Thursday, 27 April, 2017

Ecclestone wants Formula 1 to Adopt Premier League Revenue Distribution Model

Ecclestone wants Formula 1 to Adopt Premier League Revenue Distribution Model Ecclestone wants Formula 1 to Adopt Premier League Revenue Distribution Model
Kristopher Love | 29 June, 2016, 13:14

For a while now, Bernie Ecclestone has been working to make some drastic changes to Formula One. In particular, he has made it his goal to ensure that all teams receive equal revenue distribution. This means altering the way Formula One hands out Prize money. Though, anyone playing the Formula 1 racing odds is unlikely to favor Bernie’s success in his efforts.

For Bernie, Formula One must make an effort to adopt a Premier League approach to distributing revenue. And making these changes wouldn’t be without a cost. But it is a cost that Bernie has not only thought out but which he clearly thinks should be paid, admitting in a report in The Times that he understands and accepts the consequence of removing the bonus payments that larger teams receive in a favor of a fairer distribution model.

If a report from Autosport released earlier this year is to be believed, and there is no reason why they would lie, Formula One teams are looking to share amongst themselves payments amounting to $965 million.

The Formula One Management is set to pay Ferrari a whopping $192 million. This is partly due to an agreed bonus from Ecclestone where a $105 million payment must be made regardless of Ferrari’s championship position.

Mercedes, Red Bull, McLaren and Williams will follow Ferrari, receiving $74M, $74M, $32M and $10M respective, their bonuses being paid on top of each team’s performance-based prize money.

It is difficult to determine whether Ecclestone’s activities are driven by altruistic reasons or as a response to a change in the tides with regards to the opinions surrounding Formula One’s approach to revenue distribution.

After all, it wasn’t that long ago that Sauber and Force India reached out to the European Union to raise the issue, their complaint about Formula One’s unfair distribution of prize money last year seemingly driving Ecclestone to seek a fairer approach to sharing the finds.

According to Ecclestone, he told Toto Wolff to hold off on taking any notable actions with the money they had on hand, at least until he had time to look at the state of things at Formula One and determine if he could find a more effective means of equally redistributing funds to the teams involved. 

According to The Times, Ecclestone is taking a real close look at the way the Premier League deals with the redistribution of prize money, possibly even thinking about adopting a similar model with Formula One. Ecclestone admits that his suggestions will not pass without a fight. He understands that as many people as he expects to support his approach, there are those who will oppose him fervently.

If the Formula One Management was to begin utilizing a fairer distribution model, then every team would expect to receive $96M this year. Of the ten teams with commercial deals, seven of them receive considerably less money than this amount.

Ecclestone wants people to start looking at the Premier League, where all overseas Broadcast revenues are shared equally among the football clubs in the league, this along with a sizeable percentage of the UK broadcast revenues.