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European Union's Possible F1 Investigation
09-29-2015, 10:15 AM
Post: #1
European Union's Possible F1 Investigation
Motorsport.com:

Formula 1's governance structure and prize money system is set to be investigated by the European Union, after Sauber and Force India lodged an official complaint on anti-competition grounds.

Following months of speculation that teams could go to the EU over their belief F1 was being run like a cartel, the two outfits have gone ahead and registered their unhappiness.

The move is believed to be aimed at several key issues, including that only the big teams have a say in F1's Strategy Group and that the prize money structure is weighted heavily in favour of the front-running outfits.

A statement from Force India said: "Sahara Force India is one of two teams to have registered a complaint with the European Union questioning the governance of Formula 1 and showing that the system of dividing revenues and determining how Formula 1's rules are set is both unfair and unlawful.

"Due to the ongoing legal discussions, it would be inappropriate to comment further at this time."

EU could force change

If the EU decides that Force India and Sauber's complaints are justified then it could intervene and force changes in the sport.

That could have dramatic implications for its owners as well as all teams.

A few months ago, Labour MEP Anneliese Dodds, who herself wrote to European competition commissioner Margrethe Vestager last year, said that it was up to the teams to force an EU investigation.

"Ever since the collapse of Marussia and Caterham last year, I have had real concerns about the way things are going with Formula 1," she said.

"This doesn't just mean two fewer teams taking part in races throughout the season; it means hundreds of highly skilled people in my constituency losing their jobs and their livelihoods.

"That's why I've raised this issue a number of times in Brussels, to see if there is a competition case to answer here.

"The Commissioner in charge has made it clear to me that she can't do anything until the teams themselves submit a formal complaint, and so if that's what the teams feel is right then that is what they should do."

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09-29-2015, 12:01 PM
Post: #2
RE: European Union's Possible F1 Investigation
Meanwhile Bernie gets ready to tear up some contracts and make a discounted bid for the commercial rights from CVC.
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09-29-2015, 01:42 PM
Post: #3
RE: European Union's Possible F1 Investigation
This will hand more power back to Bernie. Worst thing the EU can do is a 10% fine on turnover. So FOM pay 100 million which they just take off the teams.

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09-29-2015, 04:18 PM
Post: #4
RE: European Union's Possible F1 Investigation
they had me up until they complained about the teams that win getting better prizes. how do they think prizes work?
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09-29-2015, 04:50 PM
Post: #5
RE: European Union's Possible F1 Investigation
I think when the ratios are this biased. Is Ferrari worth 9 times Williams? How did RBR get there?

[Image: v8dl5u.jpg]

The good news about a bit of court action is we will get some more figures like this.

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09-29-2015, 05:05 PM
Post: #6
RE: European Union's Possible F1 Investigation
i don't understand that chart. where did it come from? what does "col 1/2" mean? what determines how much "premium" money a team gets?
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09-29-2015, 07:57 PM (This post was last modified: 09-29-2015 08:13 PM by Neonzapper.)
Post: #7
RE: European Union's Possible F1 Investigation
(09-29-2015 05:05 PM)frankdouglason Wrote:  i don't understand that chart. where did it come from? what does "col 1/2" mean? what determines how much "premium" money a team gets?
Total ($m) - Col 1/2 ($m) = Premium ($m)
Premium ($m) + Col 1/2 ($m) = Total ($m)
Explanation: https://joesaward.wordpress.com/2013/11/...from-2013/

I can see howMercedes can afford to pay Hamilton's $50M/yr salary- or nearly a cool $1m/week.

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09-29-2015, 09:58 PM
Post: #8
RE: European Union's Possible F1 Investigation
okay, we're getting closer. i now understand that the col 1/2 column is the sum of the column 1 and column 2 payments, which i feel is unnecessarily confusing given that neither column 1 nor column 2 are on the same chart as the col 1/2 column and that the col 1/2 column uses the symbol for division to denote addition.

unless i missed something, though, we still lack an explanation of how the premium money is doled out.



as an aside, it's so typical of joe saward to chide his peers for lazily writing unsubstantiated rubbish about f1 on the internet, and then proceed to write about f1 on the internet without citing any sources.
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09-29-2015, 11:00 PM
Post: #9
RE: European Union's Possible F1 Investigation
(09-29-2015 01:42 PM)Yaaay Wrote:  This will hand more power back to Bernie. Worst thing the EU can do is a 10% fine on turnover. So FOM pay 100 million which they just take off the teams.
Yes. Bernie just replied that he's not worried and it wouldn't make any difference to him or CVC, because it won't affect them. He said Sauber and Force India came directly to him first and he then informed CVC to expect the EU news to publicly come out- as it did.

