F1 Governance and money

[Intego]

The granted $10m for the new teams of 2010 end after this season so it will be zero after 2013 as things are now.

Do you conclude that from prior business practise or do you have a source for that?
The way I read Saward he expects the $10m payment to continue next year. That seems to be the expectation of HRT and Marussia as well. Interestingly as the OP said it looks now that Caterham may loose the 10th team position to Marussia and become the 11th team next year. That would swap a huge amount of money between those two teams. HRT is likely to simply fold.

09/21/2010 AMuS

Der Bonus von zehn Millionen Dollar für die Neulinge wird an alle drei unabhängig von ihrem Gesamtrang in der Weltmeisterschaft bis Ende 2012 ausgezahlt.
The Bonus of $10m for the novices is paid to all three teams until the end of 2012 regardless of their Championship position.

It will be interesting if the teams placed on 11th and 12th can bargain a new deal. But for now the extra payment ends after this season.
And yes, it's rumoured that HRT has already closed its doors previous to Austin and just once more finishes this season.

[WhiteBlue]

Well, the situation of HRT isn't really much influenced of the question how the FOM pay out for the two last teams will be handled. And the AMuS message simply says that the money was secured until the end of the 2009 CA. It tells us nothing about future deals from next year. We do not know if the payment schedule regarding the two last teams will be continued, but there are good reasons to believe they will. The reasons for granting the money in 2009 are still present and the money might be a good investment to protect against shrinking grids. FOTA could have decided it is the best protection for their constructor privilege. In the end they receive a certain percentage and they have probably agreed on the payout to the new teams. I guess we will learn in the fullness of time what will happen.

[Intego]

The FOTA is not capable of acting at the moment as it currently consists of mere seven teams and HRT is not part of it. Bernie would be glad if HRT left the grid (and publicly concedes that) and I assume he is the puppet master to attract another works team as there are rumours of e.g. VW/Porsche to be interested in joining F1 with the new V6 turbo engine.

But you're right, WhiteBlue, I assume either Marussia or Caterham (whoever will be 11th) will be able to make a new deal with Bernie. But they have to commit theirselves to take part until 2020 (can HRT maintain that?) and they have to renegotiate on their own, because Bernie once more managed to divide the teams.

It's the mammon, stupid!

[Pup]

The allocation of this year's prize fund, per Saward's formula (which I don't think is quite accurate, since it doesn't account for the "Category B" payments which are based on historic performance)...

Total estimated fund (per TJ13) - $750,000,000, less Ferrari's 2.5%, or $18,250,000, leaves $711,750,000.

Half of that, or $355,875,000, will be split evenly among the top 9 teams, or $39,541,666.67 for each.
(This is normally a top 10 split, but since a team has to remain in the top 10 for 2 years straight to qualify, Marussia does not partake.)

The other half gets split as follows:
1st @ 19% = $67,616,250
2nd @ 16% = 56,940,000
3rd @ 13% = $46,263,750
4th @ 11% = $39,146,250
5th @ 10% = $35,587,500
6th @ 9% = $32,028,750
7th @ 7% = $24,911,250
8th @ 6% = $21,352,500
9th @ 5% = $17,793,750
10th @ 4% = $14,235,000

Bernie's $10,000,000 new team deal is up this year, so no more of that.

Adding it all up, the total prize money for the year:

Red Bull - $107,157,916.67
Mercedes - $96,481,666.67
Ferrari - $104,055,416.67
Lotus - $78,687,916.67
McLaren - $75,129,166.67
Force India - $71,570,416.67
Sauber - $64,452,916.67
Toro Rosso - $60,894,166.67
Williams - $57,355,416,67
Marussia - $14,235,000.00
Caterham - $0.00

[hollus]

Little wonder that Marussia and Caterham have trouble catching up with the rest. What is the point of the top-10 money limits anymore?
Had a top-12 finish been for grabs, Marussia could have made a deal with Caterham to let them by for 14M$, then both teams could split that top-10 split money 50-50, and both teams would have won 20M$. Makes no sense!

