If you’ve been following the financial side of Formula One, you may recall that Marussia had not signed a commercial agreement heading into the 2013 season. It prompted team boss John Booth to say:
“No [it’s not vital for Marussia ahead of Australia],” he added. “It’s vital for Bernie because he won’t be able to film us without it.”
Our friend, Christian Sylt, caught up with the soon-to-be 83-year-old ring leader of the world’s most advanced form of racing and discovered the reason for the lack of a commercial agreement between Marussia and Formula 1:
“they don’t have a commercial agreement because they are not in the top ten. We pay the top ten, that’s what we do. For three years we did something different because we had an agreement with Max but from now on we will pay the top ten and that is it.”
The reason given had to do with the new team entering F1 as arranged by former FIA president Max Mosley. According to Ecclestone, the commercial payout was arranged for all of the teams to help the minnows afford their involvement in the series but the escalating costs of the team compensation has prompted F1 owners to re-think that arrangement when it expired at the end of last year.
According to Sylt, the issue tied to the planned flotation of the Formula One later this year. In order to tactically position the series for an Initial Public Offering or IPO, the ownership group signed separate commercial compensation agreements with each team… each team from 1st through 10th that is. Teams outside the top 10 will no longer receive a payout or portion fo the TV revenue generated. Per the original arrangement, this would have a $10 million impact on a team like Marussia or whomever finishes last in the constructor’s championship. That’s a lot of dosh for a team struggling to stay afloat.
What kind of money are we talking about? The new arrangement has 63% of the revenue generated in F1 to be paid out to the participating teams. This equals $698.5m and will benefit the top 10 teams. This makes Caterham F1 driver Vitaly Petrov’s performance in the final race of the 2012 season such a death blow to Marussia. Petrov passed Marussia driver Charles Pic in the waning laps of the final race of the season in Brazil to snatch 10th place away from the team. As hurtful as that may be, irony would have Petrov without a ride at Caterham in 2013 and Pic moving to fill his seat.
Every single point counts in Formula One and while many suggest it is too early to institute team orders in Red Bull’s infamous Webber/Vettel saga, the reality is that it is never too early to secure points as much and frequently as possible starting at the first race of the season. While Marussia must be frustrated with the new financial arrangement, the start of the 2013 season has seen them outperforming Caterham in the first three races but the team in green have fought back and finished ahead of Marussia in the last race in Bahrain.
One wonders if Marussia or Caterham will find the courage and financial wherewithal to stay in F1 if they finish 11th and are bereft of the $10m they desperately need?