While the introduction of the budget cap has snapped up the lion’s share of the headlines with regards to F1’s upcoming new commercial agreement, a fresh manner in which the prize money is distributed will be just as significant a development for some teams.
With the latest agreement centres primarily around sustainability – a motivation intensified by the coronavirus crisis – F1 will introduce the much-debated cost cap in 2021 in an effort to reward teams that spend wisely rather than sizeably.
However, the new agreement will also see a new prize money structure introduced to ensure a fairer split of the pot at the end of a season.
Currently payments are granted on a sliding scale depending on where a team finished the previous season, plus another fixed revenue paid to teams that finished inside the top ten in two of the previous three seasons.
On top of that, five teams receive bonus payments (Williams, Ferrari, Mercedes, Red Bull and McLaren) based on other criteria, such as their heritage status or the size of their investment into the sport.
Notably, Ferrari receives a bonus payment in the tens of millions as a ‘Long-Standing Team’ payment to the extent that the $73m extra it was paid in 2019 meant it recovered $205m in total - $28m more than title-winners Mercedes last year.
Though the finer details of the new format haven’t been confirmed, Ross Brawn suggests it will give midfield teams a greater opportunity to close the gap to the so-called ‘big three’ of Ferrari, Mercedes and Red Bull, giving them a better chance of podiums and wins.
“There’s going to be a much more equitable prize fund in the new agreement so the midfield teams in particular are going to be much better off with their portion of the prize money,” he told Sky Sports F1.
“It’s being balanced in every direction. We’re reducing the amount of money that can be spent in F1 and we’re improving the distribution of the prize funds more evenly amongst the teams.
“So a good midfield team should be able to score podiums, maybe a win, and it should make a small profit. If we can achieve that then we have got a very sustainable future.” “We will judge at what level we should support the prize fund in the next 6-12 months because obviously if we lose teams in this period it would be a tragedy.
“We’re working very hard in a fair and equitable way amongst the teams. I think Liberty have shown their strength to create the funds available and we just need to see how things now develop.”