Friday’s presentation of proposals from the league to its teams for 2021 and beyond should be taken with a grain of salt. The official statement was bland and lacking detail, teams aren’t willing to talk at all, and few of the smaller operations have said they are delighted at the proposals.
That sort of secrecy is by design.
It is a reflection of Liberty Media’s philosophy that deals should be completed before they are announced and that no one needs to know what is happening until everything has been completed. If it were left to Liberty, there would likely have not been an announcement at all. However, they accept that F1 is so high-profile that they needed to release something, if only to stop unhelpful speculation.
Sources suggest that the presentation was much more detailed than the press statement indicated and that it went as far as to include the planned financial breakdowns that Liberty Media is going to offer to teams in the next commercial agreement. The regulations will be based on performance, something the biggest teams do not want to see because of the advantages they enjoy as a result of the previous agreements crafted by Bernie Ecclestone.
Ferrari has the most to lose, with an estimated $68 million from what is known as the “Longest Standing Team” payment, which is 5 percent of the overall revenue, which only The Scuderia benefits from. Ferrari also receives $35 million from what is called the “Constructors’ Championship Bonus Fund,” which means that the Italian team is getting $103 million over and above the $78 million in regular prize money.
Mercedes gets $39 million from the “Constructors’ Championship Bonus Fund” and another $35 million from what is called the “Double Champion Bonus,” which means it takes $74 million in addition to the $97 million won in prize money.
Red Bull Racing gets a similar payout, but last year won only $88 million in regular prize money. The other teams with special deals are McLaren, which receives $30 million from the “Constructors’ Championship Bonus Fund” and Williams, which gets a $10 million heritage payment.
Under the new distribution, these would all probably be lost, but obviously Liberty is offering better deals to most of the teams because Claire Williams was of the principals who said they were “delighted” with the proposal.
What Liberty Media wants to avoid at all costs is an alliance of the manufacturers against their proposal. The word from the paddock is that the presentation began with a quote from a 2016 Daimler strategic analysis of what the company wanted from F1 in the future for its Mercedes brand, which was prepared for the previous owners of F1’s management group. That presentation mirrored the type of changes Liberty is currently pushing for. This came as something of a shock for Mercedes, which has been fairly vocal in its support of Ferrari in recent weeks.
In short, this considerably undermined the Mercedes public position.
Mercedes principal Toto Wolff did say that the meeting was “positive” and that Mercedes “needed time to digest the proposals,” but it placed him in a difficult position. Ferrari boss Sergio Marchionne remains stridently opposed to any change and is threatening to take the company out of the sport.
However, Marchionne is not the owner of Ferrari and has to answer to company shareholders, led by the Agnelli family. Marchionne has done a good job for them with his management of the Fiat and Ferrari empires, but it will be interesting to see if they think Marchionne’s hardline stance is a good policy.
Whatever else, it would be wise for Marchionne not to underestimate Chase Carey and the current leaders of the sport