Force India and Sauber drop EU complaint re F1 payments

[Everso Biggyballies]

Force India and Sauber have withdrawn the complaint they made to the European Union Competitions Commission over Formula 1’s governance and payment structure. The two teams lodged an official complaint with the Commission in September 2015, citing the division of revenues and drawing up of rules as “unfair and unlawful”.

The pursuit from Force India and Sauber was taken on by a newly-created department within the Commission in April 2016 and though the case remained open it was progressing slowly through the system.

Since then, F1 has been taken over by a new commercial rights holder, with Liberty Media succeeding CVC and throughout 2017, Liberty’s first season in charge, there was significant talk about creating a fairer playing field.

In a joint release, the two teams confirmed they had therefore “decided to withdraw the complaint we lodged with the European Commission in 2015 on the subject of anti-competitive practices in the sport of Formula 1.”

It continued, “We have been greatly encouraged by the dialogue that has been introduced following the appointment of Chase Carey as executive chairman and CEO of the Formula 1 commercial rights holder and his new management team.

“Their approach has brought a new culture of transparency to the sport and illustrates willingness to debate fundamental issues such as the distribution of the prize fund monies, cost control and engine regulations.

“We are encouraged and reassured by the even-handed and fair negotiating approach taken by the new management of Formula 1 to all the teams and their issues.

“While the concerns leading to the compliant were fully justified, we believe this new approach provides the necessary degree of assurance that our concerns will be looked at objectively, and we prefer to resolve the issues facing the sport through dialogue rather than a legal dispute.

“We want to support this transformational process in Formula 1 and thus have resolved to withdraw our complaint with immediate effect.”

[DoubleFart]

I'm choosing to ignore their comments and instead read it is "We're going to get a larger deposit coming into our accounts now Bernie's gone, so don't feel the need to cause bother."

[John]

So Liberty Media will sort out the payment structure. Good.

About time.

[Antonov]

is it just me, or does it mean that 'taking the matter to the EU level' means no one cares anymore?

[Everso Biggyballies]

is it just me, or does it mean that 'taking the matter to the EU level' means no one cares anymore?

If you look at the thread title it states they are NOT taking their claim to the EU, or to be more precise they have dropped it.

I understand it is because of the indications from Liberty that the past problems under the Bernie Pie system that saw them unfavourably treated (relative to others) and inspired them to originally launch the EU action have shown that under the next agreement payment levels will be more balanced between the teams. ie the Rich teams will be less rewarded and the poor teams more rewarded.

Of course that is just Liberty's initial words of appeasement, perhaps trying to keep all factions happy. It remains to be seen in the light of day whether they have the power or the conviction to trim back the payments to the top teams and continue with their Robin Hood like plan..

[PTRACER]

I'm choosing to ignore their comments and instead read it is "We're going to get a larger deposit coming into our accounts now Bernie's gone, so don't feel the need to cause bother."

Immediately my first thought. Aka someone paid them to shut up.

[myownalias]

I'll reserve judgment until I see some actual action, talk is cheap!

[Everso Biggyballies]

Exactly. Liberty seem better at the talk than the action.

[kals]

Exactly. Liberty seem better at the talk than the action.

Huh? They've been in control a little over a year. What actions were you expecting in that period?

Reminder, they've made small subtle improvements in their time in charge. Also remember that they inherited the complex length agreements that Bernie and co put in place with FIA, the teams, circuits, promoters and broadcasters. Coming in and making instantaneous wholesale changes make no sense.

Let's not be critical of them because of publicizing their management speak aka their concepts, 5 step plans, etc.... This criticism is more deserving of Stefan GP who were all talk and zero action.

[Everso Biggyballies]

Im less impressed with them now than I was six months ago. Im quite prepared to accept it is me unwilling to take on some of their thoughts and proposals. Too old and stubborn. The problem is too much about the trimmings when the problems are deeper rooted. I just dont think anything is better other than the social media which I couldnt care less about anyway. Change the race times by an hour. What difference will that make? Apart from piss off an existing solid market in the Southern Hemisphere. For zero gain.