[bill shoe]

Little wonder that Marussia and Caterham have trouble catching up with the rest. What is the point of the top-10 money limits anymore?
Had a top-12 finish been for grabs, Marussia could have made a deal with Caterham to let them by for 14M$, then both teams could split that top-10 split money 50-50, and both teams would have won 20M$. Makes no sense!

Good point. Even late in the season, there theoretically should have been some negotiated finish between the two backmarkers, or even including some of the midfield teams, to ensure that Caterham got the $39 million for being in the top 10 again. I don't think there is an ethical problem with artificially manipulating the 12th place finisher if the FIA is OK with teams orders for 1st place.

I think Marussia could have logically sold 10th place in Constructors in 2013 to Caterham for the full $39 million payout, because then Caterham would have regained the potential of winning the $39 million payout again next year.

Interesting combo of game theory and economics.

[strad]

says here...Autoweek, that in 2011 Red Bull got 88.8 Million or there abouts, so allowing that it's gone up,,Pups figures seem pretty darn close to me.

[CHT]

In view of the current situation where teams like FI and Lotus are delaying the announcement of drivers line up, i am just wonder if FIA should impose a dateline (much like football) for team to confirmed their driver line up within a certain time frame so that drivers will not be forced into making a unfavorable decision due to the lack of options late in the season.

[Cold Fussion]

Why is it any of the FIA's business? There is also no standardised transfer window across European leagues, the transfer deadline for the EPL is after the second week of the season, so such a dateline would not solve the 'problem' you're trying to solve.

[tim|away]

You have to remember that teams dont gain any advantage from signing drivers very late. In fact, it can very easily work against them if the driver they are prepared to sign has already signed with a different team, therefore putting the team in a position in which they are forced to take on "left-overs" or second choices. Having said that, it's in the interest of both the driver and team to seal the contract as soon as possible, but sometimes the dynamics are rather delicate.

[CHT]

I would disagree though. At any one time, there will always be more drivers than seats available. So if a team drag the negotiation till late in the season, drivers will have very little or no choice but to agree on whatever terms teams throw at them. FI is a classic example.

[Manoah2u]

great, just what the sport needs, more control.......... just a couple of steps away from dictatorship, sure, all the teams should just bend over and let them have what's coming. pardon my french but that's absurd. What FIA should do is bring the sport back to it's feet. They should give the sport back to the sport, not to corporate and commercial business rats.
The teams need paydrivers to survive, that's the problem, so the problem is money. And they also need results to survive.
So they're in the sensitive spot of finding balance between talent and funding. A fumbling racer will cost them income.
However, to be able to provide a competitive car that can achieve results so they can get income, they need investment.
And the high costs of development and F1 today, makes them miss out on that, so they'll need paydrivers with big backing
to get the neccesary backing. It's a vicious circle, somebody needs to pop that bubble.

It's a highly unfair sport aswell, Ferrari is in the sport the longest so they should be rewarded extra compared to some 'new guys' ? Thats the problem right there. Ferrari don't need that at all. Teams like Caterham need that. It should be equal to all.

The driver entry fees are rediculously high aswell, same for team entries. They should just cut down on unnessecary investments.

the Fia should find a way on making the sport less costly, by loosening the input from the commercial part that Bernie has got his fingers in.

A dateline is rediculous, and would only put teams into an unnesseary risk by making hasty decisions.
If money wasn't the problem at lotus, the drivers would have been contracted long ago. Same goes for Sauber.

[Pup]

I'd rather see the opposite - no contracts at all.

[Sebp]

In terms of regulations I'd like to see the FIA implement a rule to ban slow drivers from the sport. Give them all a spec-car pre-season and let them choose their ride themselves afterwards depending on how quick they were.

Revolución!

[Pup]

This story says that Bernie's $10 million fund is still going, so maybe Caterham aren't completely shut out after all...

http://www.racer.com/marussia-must-wait ... le/322670/