Bernie Ecclestone’s F1 era was one where a lot of commercial success flowed in for the sport and helped it become the ‘giant’ that it is now.
However, ever since Liberty Media’s takeover of the sport, a lot of Ecclestone’s deals have come under the scanner, especially the fees that the race promoters have to shell out in order to hold a race.
Toto Wolff has said that a lot of the race promoters are struggling because the current deal is just not economically viable for them.
“The sanction fees were one of the three key revenue generators in the old Bernie Formula One business model,” said Wolff.
“And he was exceptional at these deals.
“I am not sure it is sustainable. It is clear when there is a change of regime that people and promoters will negotiate and try to restructure the business model.
“Bernie was squeezing the last cent out for the benefit of the shareholders and the teams but it left certain promoters in a very difficult economic situation.” he added.
Azerbaijan promoter Arif Rahimov has spoken about how the non-European races want the fee to come down to roughly $30.6 million(the amount paid by European races)
“Obviously we want to be closer in that mid-range of fly-away races,” said Rahimov.
“You cannot just take the average of all the races because obviously European races pay less for a lot of reasons, starting from logistics and cost of operation. But we definitely want to be there in the average of the fly-away races
“That’s not the only thing we’re discussing with FOM
“It’s most of the other commercial terms in the contract too. They want to try a new approach, it’s a bilateral kind of effort to make this viable for all of us.” he added.
New commercial avenues is probably the way to go, so as to relieve the pressure off these race promoters and also not make F1’s overall revenue suffer.
“I have confidence in the current management team that they will take the right decisions,” Wolff said.
“Find the right agreements with promoters, sign new racetracks. I think Miami is very exciting.
“But it is also clear that one pillar is going to be difficult to maintain on the levels we have seen before. We have to go in other areas, we have to grow broadcast deals, digital revenue and modernised, alternative revenue streams.” he concluded