29 April 2013
F1 prize fund limited to top ten teams
The team finishing last in the constructors' championship will no longer receive 'prize money', under a new directive guided by F1's flotation plans.
This year's battle between Caterham and Marussia has been ramped up a notch by the revelation that the team finishing last in this year's F1 world championship will not receive a share of the sport's prize fund.
The decision, which coincides with the absence of a new Concorde Agreement to replace the version which expired at the end of last season, will see the team finishing eleventh in the constructors' standings miss out on the $10m 'consolation' payment that has been on offer to teams finishing outside the top ten over the past three seasons, since Caterham, Marussia and the now defunct HRT squads debuted in 2010. The total prize fund is reckoned to stand at $698.5m.
The decision, according to F1 ringmaster Bernie Ecclestone, is the result of the sport's parent company Delta Topco voting to move forward with the Initial Public Offering first explored a couple of years ago. The flotation, thought to be worth £6.5bn, is expected to take place on the Singapore stock market before the end of 2013.
F1 prize money is Delta Topco's single biggest outlay and, with the fund increasing from 50 per cent of the sport's operating profit to 63 per cent this year, Ecclestone says that the changes have been made to prevent it rising further. Ten of the eleven teams currently competing have signed commercial agreements with the octogenarian, but Marussia is not one of them. A new Concorde Agreement has been passed by the teams, but has yet to be ratified as the remaining signatories, Ecclestone and the FIA, continue to work through their own issues.
“[Marussia] don't have a commercial agreement because they are not in the top ten,” Ecclestone said of the latest situation in the wake of the expiry of the Concorde Agreement, “We pay the top ten, that's what we do. For three years, we did something different because we had an agreement with [former FIA president] Max [Mosley] but, from now on, we will pay the top ten and that is it.”
Speaking to Britain's Daily Telegraph newspaper, Ecclestone also confirmed that the flotation, which was put on hold by the sport's commercial rights holder CVC at a similar stage last year, will definitely happen this time following the creation of Jersey-based CVC Delta Topco Nominee. CVC cut its stake in the sport by around 50 per cent by selling some of its holding to financial groups.
“We have agreed to do it,” Ecclestone said of the flotation, “It will happen this year and it will be up and running. CVC is getting on with it and putting all the bits and pieces together that they have to.”
According to the latest figures, F1 holds around $300m in cash, but also has $3.2bn in loans, including the debt incurred in financing CVC's acquisition of the sport in 2006. The latest accounts published on behalf of Delta Topco – to the end of 2011 - show pre-tax profits of $474.4m.
Having lost out to Caterham in each of the first three years of its existence, Marussia – which began life as Virgin Racing - is currently leading the battle for tenth place in the 2013 constructors' championship, on the basis of rookie Jules Bianchi's 13th-place finish in Malaysia. Neither team has yet scored a point in F1, and remain scoreless in 2013, along with Williams.
Amid speculation that Ecclestone is angling after a ten-team field for F1 going forward – ironic after the attempts that went into offering up extra places to fill the void left by the successive exits of Honda and Toyota – the perennial backmarkers were reported to have discussed a merger during the winter, but talks came to nothing and both continue to compete separately.
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