Friday, October 3, 2008

It's about time they shared the money

Formula One is finally starting to make some sense in terms of really trying to help the smaller teams. The new Formula One Teams' Association (FOTA) is considering this week a restructuring of how the prize money is to be divided. Instead of dividing the money where payments are weighted on a team's final constructors' championship position, they are thinking about dividing the money more equally. Currently, the higher a team finishes in the constructors' championship, the bigger share they get of the estimated $500 million (USD) revenue that is currently given to them by Formula One Management (FOM). Bernie Ecclestone, who heads the FOM proposed and supports this redistribution and it is gaining support from the teams as well.

One team principal source told "This would be a good way of securing the finances of all teams, without hindering those at the front. Teams that win are able to command more sponsorship money than those at the back anyway, so there will always be benefits to winning."

I discussed this money sharing in a September post regarding budget caps in that I said if Formula One is to have an effective cap system there had to be better revenue sharing and if the sport wanted to really save independent teams as well as control costs more effectively, they would give smaller teams an equal share of the TV money to help supplement team budgets. This sort of system is in place in the National Football League (NFL) and in the NFL, everyone makes money and no one is in danger of going bankrupt ala Super Aguri did this season.

This is simply a common sense approach to the growth and sustainability of Formula One and should have been thought about years ago. There is no need for slash and burn cost cutting policies. There just needs to be better sharing the hundreds of millions of dollars that is flowing into the sport.

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