F1 team payments fall in first year of Liberty ownership
The first rule to keeping F1 teams happy is paying them at least as much as last year.
If Liberty Media were enjoying the final moments of their honeymoon period with Formula 1 teams, it now looks as though reality is about to kick in.
The reason? Unsurprisingly, it’s about money.
Liberty CEO Chase Carey with Bernie Ecclestone. Pic: Sutton Images
It has been revealed that Liberty’s first year in charge of the sport saw teams receive a combined $47 million less between them than they took home 2016. That represents a five percent drop – and it’s the first time their income has decreased.
This comes with Liberty announcing that 2017 saw a $12 million fall in overall revenue, the biggest decrease of the past decade.
This was caused by a number of factors, including a temporary shift from 21 races to 20, a lower sanctioning fee for the Brazilian Grand Prix agreed by Bernie Ecclestone, and the departure of sponsors Allianz and UBS.
Liberty have also invested in areas that Ecclestone did not, such as adding significant numbers of new staff to work on F1’s media coverage. According to a report by Forbes fan engagement and filming in Ultra High-Definition have also driven Liberty’s costs up.
The F1 Live event in London was not cheap, but it was excellent for fan engagement. Pic: Sutton Images
F1 CEO Chase Carey is quoted by Autosport as saying that he wants "to improve our balance sheet and maximise our long-term cashflow” in 2018.
"We were positively surprised by the excitement from existing partners to expand and grow their relationships with us, and the level of interest from new commercial sponsors," continued Carey.
"There's real enthusiasm from new potential sponsors, promoters and video entities to engage with F1.
"Many of these will take time to develop in the right way, and our priority again is building long-term value, not a short-term buck."
The news comes at a time when Ferrari are threatening to walk away from F1 over the terms of their payments – though this has almost always been the case with the Italian squad throughout their spell in the sport.
Nevertheless, Liberty will need to work hard to ensure the teams stay on their side. Whatever Bernie’s faults he knew that keeping the teams sweet was vital, and that the way to keep them sweet was by paying them well.