Toto Wolff, Silverstone, 2018

Mercedes will be ‘no walkover’ in F1 prize money debate – Wolff

2018 F1 season

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Mercedes will not be a “walkover” in its discussions with Liberty Media over future changes to Formula 1’s prize money, team principal Toto Wolff has said.

While all teams can be eligible for F1’s ‘column 1’ and ‘column 2’ prize money payments, Mercedes is one of five which qualifies for special bonuses on top of that.

In 2013 the team negotiated with Bernie Ecclestone to receive a multi-million dollar ‘latching bonus’ if they won two consecutive constructors’ championships and 24 races across two seasons. They achieved this in 2014-2015, winning both titles and 32 races, meaning they receive the bonus until the current commercial deal expires at the end of 2020.

Liberty Media, which replaced Ecclestone’s employer CVC as F1’s commercial rights holder, is seeking to introduce a new prize money structure from 2021 which will distribute the sport’s revenues more equally among the teams. But Wolff says Mercedes will strive to protect their bonus.

“When Mercedes decided to join Formula 1 we were not competitive and we didn’t have any privileges,” he said. “And we really dug ourselves out of a big hole knowing that, if we were to be successful, we would have the right to more privileges and be taken seriously.

“This was an uphill battle that lasted many years with a lot of struggle, a lot of responsibility that we took and investment from Daimler to achieve that status. For sure we will not be a walkover in letting go [of] what we have achieved over the last years.

Chase Carey meets the team principals, Interlagos, 2018
Carey met F1 team bosses in Brazil again
“Today, we are proud to be an important stakeholder of the sport. But it is also clear that everybody is going to defend his own objectives.”

F1 teams met with representatives of Formula One Management in Brazil in the latest round of talks over the future direction of the sport. Wolff praised the approach F1 CEO Chase Carey has taken.

“We’ve been having good discussions, open discussions and transparent discussions which is a new style in Formula One,” he said. “And it’s not clear everybody is embracing that with all the right values.

“But at least we’re sitting down and talking and this is good progress. And then we’re having a meeting with Chase also where he is being transparent, Ross [Brawn] was there. I think it’s very good that we have a little bit of a momentum in the discussions.”

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  • 40 comments on “Mercedes will be ‘no walkover’ in F1 prize money debate – Wolff”

    1. “Despite the financial disparity hamstringing our competitors that ensures we remain top of the tree and is putting others out of buisness completely, we will strive to protect OUR obscene levels of money and competetive advantage and ensure that nobody can compete with us for further five years.”

      1. 😊 Thanks for the translation, that was easier to read @rocketpanda

      2. Thanks @rocketpanda. I don’t speak German.

      3. “And hey, our bonuses are NOTHING compared with Ferrari, who doesn’t even have to win championships to make an obscene amount of bonus money!”

        1. How about neither of them get bonuses?

          1. Merc EARNED it by winning. Ferrari gets it just for existing. They are two different things. The winning bonus is in their contract, why should they give it up? If any other team qualified for cash as per the rules I’m sure I’ll hear how ‘unfair’ it is if they don’t turn their back on what they earned.

          2. Bonus for winning title multiple times in a row is quite fair and it means the engineers will work hard to retain title or other teams will be motivated to work hard to win multiple WCCs.

      4. I read it slightly differently @rocketpanda, @phylyp, mainly because of that line

        And it’s not clear everybody is embracing that with all the right values.

        , which leads me to think it is more like “we will not be the weakest link when it’s between who has to give up the most, Ferrari will have to accept losing some, and so will Red Bull”. Why? Well, Ferrari clearly is the one that currently has the most special status, and they’ve always been reluctant to give that up. And last weekend we also heard that Red Bull think they are of more value to F1 than most of the rest of the paddock credits them.

        1. @bosyber – yep, that is an equally valid (and less controversial) interpretation.

