Formula 1 is a fairly complicated sport, with a governing body (the FIA ) that sets the rules, a promoter (the FOM /Formula One Group) that drives its commercial success, and ten teams currently, all with their own agendas, purposes and goals.
The politics around the paddock can sometimes be just as interesting as the action on the track. But how do all the pieces of the puzzle fit together?
What is the FIA and what is its role in F1?
The FIA is the International Automobile Federation. As far as F1 is concerned, it acts as a sanctioning body, as well as defining and regulating the championship regulations.
This body focuses on safety, and its functions, among others, include writing the rules, conducting crash tests, scrutinizing meetings, monitoring the safety car and the medical car, regulating races, arbitration and sanctions.
The organization was founded on June 20, 1904 and also governs many other world motorsport championships, from rallying to karting. In addition to promoting safe, sustainable and accessible mobility for all road users.
Who runs the FIA?
Mohammed ben Sulayem is the current ruler of the FIA, having won the vote for president in December. He took over from Jean Todt , who was at the head of the organization since 2009.
However, this is not a group made up of just one person. The General Assembly is the supreme governing body with representatives from all FIA member associations. There is also the World Motor Sport Council (WMSC), which governs all FIA championships.
This includes F1, in fact it is the WMSC that always defines the regulations and must ratify any changes, including the approval of the proposed calendar every year. It also directs the International Court of Appeal, which resolves any unresolved dispute within a previously established period.
What does FOM mean and what is its role in F1?
FOM stands for Formula One Management, which is the main operating company of the Formula 1 Group. It owns and operates all the commercial rights of the category, including the official brand and logos.
The FOM is responsible for defining the calendar, making deals with race promoters, closing television coverage rights, and arranging licensing deals for the use of the F1 brand.
As part of this, the FOM creates the global television coverage and manages the logistics of the teams, as well as the equipment that moves from one race to another, two incredibly huge tasks in themselves.
Its origins go back to 1974, when the FOCA (Formula One Constructors’ Association) was founded to manage the sport’s commercial agreements. It was run for more than 40 years by former top-flight owner Bernie Ecclestone.
The Formula 1 Group was bought by Liberty Media for nearly €4 billion (as reported by the BBC at the time) in 2017. American Chase Carey immediately became chief executive, ending Ecclestone ‘s long reign.
Who runs the FOM?
Since the beginning of 2021, Stefano Domenicali (who took over the helm of Ferrari in F1 when Jean Todt stepped down in 2007) has held the position of president and CEO of Formula 1.
Ross Brawn , who was technical director at Ferrari alongside Todt and later team manager at Honda and his own surprising Brawn GP team, is the sporting director. While Carey now plays the role of non-executive chairman.
Who really makes money in F1?
The FOM is the one that makes the big money, with race fees, TV revenues, deals and hospitality generating billions of euros.
The fees for the races are kept secret, but according to public financial files, it has been shown that they are usually 10-year contracts that increase by 5% each season, going from 25 to 50 million euros. With 23 races, the total figure is close to one billion euros in a single year.
FOM’s income from television rights is estimated at more than 500 million euros per year. For example, Sky Sports in Great Britain pays almost €1 billion for its multi-year deal, while in the Netherlands the Nent Group is about to start a deal estimated to cost around €30 million per season.
Sponsorships and linked partnerships also bring in very significant revenue, with 15 global partners including Heineken, Pirelli, Rolex, DHL and Emirates, as well as official sponsors including AMG, Johnnie Walker, Tata and Amazon Web Services.
The Paddock Club is another lucrative part of the business. Its official dealer, BAM Motorsports, sells high-end food packages and exclusive access. To give you an idea, a three-day pass for the season-ending race in Abu Dhabi cost €6,000 per person.
How much money does FOM pay F1 teams?
F1 teams receive a portion of the FOM revenue, but the exact details are also not made public. In addition, the way of distributing the cast changed in 2021, when a budget cap was also introduced.
All teams share equally 50% of a main prize “pot” and receive a further staggered amount based on the order of the constructors’ ranking (with 18% going to first and 2% going to second). tenth).
In addition, a bonus is paid to the leading teams, based on the frequency of their appearances in the top three championship order over a 10-year period. And Ferrari, on the other hand, also receives a historical bonus, just for being Ferrari.
Do the F1 teams have authority in the management of F1 by the FOM?
The teams have a voice and a vote, since they are part of a group of 30 members who vote together with the FOM and the FIA . Each team has one member, that is, one vote. While the FIA and the FOM have 10 members -and 10 votes- each.
Proposals usually need a large majority of 28 votes to be approved, although for long-term decisions a smaller majority is required, specifically 25. Any changes have to go through the FIA World Motor Sport Council for final ratification.
As an example of the topics that this group usually deals with, the first meeting of 2021 discussed the calendar, the proposed regulatory changes, the plans for the “new generation” car, the environment and cost control.
What happened to Bernie Ecclestone?
Ecclestone is credited with taking F1 from a gentleman’s racing club to a global phenomenon. He made the sport what it is now, but quickly disappeared from the paddock when Liberty took over.
Ecclestone was given the role of “president emeritus”, although it is an honorary title that expired at the beginning of 2020, the year in which he turned 90.
