly tabs on F1’s team monies, published earlier this month that in 2017 the story is much the same, with Ferrari, despite finishing a distant and hapless third in the championship last season, earning the most amount of prize money of any team.
Mercedes and Red Bull Racing are also guilty of creaming a little extra off the top, with both claiming something in the vicinity of $45 million each just for turning up — a quantum approaching the entire budget of a backmarker.
These favourable Bernie Ecclestone-era sweeteners, designed to lock the teams into competing long term, have predictably locked the competitive order more or less in place at the same time. Consider that this year, when regulation changes have put added stress on resources, that the highest earners — Mercedes, Ferrari and Red Bull Racing — are unreachable from the midfield.
Money buys performance, and while success isn’t a given — Ferrari hadn’t been consistently on the pace for years before 2017 — cash keeps you in the ballpark when ingenuity dries up.
It was surprising, therefore, for Gene Haas, owner of F1’s lowest earner despite its impressive debut campaign, to come out in defence of the sport’s financial disparities.
“Since we’re the newcomers in this business, our revenue stream from Formula One is nothing, so anything we get will be greatly appreciated,” he told Autosport.
“We just have to be very, very careful in how you redistribute the wealth because there are some teams at the top that have spent 50 years doing this, that have earned some entitlement to how the costs are distributed.”
There are of course only two team that has been “doing this” for 50 years: McLaren and Ferrari, with the latter happening to be a foundation partner of the burgeoning Haas team.
It was Vijay Mallya, owner of fellow independent constructor Force India, a team in its 26th year of F1 competition under one name or another, who was particularly incensed by the Italian connection.
“It’s pretty obvious from the Haas car that they are more than just associated with Ferrari,” he replied.
And Force India has a right to feel aggrieved, with its efficiency per prize dollar earnt amongst the best on the grid, yet it is unable to compete at the front because it simply lack the funds of its largest rivals.
“I find it actually disappointing that such a new entrant in F1, who has no previous experience of owning an F1 team, makes such a profound statement,” Mallya continued.
“Anybody looking at the income distribution pattern of F1 will immediately, without even being prompted, realise how lopsided it all is.”
Indeed so skewed is the distribution that Force India, fourth place in last year’s teams championship, earnt just 40 per cent of third-placed Ferrari’s total prize money, and it was also out-earnt by Williams and McLaren, both of which it easily beat in 2016.
Formula One’s current commercial deals expire in 2020, and with CEO Chase Carey knowing full well that the competition is unviable in the long term with its current model, negotiations for the years beyond are already underway.
Haas’s seemingly counterproductive approach to his team’s earnings hint at the battle to come between the sport’s largest and best-paid teams — and their allies — on the one side and the independent squads, who have long called for equal terms, on the other.
But the likes of Ferrari, Red Bull Racing, and Mercedes aren’t about to surrender their favourable deals, and with most of F1’s revenue tied up elsewhere, Carey and co have little choice but to brace for another inevitable round of F1 high-stakes politicking.
F1 might be on the right path, but its destination remains almost as far as it ever was.