Liberty Media’s dig at Ferrari really wasn’t smart
Formula One’s new majority shareholders, Liberty Media, have had a dig at Ferrari claiming they should desire a fairer distribution of the sport’s revenue.
In an interview with Forbes, chief executive Greg Maffei spoke of the company’s aim to improve competitiveness by ending the current system of historical payments.
This would then be given to the smaller teams who would not just have a better chance of competing but, more simply, a better chance of surviving.
Manor Racing is currently in partial administration with talks ongoing to secure a buyer while Sauber also needed investment, which resulted in new owners, just to continue racing.
At the same time, Ferrari received $100 million according to Forbes before prize money and other sources of revenue are added.
To be clear, the Italian marque is not the only team to receive this privilege but they do receive the largest slice of the financial pie.
It is the reason why Maffei targeted the Maranello outfit when speaking about the distribution of income, believing a better product would increase other revenue streams and make up for the loss of the historical bonus.
“If you’re Ferrari, you have enormous sponsorship revenue that goes directly to you,” he said. “That’s going to be impacted more positively by great races.
“So thinking about balancing the team payments, so they’re a little more balanced and creates more fairness, has to be weighed, in Ferrari’s mind, I would expect, by the fact that creating a great platform helps our sponsorship revenue, too, so there’s give-and-take.”
The idea, in theory, would make sense and is something many have wanted to see for some time, however, in reality, all it could do is open a can of worms that F1 has had to deal with before.
There’s no doubt that Liberty Media are keen to put their mark on their new purchase as quickly as possible, the reported speed in which Bernie Ecclestone could be shifted out barely a week before receiving the final go-ahead is proof of that.
But what they are about to realise is the main problems in F1 don’t lie with Bernie, even if he arguably let them happen, but instead with those who have gained great power in recent years.
There’s a reason Ferrari, Mercedes, Red Bull and others have obtained the financial clout they have over the smaller teams on the grid.
Ferrari, in particular, forced Ecclestone and the FIA’s hand with threats of a breakaway series which came closer to being followed through than some might care to admit.
Given there is already some discontent by some about F1’s current direction or lack thereof, for Liberty to poke the bear, Ferrari, with these comments having only just put a foot through the door is a brave and maybe foolish first step.
Yes, many believe their arrival can lead to the modernisation of a model and a product that has failed to keep up through the short-sightedness of its leader, but what has Liberty done so far for Ferrari and others to suddenly change their position?
The financial aspect is one that Liberty desperately need to address and are right to point out. But Maffei would have been far more sensible to allow his company to introduce changes step by step and build a case rather than immediately singling out Ferrari.
It arguably shows a lack of knowledge about what it is they are buying, given the last threats by Ferrari and others was as recent as 2009. Surely, Liberty looked back, saw that and considered their approach to the matter?
The best chance for the introduction of such change is 2020 when the current Concorde Agreement expires. Efforts should be made to build towards that date and the implementation of the system Liberty wants to introduce.
Certainly, storming in and suggesting Ferrari should consider relinquishing one of their most lucrative terms is certainly not the approach many would take.
It will be interesting to see if the president Sergio Marchionne does decide to respond. Hopefully, he will give a little leniency because if this is the path Liberty does decide to take, it will be a very bumpy one and the last thing F1 needs is to be tearing itself further if not completely apart.