    2. Maybe they’ll be no walkover, but at first blush my two thoughts on this are…maybe for the overall health and future of the sport they could compromise and at least take a little less, on top of all else they would get from F1 and from the marketing value of winning two WDC’s in a row and all those races. Maybe Liberty shouldn’t even offer the same type of bonus at all. It was a BE thing and he’s gone.

      Second thought, if Liberty has their way there won’t continue to be such utter dominance as per all the things they have been saying about budget caps and leveling out the playing field somewhat etc etc…taking a little away from the have teams to help the have not teams see a bit of light at the end of the tunnel.

      I get Wolff saying what he is saying, and other teams will fight for their turf too, and Liberty needn’t insult them or others in their position with some kind of minuscule bonus either, but let’s not see greed further erode F1 when they have a chance to try some different things post-BE which all teams seem to be fairly on board with in general. What’s better, 80% or 90% of the over the top money they’ve been getting, or 100% of nothing? Let’s not forget the massive global marketing value for teams to be in F1. It’s not just about what F1 pays them directly through the various avenues. If it was, half the teams would be gone.

      1. “Maybe Liberty shouldn’t even offer the same type of bonus at all. It was a BE thing and he’s gone.”
        Totally agree… [for once… ;-) ]

      2. @robbie

        Maybe they’ll be no walkover, but at first blush my two thoughts on this are…maybe for the overall health and future of the sport they could compromise and at least take a little less, on top of all else they would get from F1 and from the marketing value of winning two WDC’s in a row and all those races. Maybe Liberty shouldn’t even offer the same type of bonus at all. It was a BE thing and he’s gone.

        I agree that the top teams need to compromise of the income distribution for the overall sustainability of the sport. However, I don’t think Mercedes is the team that should initiate the sacrifice of prize money. As long as Ferrari gets their massive historical payout, it sets a bad precedent for the sport. From Mercedes’ perspective, they have rich legacy in motorsport as well, and have a prominence as a automotive manufacturer globally. They have been smashing Ferrari to bits in F1 for half a decade, yet, Ferrari end up earning more money than them. That is what seems unfair to them, and while it exists, they’ll fight for more money.

        F1 first needs to reduce Ferrari’s payment for just showing up. It’s besides the point that Ferrari are the most popular team in the sport and have been associated with F1 from the beginning. It’s just poorly thought out sporting arrangements made in the era of a corrupt and inefficient F1 boss.

        If Liberty can reach a good compromise with Ferrari, the rest of the top teams will follow suit.

    3. “When Mercedes decided to join Formula 1 we were not competitive and we didn’t have any privileges,” he said. “And we really dug ourselves out of a big hole knowing that, if we were to be successful, we would have the right to more privileges and be taken seriously.

      Kinda fresh of Toto to say this, ain’t it? I’m a big fan of Merc and in awe of what they accomplished in the hybrid era. But let’s be for real for real here: Merc bought a championship winning team. They bought a team which had a solid, Ross Brawn-foundation in place. To say the above is, to me, nonsense at best.

      1. Yeah I think this concept of ‘have the right to more privileges’ is where he sounds greedy to me. If Liberty were to stop offering a 2 Championships/24 wins bonus, and just left the teams with the usual annual bonuses for their standing, shouldn’t that be enough? TW you have the right to what Liberty offers you, if you have earned that. Not the right to continue to have everything BE gave you even though he is gone.

      2. No, they bought a championship winning car. Honda spent ridiculous sums developing the BGP-001, Brawn put the Mercedes engine in it, and had (almost) enough money left to complete the season. Brawn was forced to lay off 1/3 of the staff, and had no money for development.

        By 2010, when Mercedes bought the team, they had neither a championship winning team, or a championship winning car. The 2010 car was basically the BGP-001 hacked to take a larger fuel tank, and the 2011 car never saw the podium.

        It was 2011 before Brawn convinced Daimler to invest serious cash into the team.

