Formula One auto racing is considering canceling its fan-friendly practice sessions on the Friday before a race weekend in order to cut costs so that teams can compete in more races writes Christian Sylt of Forbes Magazine.
The plan was revealed by F1’s motorsport boss Ross Brawn in an investor meeting on Sunday held by the owner of the series, Liberty Media Corporation, which is listed on the Nasdaq with the ticker FWONK.
Teams often use the Friday sessions to test development drivers and many races sell discounted tickets to attract fans who can’t afford the price tag on race day. Next year’s British Grand Prix is already advertising tickets which cost just $99 (Â£75) on the Friday compared to $205 (Â£155) two days later. Liberty is considering putting the brakes on that in order to cut costs and boost the number of races which will equal the record of 21 next year with the return of the French Grand Prix.
The teams’ contracts commit them to compete in all of the races but they tend to be concerned about more being added to the calendar as it increases their costs and staff have to spend more time away from home.
“The teams have logistical issues the more races we add," said Mr Brawn yesterday. However, he added that “One of the things we are doing is looking at the format of a race weekend to see if we need to change that to make it logistically easier for them to do more races. So we have got a very open mind about how we go forward.
“I think the core race is still, for me personally, very important. We are not looking at changing the core event but, open question, do we need Friday running? Because if we didn't have Friday running we could do more races because logistically it is better for the teams. But Friday running is important for the promoters and the broadcasters. How do we find the right solution?"
F1’s governance contract allows it to host up to 25 races every year but it isn’t as simple as that. Ferrari, McLaren and Red Bull Racing together told a special veto as they were the top three teams over the four years to 2012 when their contracts were being negotiated. F1 company documents reveal that consent from the majority of these three teams is required “if there are more than 20 Events in a season or more than 17 Events are held in a season and the number of Events that are held outside Europe, the US or Canada exceeds 60% or more of the total number of Events in that season."
There is a significant incentive for them to give the green light to more races. F1 teams get an annual prize fund which came to $$985.5 million last year and represents 66% of its underlying profit. The bulk is split between the top ten teams but a report in 2013 for broadcaster ESPN revealed that Ferrari, McLaren and Red Bull Racing also share in a bonus fund which comprises 7.5% of the profit.
Race hosting fees generate more of F1’s revenue than any other source and this came to 36% of its total $1.8 billion last year. So the more races there are, the greater the revenue and the higher the profit with Ferrari, McLaren and Red Bull Racing getting a dedicated share of it.
F1’s governing body, the Federation Internationale de l’Automobile (FIA), also has to approve the calendar but its costs are covered. F1 pays the FIA $25 million in annual regulatory fees which cover up to 20 races with a further $1 million due for each additional event. It also gets a guaranteed 16,000 kilos of air freight from F1 per long haul race along with 10 economy and 10 business class air tickets.
That doesn’t mean to say that more races and the end of Friday sessions is a done deal. More by Christian Sylt/Forbes