The relationship between the FIA, F1’s governing body, and the sport’s commercial rights owner has ebbed and flowed over the decades.
In recent times the FIA has been fairly acquiescent to the needs of Ecclestone/CVC but change is in the air. Jean Todt having served his maximum 3 terms as head of the FIA has gone and so has the Ecclestone led owner of F1’s commercial rights.
It would be fair to observe, Todt was pretty compliant to the demands of Ecclestone and CVC, but there’s a new boy in town and the tension is rising.
The FIA and FOM (commercial rights owner) have tended to vote ‘en bloc’ when the sport’s commission has been called upon to make decisions. This week everything changed.
At a meeting in of The Commission in London last week, the teams and Liberty Media decided to extend the number of sprint races in 2023 from 3 to 6, but the new FIA president Mohammed Bin Sulahem blocked this motion.
Sources have revealed he is trying to secure more finance from F1 to agree the proposal.
Dieter Renken’s expert analysis of this historic relationship in his Racingnews365 article is well worth a read.
As the latest holders of F1’s commercial rights, Liberty Media has set about revolutionising the sport and inevitably driving bigger revenues. The calendar now has increased to an agreed 24 races and new race promoters have been accepted with Miami debuting this season and Las Vegas set for 2023.
Renken observes, “The problem is that of the $2bn [Liberty Media receives], the FIA sees very little, being remunerated only to administer and regulate the championship. The original fee was donated to the (ringfenced) FIA Foundation by Mosley, so the current administration has no access to those funds for operational purposes.”
With a projected loss of $25m this year, Sulahem is looking to F1 for incremental revenue and of course Liberty Media are reticent to deliver this.
“The imbalance is likely to continue for the next 90 years, being the balance of the 113-year contract struck by Ecclestone and Mosley,” says Renken.
The problem for new boy Sulhem is he risks alienating the FIA from the rest of the F1 stakeholders and a breakaway series where the FIA gets even less or nothing of the cash pile F1 makes.
Whilst at present EU law makes a breakaway difficult, Renken suggests, “the governing body could be forced to approve the [new] series provided FIA safety standards are adhered to and the F1 trademark is not used – but the thought has surely crossed a few minds. GP1, anyone?”