F1 | It was necessary to make teams financially healthy for F1 to build to the next level, says Liberty Media CEO Maffei
Maffei explains Liberty’s efforts in strengthening the ecosystem and says teams are to “expect more demands” as revenues go up.
In recent years Formula 1 has taken some steps in order to make teams more financially sustainable. A more equitable distribution of the earnings among teams and the introduction of a cost cap were crucial in turning teams into more profitable organisations. A considerable change in which Liberty Media played a major role, as McLaren CEO Zak Brown noted just before the US Grand Prix.
“I’m very happy to see the teams do well, that was necessary for the success of F1,” stated Liberty Media President and CEO Greg Maffei during a conference call for the company’s 2021 third quarter earnings.
“One of the important things was to help the ecosystem and you’ve really seen the strength of the teams do so much better.”
“I appreciate all the kind words they now say about Liberty, and about Formula 1’s management. That’s because, guess what, the value of the teams has gone up dramatically.”
The aim is to ensure the long-term future of the sport by making each and every F1 team financially secure.
“We knew that was necessary in the actions we took with the budget cap and the like and changing some of the payouts – all were designed to create health of the ecosystem,” explained Maffei.
“And that’s happened. So in many ways the teams have got that success because it was necessary to make them healthy for us to build to the next level. And the interest you're seeing of new entrants to come in and buy teams is only an echo of that success.”
To better support them Liberty has been directing larger shares of the revenues to the teams, shares that are set to become smaller as earnings increase.
“The new Concorde Agreement has some incentives that as revenue and profits increase, we take back some of that which had been given over the last several deals,” he said.
“I already warned the teams: ‘expect more demands from us’, based on how much success they’ve had. And they smiled, so we’ll see how those negotiations go. But I’m optimistic that we can continue to have success with the teams, as we’ve had over the last couple of years, and will both benefit.”
