Lotus: Lopez wants to review the revenue distribution system
As Formula 1 enters a phase of reflection concerning budgetary issues, Gérard Lopez has indicated that the redistribution of prize money to teams should be reconsidered, perhaps by adopting a franchise system, which would be more equitable.
Should Formula 1 rethink its revenue distribution system? That’s what Gérard Lopez, the majority shareholder and director of the Lotus team, believes. He gave an interview to our British colleagues at Autosport.
Currently, the system is particularly generous to large structures: the biggest teams (Red Bull, Ferrari…) win a haul of 120 million euros each season as part of the commercial rights sharing, while a team like Lotus earns 49 million euros due to its fourth position in 2013.
Such a distribution was, in fact, validated by the Lotus structure two years ago when it ratified the bilateral agreement binding it to Formula One Management, led by Bernie Ecclestone, which manages the commercial rights of the discipline.
A different context
Despite everything, Gérard Lopez believes that the context has changed: « The sport needs to find a better way to ensure financial fairness. What was true two years ago may no longer be true, compared to where the sport is heading. »
There is specific reference to the issue of engine technology, which was supposed to lead to a reduction in expenses: « Two years ago, we were told that the engines would last longer and be cheaper than what we had, but they are now almost twice as expensive. »
And the sponsors’ money, harder to find, does not reach the level of these expenses: « Bilateral agreements are what was true two years ago. What is true today is that F1 still needs to attract sponsors, which is increasingly difficult compared to the early 2000s or the late 1990s. People thought it would happen like this two years ago. »
Lopez suggests the idea of a franchise system
The director of Lotus compared it to football: « It’s not a sport that can afford to lose many, if not all, of the teams. If you were playing in the Champions League, and there was a risk of losing Real Madrid, Barcelona, or Bayern Munich, you couldn’t imagine it. »
« It should be the same in F1. The idea should be to have almost a franchise system and work on how to make revenue redistribution more equitable, » he states. A system rarely used in sports in Europe, but much more in North America, it facilitates leveling the performance of participating structures by organizing a redistribution of wealth that aims to be as fair as possible and by establishing regulations governing expenses.
Gérard Lopez wants to be able to offer a more balanced field, at least on the sporting level: « I’m not saying that everyone should have the same thing, but how to ensure that each team at all levels has enough to conduct a good campaign and provide a good show. It would be too simple to say that we all want more money, because Formula 1 is designed in such a way that if you have more, you spend more. So, how to ensure that you can also stabilize the basic costs, so as not to have a situation that gets out of hand?
