Lotus owner calls for F1 prize money overhaul

Gerard Lopez, owner of the Lotus Formula One motor-racing team, has called for a rethink of the championship’s prize money structure if F1 is to retain all of its current teams.

With concerns continuing to grow over the cost of competing in F1, the championship’s smaller teams have criticised the way in which its prize fund distribution model heavily favours the top teams. Ferrari and Red Bull Racing last year each took home approximately £100m (€121.5m/$168.9m) from their share of the commercial rights money that is distributed to teams.

Red Bull’s Sebastian Vettel won the world drivers’ championship while the team finished top of the constructors’ championship. Ferrari’s Fernando Alonso finished second in the drivers’ championship, with Ferrari placing third in the constructors’ championship. Lotus, which placed fourth in the constructors’ championship, was awarded £40m while Caterham-Renault was given just £6m for finishing in the top 10.

Although Lotus agreed to the payment plan when it signed a bilateral agreement with F1 chief executive Bernie Ecclestone in 2012, Lopez told the Autosport website that the financial situation in Formula One has changed and has called on bosses to rethink the prize money structure.

“The sport needs to find a better way to encapsulate financial equity,” Lopez said. “What was true two years ago is maybe not true anymore – in terms of where the sport is going. Two years ago we were told the engines would last longer and be cheaper than what we had – but they are now almost twice as expensive.

“The bilaterals are what was true two years ago. What is true today is that F1 still has to attract sponsors, which it still hasn't done like it did in the early 2000's or late 1990's. That is something where two years ago people thought the world would come around.”

Lopez said F1 bosses should do more to protect the interest of all teams instead of just the top outfits. “It is not a sport that can afford to lose many, if any, teams," Lopez said. "If you were playing in the (Uefa) Champions League, and there was a risk of losing Real Madrid, Barcelona or Bayern Munich, you just could not imagine it. It should be the same way in F1.

“The idea should be to have almost a franchise system, and work out how you more equally distribute the revenues. I am not saying everyone has to get the same - but how do you make sure every team at each level has enough to sustain a good campaign and provide a good spectacle."

Meanwhile, negotiations to sell Silverstone Circuits Limited, the company that runs the UK’s Silverstone F1 motor-racing circuit, have ended without agreement. The British Racing Drivers’ Club (BRDC), which owns the land, said in a statement that its board has opted to halt efforts to sell Silverstone Circuits Limited for the time being.

The talks with an unidentified investor had been for the lease of the circuit land in addition to the sale of its wholly owned subsidiary. The BRDC has already completed a separate £32m deal with property developer MEPC for a 999-year lease on the Silverstone Industrial Estate and development land around the site. Incidentally, the deal enabled the BRDC to pay off all of its borrowings.

John Grant, chairman of the BRDC, said: “After intense efforts to secure an acceptable deal, we have not been able to bring negotiations with the second potential investor to a satisfactory conclusion. The BRDC will now retain full ownership of SCL, whose highly experienced management team will continue to operate, promote and further develop Silverstone as a premier racing destination. With or without another investor, the futures of both Silverstone and the British Grand Prix are secure.”

source: sportbusiness