The FIA, the governing body of world motorsport, has recently addressed the financial challenges it has been facing, contradicting former President Jean Todt’s claims about the organization’s financial health, and criticising the current President’s tenure.
This response comes after Todt’s interview with “L’Equipe,” where he criticised current President Mohammed Ben Sulayem’s remarks about inheriting a significant financial deficit upon his election in 2021.
Todt had downplayed the severity of the financial issues, attributing any negative balances to the COVID-19 crisis and asserting that the association’s finances were largely positive every year, except for the last two of his tenure. He emphasised that the pandemic could have ended the association if not for swift actions that allowed Formula 1 to continue despite lockdowns.
“Every year the balances have been largely positive, with the exception of the last two years, which were marked by the COVID crisis, which could have spelled the end of the association if we had not succeeded” says Todt,
“To quickly create the conditions that will allow Formula 1 to continue as the first international competition despite the lockdowns.”
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FIA responds to Todt’s claims
However, the FIA has provided a different perspective, revealing a more troubling financial scenario. The organisation disclosed that upon Sulayem’s arrival, it was grappling with an “unsatisfactory and unsustainable” financial situation.
This is supported by the FIA’s audited annual accounts, which show operating losses of 12.8 million euros in 2019, 22.1 million euros in 2020, and 24 million euros in 2021.
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Under Sulayem’s leadership, the FIA has made strides in reducing its operating loss to 7.7 million euros in 2022 and projects a loss of only 3 million euros for 2023. The goal is to continue reducing the deficit in 2024 and achieve break-even operating results by 2025.
An FIA spokesperson stressed the seriousness of the financial plight faced by the new management team, stating, “The association has made significant losses.”.
“As the FIA President explained during the week of the Annual General Meeting in Baku, the FIA transparently disclosed that shortly after the new presidential team took office “
“An unsatisfactory and untenable financial situation has been identified,” said the spokesman.
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FIA must create some surplus revenue
The spokesperson further explained that while the FIA is not a profit-oriented organisation, it needs to at least balance its books and ideally generate a surplus. This surplus is crucial for unforeseen events, investments in research and development in safety, technology, and regulation, and supporting member clubs.
“Management’s job is to maintain the FIA and although we are not for profit, we must at least have a balanced balance sheet and ideally generate a surplus to strengthen equity capital for unforeseen events and in research and development in the areas,
“To invest in safety, technology and regulation in the areas of sport and mobility and fulfill our main goal of supporting our member clubs.”
“We will publish the figures for 2021-22 in the coming weeks and the figures for 2023 in mid-June 2024 on the occasion of the extraordinary general meeting,” the spokesman continued.
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Future FIA plans
The FIA plans to publish the financial figures for 2021-22 in the coming weeks and the 2023 figures in mid-June 2024, during an extraordinary general meeting. President Sulayem has been candid about the financial challenges, admitting that the FIA faced a deficit even before the pandemic, but he remains optimistic about having brought the situation under control.
“There was a financial problem that we didn’t know about,” he said a few months after taking office.
“We had a deficit even before the pandemic, but I’m glad we’ve gotten it under control now.”
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