Formula 1 prize-money distribution reforms on the table
Mercedes team chief Toto Wolff has confirmed that Formula One commercial ring-master Bernie Ecclestone has discussed reforms to the structure and distribution of the sport’s prize money.
Wolff said he met the Briton on Thursday and talked about ‘various models’ for the future as the sport prepares to move to a fairer and more even distribution of its growing income and wealth.
He said the key factor was to add more value to teams’ performance and less on a team’s history in the sport.
“I think it’s in everybody’s interests to have stability long-term and we discussed various models,” Wolff told reporters on Friday when torrential rain interrupted Austrian Grand Prix second practice.
“I think we can build it on various pillars. We can build it on a base payment, which is important, to know what you have, on a performance based payment and on historical performance. So I would say three elements are the right way, going forward.”
Wolff added that he believed Formula One’s income was growing, “The income is growing, Bernie’s business is profitable and is going up every year and the income we’re able to generate out of TV, sponsorship and sanction fees is growing every year.
“I remember when I was at Williams, in 2009, a fifth-placed team would get $35 to %40 million. Today, a fifth-placed team probably generates 30 or 40 percent more.
“This is because the prize fund is growing and Bernie is growing the business very profitably. The contracts are all long-term contracts, they’ve just signed a new TV deal It’s pretty visible that the business is solid.”
Wolff confirmed also that his Mercedes team had surprised Ecclestone by winning two championships in succession, the Briton having agreed to make bigger payments to the team if they were successful.
“We got additional prize fund because we performed. He thought we would never win two seasons in a row.”
He welcomed the approach that Ecclestone was taking for reforming the payments structure, “You need to take the variables and put them together and ask what multiple is applied – historic value, for example, historic performance and current performance.”
He conceded that Ferrari was the most important team and should retain its special position that has enabled them to enjoy extra payments.
“I think it’s very clear that Ferrari is the most iconic team and they will have no problem to argue that they had historic performance and have tremendous value to the sport,” he explained. “I don’t see any issue there ”
He added that there was no prospect of any of the leading teams, including Mercedes, rushing into a new deal on prize-money distribution. He stressed, instead, that it was important that the growing wealth was more evenly distributed to enable stability.
“Times are different,” he said. “The world is more transparent. We are all stakeholders in the sport.”