As F1’s revenues hit record highs, a brewing battle over funds between the FIA and Liberty Media could redefine the sport’s future.
Difficult negotiations may arise between Formula 1’s governing body, the FIA, and the commercial rights holder, FOM, owned by Liberty Media.
The current Concorde Agreement – binding the FIA, Formula 1, and the teams – was signed in 2021 and will apply until the end of 2025.
Talks are already underway but are expected to intensify in the coming months.
“It’s a continuous process,” explains Peter Bayer, the new CEO of RB F1 team, “and last time it took about two years. I hope this time we can achieve it more quickly, but it’s something that will be discussed behind closed doors, with the responsible people.”
Liberty Media’s CEO, Greg Maffei, wants to speed up the process, admitting last year that he wished to “strike while the iron is hot.”
Around the same time, the current FIA president, Mohammed Ben Sulayem, insisted there was no urgency.
“If you want a strong FIA, we need to work together, and we need to empower the FIA because the FIA is the regulatory body.”
Today, as Formula 1’s commercial revenues exceed $3.2 billion a year for the first time, someone very close to Ben Sulayem reveals that the non-profit FIA will push for a larger share of the sport’s revenues.
This could explain the current acrimony clearly existing between the FIA’s current regime, the teams, and Liberty Media.
“When we arrived at the FIA, they were losing 30 million euros each year,” said Manuel Avino, one of Ben Sulayem’s vice-presidents and president of the Spanish motorsport federation (RFEdeA).
“This would have put the FIA into absolute bankruptcy in four years, and that’s why they had to change many things. We have lived through many years in which the previous president or leadership team avoided confrontation with many promoters and many situations.”
“Sometimes, you need to step out of your comfort zone and claim your rights, the ones that belong to us. This sometimes makes the promoter, or in this case Liberty Media, uncomfortable.”
The implication is that Mohammed Ben Sulayem will push for a larger share of F1’s financial pie controlled by Liberty Media in the next Concorde Agreement.
“The Formula 1 promoter becomes a billionaire at the expense of a product that belongs to the FIA,” Avino continues.
“80% of the FIA’s budget comes from F1, and now we find it unfair that of all this wealth generated by Formula 1, nothing is shared with the FIA.”
“Our president demands that what belongs to us be returned, as the FIA is a non-profit entity that wants to reinvest in the competition. There is no animosity or confrontation.”
F1’s Financial Tussle: FIA vs Liberty Media. F1’s Financial Tussle: FIA vs Liberty Media
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