CRUNCH TALKS FOR F1
Formula 1 faces a pivotal moment this week as shareholders Liberty Media and team bosses meet tomorrow to discuss plans for the future landscape of the sport.
Officials from all 10 teams will meet with F1's governing body, the FIA, and the commercial rights holder, Liberty Media, are set to meet in London tomorrow to make a breakthrough in outlining the landscape for the sport from 2021 onwards as the existing sporting, technical and commercial agreements are set to expire at the end of 2020.
One of the main talking points of the agreement will be the introduction of a budget cap and restructure of the revenue distribution.
To make the sports more competitive Liberty Media want to introduce a cap on teams' annual budgets starting in 2020 with a limit of $220 million, reducing to $185 million in 2021, then $160 million in 2021 and finally $135 million in 2023. There are going to be some major exclusions from the budget cap, such as driver and top executive salaries but the principle behind the idea is that all teams will receive $135 million or more a year from the prize funds, meaning they will be covering their costs and all additional revenues will become profits so no teams should go bankrupt.
The sticky point to the talks will be the revision of the revenue distribution. Liberty Media want to axe the special deals that previously existed so redistribution of the funds is done in a fairer way in an attempt to narrow the gap in income between the top teams and the rest. It is likely that a special deal for Ferrari will still remain in place but that it will not be as high as in previous years.
Teams that are engine suppliers will receive a $10million bonus each year but they will have to reduce the price of there engine so they are ore affordable for the lower tier teams. McLaren are pushing for an approach whereby teams have to either make their own parts, or buy standard parts from the FIA.