Bernie Ecclestone is not only the F1 ringmaster, but he also is the keeper of the key to the vaults of cash owed to the teams. Whilst the rules are a little complicated, nearly all the teams get a guaranteed equal annual amount which represents about 50% of the revenues paid out to the teams. Presently this is around $42m.
However, when there have been more than ten teams in previous years, the 11 place team gets nothing – unless Bernie decides to make them an ex Gratia payment.
The prize money pot of around $420m is then distributed based upon the constructor’s position in the end of season rankings. Ferrari get $90m for being Ferrari (and a veto) and then there is a constructors’ championship bonus fund of $135m which pays Ferrari, Red Bull, McLaren, Mercedes and Williams previously winning constructor titles.
All in all this adds up to $1.125bn paid to the teams which Bernie believes makes them ‘richer than god’.
The problem is, the teams only receive their share of the monies due from the prize fund the FOLLOWING YEAR. Prize fund and other monies are paid to each team in equal instalments from March to November.
This caused Force India significant difficulties over the last winter period. Following the collapse of Caterham, suppliers refused Force India and other mid-field teams the kind of credit they usually allow. This saw the Force India chassis impounded for weeks and failed to make winter testing. So while the teams are waiting for benevolence fund payments to kick in, they are at the most costly point of the year. Some estimates have suggested up to 70% of a smaller teams annual budget is spent during the winter months.
Force India have again been forced to ask Ecclestone for an ‘advance’ on their monies due, to cover the winter expenses. Force India’s Bob Fernley explains the difficulties they face: “But this is not necessarily about us, it’s about making our suppliers’ lives a bit easier. They are under a lot of pressure, and can be stretched too far, especially when other teams are struggling as well.
“We’re trying to get ahead of our programme, as opposed to last year when we were slightly behind it. We just have to be pragmatic because if we know now we’re going to have to tighten up a bit then we have to act.”
Ecclestone has informed the other teams of the Force India request, and is claiming he requires unanimous agreement from the other 9 competitors before he can release the funds requested by the Silverstone based outfit. However, last year when asked, Ecclestone unilaterally intervened, so the process by which all the other competitors are polled on the issue – is simply likely to receive more claims for early payment.
It may be beneficial for Ecclestone to act in a supportive manner, given the complaint against him and the FOM group currently before the EU Commission. The Bernie of old would most likely have used this opportunity to kill of Bob and the Silverstone crew, yet with Red Bull Racing’s future still in limbo, Ecclestone can’t afford to be reckless.
One thing is for certain, the once King of good times is either in no position to – or has no interest in – lending his own team any money in the meantime.
So the question to you the TJ13 jury is, should the teams receive their money up front at the start of each year – or is phasing the payments an appropriate way of ensuring the teams don’t blow all their cash at once?