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09/12/2016

F1 teams file EU complaint over ‘unlawful’ revenue sharing

Sports

F1 teams file EU complaint over ‘unlawful’ revenue sharing

Sebastian Vettel during a qualifying session at the 2012 Formula 1 Japanese Grand Prix.

[Michael Elleray/Flickr]

The Sauber and Force India teams have filed a complaint with European Union authorities about what they see as unfair and “unlawful” practices in Formula One’s governance and distribution of revenues.

“We have received a complaint and will assess it,” a competition commission spokesman said on Tuesday (29 September).

Force India deputy principal Bob Fernley confirmed separately that his team and Swiss-based Sauber, two of the smallest competing against rivals with far greater resources, were involved.

The complaint comes at a delicate time for Formula One, with several teams struggling to stay afloat while a major rules revamp is under discussion for 2017.

The sport’s ownership has also been in the spotlight, with media speculation that RSE Ventures, the investment vehicle of Miami Dolphins owner Stephen Ross, and Qatar are lining up a potential $7 billion-$8 billion takeover deal.

Ferrari, whose team receive special payments to reflect their status as the oldest and most successful in Formula One, are meanwhile lining up a flotation in New York.

Financially-troubled Lotus, who joined Force India and Sauber in November by writing to F1 commercial supremo Bernie Ecclestone, are being taken over by Renault and were not signatories to the complaint filed on Monday.

That November letter to Ecclestone had spoken of “a questionable cartel” controlling “both the governance of Formula One and, apparently, the distribution of…funds.”

Special payments

Top teams Mercedes, Ferrari, McLaren, Williams and Red Bull receive special payments and sit with the commercial rights holder and governing FIA on the sport’s core decision-making ‘strategy group’ – which this year includes Force India.

The smaller teams say the system is skewed unfairly in favour of the big ones who are guaranteed millions of dollars regardless of how they perform on the track and also get to determine future changes.

Britain’s Autosport magazine reported last year that Ferrari’s share of the revenues came to an estimated $166 million in 2013, including a $32 million bonus and $62 million special payout.

Force India were paid $59 million, Sauber $52 million.

A briefing note to the EU complaint, published in the Times newspaper on Tuesday, spoke of “unfair” side payments which put the independent teams “at a perpetual sporting and economic disadvantage”.

It said the Strategy Group allowed the biggest teams to “steer the rules and technological developments to their own advantage, further entrenching their sporting chances and further undermining equality between the teams.

“These unlawful practices hurt the sport, its participants and the many thousands of people in and around Formula One and the many millions of European fans,” it said.

Ecclestone, 84, has dismissed talk of a ‘cartel’, and played down the significance of any complaint to Brussels.

“They (the teams) all signed contracts. I hope the complaint goes ahead and the competition authorities have enough patience and time to deal with it,” he said earlier in the year.