In the context of the FI and Sauber claim I think it is possibly Liberty implying future payment criteria will change.... but the reality is that with a pie that seems to be shrinking the only give is going to come from reduced payments to others, which is unlikely to yield the sums required. Basically an unsustainable promise.

[MonteCristo]

What will be funny with plans for American expansion will be that their TV rights are no doubt on some cable channel (or if they're on free to air, it'll go onto cable), and maybe they get like a million more viewers than they have now (which is probably only a million or so anyway?), which is nothing compared to the eyeballs they're losing to TV rights now around the world.

So actual team sponsors will pull out even more than they are now, because it's not worth them paying millions and millions of dollars for a worldwide audience of a few million. Net benefit = five backwards steps.

[kals]

Im less impressed with them now than I was six months ago. Im quite prepared to accept it is me unwilling to take on some of their thoughts and proposals. Too old and stubborn. The problem is too much about the trimmings when the problems are deeper rooted. I just dont think anything is better other than the social media which I couldnt care less about anyway. Change the race times by an hour. What difference will that make? Apart from piss off an existing solid market in the Southern Hemisphere. For zero gain.

In an earlier post I mentioned that the TV situation was shitty for you guys, so I can't blame you for being pissed. These are just ideas though. Not stuff that's happening, yet at least. However the other stuff you mention I answered in my previous post. If you expected big improvements in a short time frame then that's unrealistic for the reasons I mentioned, and you also state "the problems are deeper rooted".

In the context of the FI and Sauber claim I think it is possibly Liberty implying future payment criteria will change.... but the reality is that with a pie that seems to be shrinking the only give is going to come from reduced payments to others, which is unlikely to yield the sums required. Basically an unsustainable promise.

Maybe, maybe not. We're not privy to the information. But whatever did happen made Sauber and Force India drop the case, so considering they logged the case some 1-2 years ago I'd prefer to assume Liberty have done something positive to influence the team's mindset.

[kals]

What will be funny with plans for American expansion will be that their TV rights are no doubt on some cable channel (or if they're on free to air, it'll go onto cable), and maybe they get like a million more viewers than they have now (which is probably only a million or so anyway?), which is nothing compared to the eyeballs they're losing to TV rights now around the world.

So actual team sponsors will pull out even more than they are now, because it's not worth them paying millions and millions of dollars for a worldwide audience of a few million. Net benefit = five backwards steps.

NBCSN's viewship figures for 2017 were less than a million (about 600,00) and up 11% year on year. F1 globally is in decline. Traditional sponsorship as you mention it (pay for name on car, get TV air time) is also in decline.

We’re also just assuming that this is focused on gaining American viewers. Let’s remember the big fan base in South America that will be positively influence by this.

These are just ideas, for now.

Another point to mention is that we only talk about and measure based on TV viewers. Many people watching F1 do so via streaming, legally or otherwise. We know Liberty wants to launch a streaming service. Last year I watched a few races via the NBCSN sports app as I wasn’t in front of a TV. Is there any way to measure numbers of viewers by streaming? I don’t think there is but I could be wrong.

[MonteCristo]

We’re also just assuming that this is focused on gaining American viewers. Let’s remember the big fan base in South America that will be positively influence by this.

Very fair point.

But if they go behind a pay wall as well in due time (or if they already are), then that will matter next to nothing.

F1 has some very big problems.

[kals]

There's an interesting parallel between paywall TV viewership in F1 (or sports in general) and the pharmaceutical industry. We all believe that drugs should be affordable and be accessible to everyone regardless of an illness or ailment, the same goes for F1 TV viewers... we all believe that it should be open access to all and at no or little cost.

Perhaps we're looking at the situation the wrong way around. Maybe viewer numbers isn't the metric Liberty wants, same as Bernie. The parallel between the two is that hiking drug prices reduces the overall number of patients served but massively increases revenues. Some people will stop using the drugs, but those who still want / need it will continue to pay the increased fees. Scandalous and yet not illegal.

Tl;dr, it's not about overall viewer numbers, it's about increasing revenues.