A looming dispute appears on the horizon between Formula 1’s regulatory body, the FIA, and Liberty Media, the commercial rights holder, over the division of the sport’s burgeoning revenues. As the expiration of the current Concorde Agreement in 2025 approaches, the stage is set for potentially contentious negotiations.
Peter Bayer, the new CEO of the RB team, highlighted the ongoing nature of these discussions, stating, “I think it’s an ongoing process, and last time it took around two years. I hope this time we’ll be getting it done faster, but it’s something that will be discussed behind closed doors with the responsible people.”
Greg Maffei, CEO of Liberty Media, has expressed a desire to expedite the negotiation process, keen to “strike while the iron is hot,” contrasting with FIA president Mohammed Ben Sulayem’s stance of no urgency. Ben Sulayem emphasizes collaboration and empowerment of the FIA, stating, “If you want a strong FIA, we have to work together and we have to empower the FIA, because the FIA is the regulatory body.”
As Formula 1’s commercial income surpasses the $3.2 billion mark annually, insiders close to Ben Sulayem suggest the FIA aims to secure a more significant portion of this financial windfall. This ambition may be driving the apparent rift between the FIA, the teams, and Liberty Media.
Manuel Avino, one of Ben Sulayem’s vice presidents, pointed out the FIA’s financial challenges upon their arrival, with annual losses of 30 million euros threatening the organization’s solvency. “That would have placed the FIA in absolute bankruptcy in four years and that is why they have had to change many things. We had lived many years in which the president or the previous governing team fled from confrontation with many promoters and from many situations,” Avino explained to Soy Motor.
Avino argues for the FIA’s right to a fair share of F1’s profits, stating, “Sometimes, one has to position oneself outside the comfort zone and claim their rights – what belongs to us. That sometimes makes the promoter or in this case Liberty Media uncomfortable.”
The upcoming Concorde negotiations are expected to see Ben Sulayem advocate for a more equitable distribution of F1’s wealth, challenging Liberty Media’s financial dominance. “The promoter of Formula 1 is becoming a billionaire at the expense of a product that belongs to the FIA,” Avino remarked, adding, “80 percent of the FIA budget comes from F1, and now we do not find it fair that from all that wealth that is being generated by Formula 1, nothing is shared with the FIA.”
Avino insists on a constructive approach to negotiations, aiming for reinvestment in competition without fostering enmity: “Our president is demanding that what is ours be returned to us, because the FIA is a non-profit entity that wants to reinvest in competition. There is no enmity nor confrontation.”
GMM
