Mercedes team principal is bewildered at tone-deaf greed of the European Super League farce as Formula 1 takes steps to be more equitable in order to secure the sport’s long-term future
It seems there was a simple lesson to be learned from the ignominy and farce of the European Super League. “The moment you forget about your fans and you are purely driven by greed, you undermine what the sport should stand for,” observes the Mercedes team principal, Toto Wolff.
Wolff is proud that Formula One, a sport involving breathtakingly large sums of money and teams that are notoriously difficult to corral into agreement has, in stark contrast to the failed European football breakaway, proven that working together is the better route to ensuring a long-term future.
The Austrian is one-third owner of the Mercedes team and has been its principal since 2013. In conversation before this weekend’s Spanish Grand Prix he contrasted the recent fundamental changes in F1 with the ESL’s failed coup.
“What informed a lot of our decision-making was what the fans of F1 would think and what they wanted,” he says. “Which was quite clearly something the ESL failed to do.”
Where the ESL collapsed in just 50 hours, the protracted and difficult negotiations over F1’s future have laid the groundwork for F1 to thrive. Wolff is interested in the business side of football and is genuinely nonplussed as to why the ESL experiment was not only misjudged but instigated because of existing problems in the game.
“How absurd is it that the best European football clubs are suffering from a huge amount of debt, don’t generate sustainable regular profits when they are the best sports entities in the world? That’s completely nuts,” he says, echoing what many football fans have been asking for decades. “In F1 we recognised it can’t continue like this, there needs to be a sustainable place for the sport to prosper long-term.”
Wolff’s confidence in F1 is the result of two groundbreaking changes to its structure. In August last year all 10 teams signed up to the new Concorde agreement, the commercial deal between them and the sport’s owners, Liberty Media. The teams agreed to change the way the revenue from the sport was distributed and to set a spending cap as of this year of $145m. The intent was to level the competitive playing field and ensure that teams could exist on a solid financial basis.
The redistribution of revenue was long overdue. Ferrari, Red Bull and Mercedes received far greater income than smaller outfits, reinforcing their ability to outspend their rivals and leaving some in danger of being unable to afford to continue racing.
There are now two payments, distributed more equitably. One of 10 equal amounts for participation and the second based on sporting success but with a smaller differential between first and last and with the big teams forgoing some of the vast bonuses they had previously enjoyed.
Wolff believes Mercedes were hit hardest, noting they had probably taken a “20% hit on the TV money we are generating”. Yet he is convinced it was in the sport’s best interests. Managing to gain agreement from F1’s biggest teams to voluntarily accept a decrease in income for the greater good is remarkable.
It stood alongside an equally important breakthrough – the budget cap. F1 has been in a spending war for years, with money opening a gap between Mercedes, Red Bull and Ferrari and the rest of the field that simply could not be bridged.
Ending this war was paramount. This season the budget cap is set at £115.2m. For Mercedes this represents a real-terms cost-cut of £50m, and the figure will be similar for Red Bull and Ferrari. The cap will drop again over the next two years, bringing the big three into line with what the rest of the field can spend.
All three had initially resisted the scale and speed of the cap’s imposition but ultimately recognised it as vital. As F1’s sporting director, Ross Brawn, noted: “The dial has been set at 11 for too long. We need to wind it down. It would be irresponsible to ignore it. We’ve all got to respond”.
This was a huge step and has been far from easy, not least in that there is an ongoing consideration of personnel cuts, a task taken very seriously. Wolff cites a “personal obligation and duty” to make sure he looks after his employees in the best way possible, Red Bull and Ferrari have been at pains to try to do the same.
“Nothing changes that we are fighting with gloves off on the track and for every single advantage that will bring us sporting performance,” insists Wolff. “But equally we need to make sure that the sport prospers.”
That the fierce competitive edge remains was abundantly clear this week when Red Bull poached five senior Mercedes staff to work at their new engine division. A cap on engine spending is also likely to be introduced in the near future. Drivers’ salaries are not yet included but it is believed a salary cap of £30m will be implemented as current contracts end over the next two or three years.
Mercedes, it should not be forgotten, have won the last seven constructors’ and drivers’ championships. Yet acknowledging that sport means competition, Wolff believes their dominance does not give them the right to behave with wanton impunity even if the results come back to bite you. As the ESL discovered, you ignore your fans at your peril.
“Nobody wants to see the same team win all the time, you need to have less predictability and more variability,” he says. “You need to recognise what fans want. Opportunity for every driver and every team to eventually fight for a championship. I may have to eat my words but I am prepared to go there and prepared to invest in the long-term health of my sport whilst at the same time fighting for every inch on the track.”
Valtteri Bottas was quickest for Mercedes in first practice at the Circuit de Catalunya on Friday, with Red Bull’s Max Verstappen in second and Lewis Hamilton in third. In the afternoon session Hamilton topped the timesheets, just a tenth of a second in front of Bottas, with Verstappen in ninth after he aborted his qualifying simulation.
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