        1. Have to agree here with @grat guys – From 2010 to 2013 Mercedes worked to get a front running car – by 2013 they had the fastest car on Saturdays for the 1st half, but in the races they weren’t there. They were the only ones to really put their full efforts into the 2014 rules, and got 5 double championships out of it. Now, I don’t think that gives them a right to keep an advantage (just like Red Bull didn’t have some special right to be winners at the start of 2014, nor Ferrari), but yes, they did have to put the money, organisation and support from their mother company in themselves, that much is true.

          I hope that what Wolff is mainly aiming at is that all three (and Renault, McLaren, Williams, I guess) of the front running teams have to go down in funds and might equally, so that their relative chances aren’t skewed, while some of the current chasm to the rest of the grid can be bridged. If not @robbie is right that he’s too being greedy.

      3. Yes they bought Brawn, but we’re they given any extra privileges? But Brawn had a fluke car for 2009. They got found out the following year. Mercedes invested a lot into the team and suffered some pain.
        They outscored a few teams yet got paid less.
        Mercedes haven’t complained to much though the years until they started winning consistently.

        1. Ross Brawn and Mercedes also benefited from Ferrari’s great purge and snapped up Aldo Costa. One of Ferrari’s biggest mistakes was letting him go.

    4. “I need your clothes, your boots, and your share of the F1 prize money”.

      1. LOL. :-)

        “I’ll be back (for more)”.

    5. “When Mercedes decided to join Formula 1 we were not competitive and we didn’t have any privileges,” he said. “And we really dug ourselves out of a big hole knowing that, if we were to be successful, we would have the right to more privileges and be taken seriously.

      Maybe they didn’t had the privileges, but they did enter into F1 buying out the winning team. And had a deal that wasn’t offered to anyone else. So tell me again you were not privileged when you enter the sport, I might believe it next time

    6. The problem with having a Special Bonus is this isn’t extra prize money that is on top of the pool of prize money paid to all the teams, no, this is actually deducted from the pool of money that is used to pay all the other teams. This means there’s a disparity between the amount paid to a team and their place in the Constructors’ Championship. McLaren, who were 9th last season, were 4th in the payout list.
      I can accept that maybe Daimler might not have invested as heavily in F1 if they hadn’t been given the chance of earning this Special Bonus, but equally if there was more prize money then wouldn’t that have also been an incentive for Daimler to invest as heavily?
      One day Mercedes will no longer win the World Constructors’ Championship, then they will still be awarded the Special Bonus, while another team that doesn’t get a Special Bonus may have won the WCC and get less TV Rights payout than Mercedes, just like Ferrari got paid more than Mercedes who won the WCC last season. Why should this be so?
      Yes, Ferrari have a mystique that none of the other teams have, but they make money from that through the sale of merchandise.

    7. Being very pragmatic, I fully support Mercedes to keep their ‘latching bonus’.
      I would even allow them to change the name.

      Next, I would offer RBR the same deal; keep your bonus (same amount as Mercedes) and sugar-drizzle it any way you want.

      Subsequently, I visit the other teams and offer them bonuses to the same amount and with a freedom to call it whatever they want, and even earmark similar funds for team11, team12, and team13 bonuses.
      Of course, to fund this I would take away the column 1 monies (and reduce column 2 if needed).

    8. What’s the situation with ‘B’ teams? They obviously exist in some form, but what are the rules? Could this be a way for successful teams to legitimately fund them, exchange information, improving their development cycle times whilst helping to bring along a smaller team with inexperienced drivers?

    9. Why not let them keep their bonus… if they can meet the original requirements to get said bonus over a rolling 2 year period. Fail to get those 24 race wins over the 2 years? Take the bonus away as a result.

    10. manor, virgin, spyker, prost, stewart, ……, minardi, TWR, ……, jordan,… apparently all really blew it when they came into the sport – if only they would have worked as hard as Merc. they could also be enjoying the benefits of 5 double championships.

      1. Psst! Here is a secret just for you. In every Sport/Competition/Lottery/Bingo/Tombola somebody wins, and the majority loses. Somebody has to win in F1. Where is the surprise? What would you like to see? Gold stars all round for participating? Another secret: The teams don’t race for pleasure. They need money, just like any other business.

