Todt: ‘FIA can’t be federation without revenue’

The Concorde Agreement is set to be discussed this week in Paris and amongst the players, FIA president Jean Todt is seeking the same thing the teams and the commercial rights holders (FOM) are—more money from the series.

If you believe the math, Formula One generates between $1.5b to $2b in revenue per year. The Teams would like to see more of that revenue distributed amongst them based on merit for their performance (some would like merit pay based on their legacy) and FOM would like to keep more of it while the FIA wants more for their regulatory and governing role of the sport.

The racing industry is facing difficult times and one can see that as evidenced by infrequently used tracks (Korea/India), tenuous engine makers (Cosworth), razor-edge team finances (HRT) and waning event attendance. The world’s economic outlook is dour and it seems that Formula 1 may not be impervious to the impact of a new world of financial strain.

Jean Todt will attend the critical discussion in Paris and the topic most prescient will be the reduction of costs for participating in F1. Former FIA president Max Mosley opined last week that Todt needed to be more assertive in mandating what the new future of F1 would be and how the cost reductions would work but Todt feels that a dictatorship is not the way forward. Todt told the Financial Times:

“For me, the FIA must have a bigger impact, not erosion,” Todt said.

“I’m not a dictator trying to control. The contribution and the role of the FIA has to be protected, to be respected.”

If Todt was attempting to position the FIA as a participant to the Concorde Agreement and with greater need fo more revenue for the series, bullying the teams and FOM may not be the right direction:

“The FIA is a non-profit organisation, but we need to run our organisation. We need to encourage the development of the sport, we need to encourage development of action for road safety.

“We cannot be a federation without having any revenue. So where do we find our revenues?”

It’s an interesting, public cry for revenue. In essence, the FIA—like the teams and FOM—are in need of cash and the economic oppression has impacted their ability to continue the lifestyle, expense structure and programs they have grown accustomed to. The same can be said of the smaller teams who are using paying drivers and as many sponsors as they can get to keep the wheels turning.

Some teams have developed all-new industries and opportunities for themselves such as Williams F1 and McLaren while other teams are anchored to racing alone and in need of serious help from the F1 series dividends.

No one knows better at just how the FIA needs to position itself to seek harmony and a bigger piece of the pie than Jean Todt. He’s a cunning businessman and made the most of his time at Ferrari. Getting alignment from the teams on such big issues as cost-cutting and other elements that serve the teams interests would take consensus and delicate political positioning—not the heavy-handed approach that Mosley claims Todt lacks.

 

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