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Fears persist that F1 costs are 'simply running away'

The money the teams receive from the sport has increased in recent years, with a report in Britain's Daily Telegraph claiming that the 'hundreds of millions of pounds in dividends paid out from F1's profits' received by majority shareholder CVC 'still comes to around the same as the team prize money payments since the private equity firm took over'. According to the figures in the report, the amount received by the teams 'rose by £292.9m ($450.5m) to £454m ($698.5m) in just the four years to 2011'.

Pitpass business editor Christian Sylt recently revealed that F1's 2011 UK corporation tax payments were just £945,663 on pre-tax profits of £305.6m, as a result of loopholes apparently approved by HM Revenue & Customs, while CVC has also taken advantage of low interest rates to refinance the sport's £1.6bn ($2.5bn) debt and reduce its borrowing costs by paying back the existing loan and taking out a new one at the better rates on offer.

Although the $2.5bn of net debt remains, CVC claims that a two per cent reduction in interest rates shaves around $50m a year off its costs.




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Mustafur

July 30, 2013 11:20 AM

Its the double edged sword of modern F1, you can either go the technology route and be more like how F1 has always been and Risk losing half the grid because of costs, or go the spec route and start being like every other series and have more teams. I would rather the technology route but as its been proven its nearly impossible to get a middle ground. But then agian if FOM wasn't soo damn greedy and gave the teams a decent percentage of Revenue then we wouldn't have that issue and then teams would be able to hire talent first rather then by paycheque.

joat

July 29, 2013 4:45 PM

A good point and a grim reminder no body is in control. If there was, the engines would remain the same cos as its pointed out the new powerplants will cost more and do less.



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