FIA Thread

[AR3-GP]

I'm surprised no one is discussing the elephant in the room.

FOM. There should be an increase in the prize money pool owed to the teams, per entrant. Andretti's entry should require FOM to contribute X million additional dollars to the prize pool. It should come out of FOMs income.

The FOM are pitting the teams against each other in hopes that they don't come to the aforementioned realization.....

[FW17]

I'm surprised no one is discussing the elephant in the room.

FOM. There should be an increase in the prize money pool owed to the teams, per entrant. Andretti's entry should require FOM to contribute X million additional dollars to the prize pool. It should come out of FOMs income.

The FOM are pitting the teams against each other in hopes that they don't come to the aforementioned realization.....

Not really.

The price money pool is fixed as a X % of revenue. Teams then split them according to champion finishing position.

X% of revenue does not change with number of teams. It us the teams that get a smaller cut.

What FOM looses is the additional travel expense for the new teams which is outside the price pool. This expense is for the transport of cars, some tonnage of equipment and air tickets dor some number of staff for races outside of Europe.

[AR3-GP]

I'm surprised no one is discussing the elephant in the room.

FOM. There should be an increase in the prize money pool owed to the teams, per entrant. Andretti's entry should require FOM to contribute X million additional dollars to the prize pool. It should come out of FOMs income.

The FOM are pitting the teams against each other in hopes that they don't come to the aforementioned realization.....

Not really.

The price money pool is fixed as a X % of revenue. Teams then split them according to champion finishing position.

X% of revenue does not change with number of teams. It us the teams that get a smaller cut.

What FOM looses is the additional travel expense for the new teams which is outside the price pool. This expense is for the transport of cars, some tonnage of equipment and air tickets dor some number of staff for races outside of Europe.

Additional teams drives revenue increases because it creates more trackside attendance which leads to more demand by circuit organizers, which allows for higher hosting fees and more expensive TV contracts.

If it's as you say, then it should be apparent why it benefits the other teams to allow Andretti in. However it doesn't seem as straightforward as this so clearly this fixed % revenue redistribution is not enough to absorb the immediate impact of a new team. FOM should absorb the immediate cost of the new team because they stand to benefit the most. FOM is going to get paid whether those 11 teams finish in alphabetical order or not.

[FW17]

I'm surprised no one is discussing the elephant in the room.

FOM. There should be an increase in the prize money pool owed to the teams, per entrant. Andretti's entry should require FOM to contribute X million additional dollars to the prize pool. It should come out of FOMs income.

The FOM are pitting the teams against each other in hopes that they don't come to the aforementioned realization.....

Not really.

The price money pool is fixed as a X % of revenue. Teams then split them according to champion finishing position.

X% of revenue does not change with number of teams. It us the teams that get a smaller cut.

What FOM looses is the additional travel expense for the new teams which is outside the price pool. This expense is for the transport of cars, some tonnage of equipment and air tickets dor some number of staff for races outside of Europe.

Additional teams drives revenue increases because it creates more trackside attendance which leads to more demand by circuit organizers, which allows for higher hosting fees and more expensive TV contracts.

If it's as you say, then it should be apparent why it benefits the other teams to allow Andretti in. However it doesn't seem as straightforward as this so clearly this fixed % revenue redistribution is not enough to absorb the immediate impact of a new team. FOM should absorb the immediate cost of the new team because they stand to benefit the most. FOM is going to get paid whether those 11 teams finish in alphabetical order or not.

2 differences between old (till 2020) and new (2021) financial agreements'

1. New teams are not eligible for price money till the 3rd year
2. They need to finish in the top 10 for being eligible for price money. Only top 10 get price money

The new new agreement made it attractive to the existing and new incoming teams because of the following reasons;
1. New teams get price money from the second year
2. All teams get price money irrespective of championship position
3. New teams pay compensation to the revenue loss of the existing teams with a 200 million anti dilution fee
4. Budget cap gave a chance for teams to be be profitable as the FOM Money and sponsors money could be enough to generate a surplus.
5. Indirectly put a cap on F1 team personals salary as the spend on staff salary was part of the capped cost

[AR3-GP]

Not really.

The price money pool is fixed as a X % of revenue. Teams then split them according to champion finishing position.

X% of revenue does not change with number of teams. It us the teams that get a smaller cut.

What FOM looses is the additional travel expense for the new teams which is outside the price pool. This expense is for the transport of cars, some tonnage of equipment and air tickets dor some number of staff for races outside of Europe.

Additional teams drives revenue increases because it creates more trackside attendance which leads to more demand by circuit organizers, which allows for higher hosting fees and more expensive TV contracts.

If it's as you say, then it should be apparent why it benefits the other teams to allow Andretti in. However it doesn't seem as straightforward as this so clearly this fixed % revenue redistribution is not enough to absorb the immediate impact of a new team. FOM should absorb the immediate cost of the new team because they stand to benefit the most. FOM is going to get paid whether those 11 teams finish in alphabetical order or not.

2 differences between old (till 2020) and new (2021) financial agreements'

1. New teams are not eligible for price money till the 3rd year
2. They need to finish in the top 10 for being eligible for price money. Only top 10 get price money

The new new agreement made it attractive to the existing and new incoming teams because of the following reasons;
1. New teams get price money from the second year
2. All teams get price money irrespective of championship position
3. New teams pay compensation to the revenue loss of the existing teams with a 200 million anti dilution fee
4. Budget cap gave a chance for teams to be be profitable as the FOM Money and sponsors money could be enough to generate a surplus.
5. Indirectly put a cap on F1 team personals salary as the spend on staff salary was part of the capped cost

So then how come teams are still against it despite the anti-dilution fee.

[FW17]

They want 200 million to become half a billion which would give them;

1. more money initially
2. formally increase their valuation from 200 million to half a billion

[AR3-GP]

The valuation has to be much higher than that. 200 million gets you an entry, with no assets/infrastructure, no drivers, no staff, no nothing.

[Stu]

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…

So then how come teams are still against it despite the anti-dilution fee.

One word.

Greed

[saviour stivala]

The 'valuation' is something agreed on and as such it will stay there at least till the next concord agreement comes up.

[Soalar]

https://www.planetf1.com/news/f1-issues ... n-sulayem/

[langedweil]

https://www.planetf1.com/news/f1-issues ... n-sulayem/

Well, all this output over the last few days seems to trajectorize pretty clear towards a MBS exit before testing even starts ..

[mendis]

https://www.planetf1.com/news/f1-issues ... n-sulayem/

Well, all this output over the last few days seems to trajectorize pretty clear towards a MBS exit before testing even starts ..

I guess he has done enough damage with the F1 teams as well, besides Liberty with his caveman like attitude. He isn't the best representation of a shrewd, intelligent and knowledgeable middle eastern businessman, nor a sports administrator. I felt like he operated like one among the posters here where he was a fan of one team and a foe of the others. Obviously, It wouldn't have gone down well with the teams. FIA needs a better person to lead.

[AR3-GP]

https://www.planetf1.com/news/f1-issues ... n-sulayem/

Well, all this output over the last few days seems to trajectorize pretty clear towards a MBS exit before testing even starts ..

They had issues with the Bernie, Max, and Jean Todt ran things as well.

[AR3-GP]

The 'valuation' is something agreed on and as such it will stay there at least till the next concord agreement comes up.

the 200 million is not a valuation. It's an anti-dilution fee.

As I said before, 200 million gets you an entry pass. You'll need another billion for infrastructure, staff, and drivers.

So an F1 teams value is far more than the 200 million.

[saviour stivala]

Yes the 200 million is not a valuation , it's an anti-dilution fee, my mistake.