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09-29-2015, 11:17 PM
Post: #10
RE: European Union's Possible F1 Investigation
[Image: formula-one-profit-distribution.jpg]

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09-29-2015, 11:33 PM
Post: #11
RE: European Union's Possible F1 Investigation
is that chart for a different year than the one yaaay posted?
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09-30-2015, 12:04 AM (This post was last modified: 09-30-2015 12:07 AM by leonbray.)
Post: #12
RE: European Union's Possible F1 Investigation
(09-29-2015 11:33 PM)frankdouglason Wrote:  is that chart for a different year than the one yaaay posted?

yes - 2013

Ferrari's premium comes from

- their 5% of the total operating profit + constructors prize money

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09-30-2015, 12:37 AM
Post: #13
RE: European Union's Possible F1 Investigation
okay, now the picture is coming together. i don't get why there's a constructors' championship bonus that is separate from the column 2 payments, but whatever.

so it seems like the only part that would potentially be objectionable are the historic bonuses, which were 90 for ferrari, 30 for mercedes, and 30 for williams. yaaay earlier asked if ferrari were worth 9 times that of williams. i would say they aren't, but are they worth 3 times williams? that sounds about right. my beef with the historical bonuses is over mclaren getting left in the dust. they seem more important to f1 history than mercedes and williams to me.
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09-30-2015, 12:39 PM (This post was last modified: 09-30-2015 12:40 PM by Neonzapper.)
Post: #14
RE: European Union's Possible F1 Investigation
(09-30-2015 12:37 AM)frankdouglason Wrote:  okay, now the picture is coming together. i don't get why there's a constructors' championship bonus that is separate from the column 2 payments, but whatever.
The Constructor Champion Bonuses are awarded by the FOM, not awarded by the Formula One teams, therefore the money comes out of the FOM pocket and not from the pockets of all the teams.

(09-30-2015 12:37 AM)frankdouglason Wrote:  so it seems like the only part that would potentially be objectionable are the historic bonuses, which were 90 for ferrari, 30 for mercedes, and 30 for williams...my beef with the historical bonuses is over mclaren getting left in the dust. they seem more important to f1 history than mercedes and williams to me.
Oh my- that's complicated, but the following secret Concorde Agreement left McLaren, Williams, and Tyrrell in the dust after they protested Bernie's take-over of F1.

Now, Sauber and Force India are protesting the governance of F1 by Bernie and citing McLaren and Williams as part of the five richest teams.

Bernie has escaped take-over retribution in the past, and even a total walk-out by all the teams. I'm sure he still has a lot of teflon surrounding him against the EU.

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09-30-2015, 01:03 PM
Post: #15
RE: European Union's Possible F1 Investigation
(09-30-2015 12:39 PM)Neonzapper Wrote:  
(09-30-2015 12:37 AM)frankdouglason Wrote:  okay, now the picture is coming together. i don't get why there's a constructors' championship bonus that is separate from the column 2 payments, but whatever.
The Constructor Champion Bonuses are awarded by the FOM, not awarded by the Formula One teams, therefore the money comes out of the FOM pocket and not from the pockets of all the teams.

(09-30-2015 12:37 AM)frankdouglason Wrote:  so it seems like the only part that would potentially be objectionable are the historic bonuses, which were 90 for ferrari, 30 for mercedes, and 30 for williams...my beef with the historical bonuses is over mclaren getting left in the dust. they seem more important to f1 history than mercedes and williams to me.
Oh my- that's complicated, but the following secret Concorde Agreement left McLaren, Williams, and Tyrrell in the dust after they protested Bernie's take-over of F1.

Now, Sauber and Force India are protesting the governance of F1 by Bernie and citing McLaren and Williams as part of the five richest teams.

Bernie has escaped take-over retribution in the past, and even a total walk-out by all the teams. I'm sure he still has a lot of teflon surrounding him against the EU.

Bernie works for CVC, they are the ones who stand to loose from this. I suspect this will just give him an opportunity to buy it back from CVC at a discounted price while also getting rid of some of the old agreements that give unbalanced payments.

Right now F1 is in decline, this could give him a chance to get some significant changes through that gets it back on a path to growth and more profit...which means he could sell it off again for even more, or float it.
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