        1. My point is over here. You’re over……………………………………. here

    11. “we really dug ourselves out of a big hole” Big hole named BrawnGP that won both titles?!

      1. Brawn won the championship because they got a jump start with the blown diffuser. Look at their record after the first 7 races. They had no sponsors and was running on a shoe-string budget. So yea, they were dug out of a hole

    12. Ferrari have not won either championship in over a decade, during that period, they’ve been paid an additional $1b +/- more than any other team. That’s enough money that could’ve kept Manor in and F1.

      But most seems annoyed with Toto’ stance. Why should he not demand a fair share of the pie for his team?

      1. People are annoyed with Toto because this is an article about Mercedes, don’t need to be defensive about it.

        If it was Ferrari the treatment would be the same or worse

        1. And when has an article about someone else not see someone who has no bearing on that article being dragged into the conversation?

          You don’t know what defensive is

          1. I do, I play in goal

            1. Hahaha… “Gotcha…!”

    13. Of course Merc an Ferrari and Red Bull are going to fight it. But EVERYONE knows that a strict budget cap and more equal distribution of prize money are the only path for F1’s survival.

      Letting F1 continue to be dominated by a team of 1,500 employees with a virtually unlimited budget will kill F1 in 3-5 years, if not sooner.

      So, there’s only way Liberty can handle this if the want to F1 to survive: They have to stick to their guns and be willing to let Merc walk away. As great as they’ve been, I wouldn’t miss them at all.

      1. Tough negotiator, @partofthepuzzle.

        Hopefully you’d be just as tough negotiating with Liberty. Like Bernie, they have the teams squabbling over a more equitable split of half the revenue pie.

        Does Liberty deserve as much money as all the teams combined? The F1 purchase cost Liberty only $301 million of its own cash. And many billions of debt leveraging for Bernie’s over-priced used car racing circus.

        For the ‘booking agent’ task that FWONK performs, a 15%-20% cut of gross revenues would be fair market value. But there’s that debt to service and shareholders to appease. When Liberty speak of budget caps, what I hear is: “We need to find ways to pay ALL the teams less”. Especially as F1’s gross revenues have dropped.

        Bernie succeeded brilliantly in pitting the teams against each other while sucking billions out of F1. Liberty is playing a seemingly more conciliatory, collaborative role – they have the same goal as Bernie – divide and conquer. And make F1 more profitable. For Liberty.

        1. An informative comment, @jimmi-cynic

        2. Why couldn’t the budget cap be tied to the revenue that teams receive from Liberty?

          Ex: the teams start 2021 with a budget cap of $200 million (or something similar). If F1/Liberty does well and makes a good profit AND revenue is shared equitably among all teams, then the budget cap could be raised proportionally. The idea is that the teams all receive an equal base percentage of the profits. In addition, the also receive money based on performance. sponsorship, etc.

          This might cause some huge manufacturers like Merc to lose interest since they’re not in F1 to make money: they’re only in it to generate interest in their brand by spending huge amounts to insure that they’re the dominate team. OTOH, smaller manufacturers and independent teams might be fighting for a chance to be competitive and actually make some serious money.

          The shared revenue idea is borrowed in part from the NFL: all teams receive an equal amount of money from the TV rights and there impose strict player salary caps on all teams. This creates a base parity across all teams and allows small market teams to compete with teams in huge markets. Team can individually generate additional income from ticket sales, sponsorship, etc. This approach has be *very* successful.

    14. Mercedes has invested so far over a billion pounds in the power unit alone. Two years ago, they also spent almost £600 updating Brixworth, where the PUs are made. On top of that the FIA has forced them to sell their PU to Willliams, and Force India at a loss. It’s costing Mercedes almost 100 million a year to be in F1 after the prize. This is commitment. Anyone who thinks Mercedes is greedy is knob!!!

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