$450 million payment for Cadillac to join F1 is too low

Mercedes crew principal Toto Wolff says groups haven’t been supplied sufficient cash to make up for the losses they face if Cadillac joins Method 1 subsequent yr.

Method One Administration launched a $200 million (£164m) anti-dilution charge for newcomers when it agreed its final business take care of groups, which expires on the finish of this yr. Cadillac is reported to face a $450m cost to affix subsequent yr’s championship.

The charge could be shared between F1’s current 10 groups to make up for his or her discount in prize cash because of the fund being shared to a further crew. However Wolff believes it’s inadequate.

“Within the first occasion, we lose out,” he informed Auto Motor und Sport. “We don’t know what Cadillac will spend money on Method 1.

“The compensation charge, which is at present set at $450 million, is just too low. It doesn’t make up for the direct loss in revenue.”

Whether or not groups will in the end profit from the game increasing to incorporate one other crew will depend on what they create to the game, stated Wolff.

“Solely time will inform what worth the game good points from having an eleventh participant. If the game’s worth will increase, then everybody advantages.

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“However we simply don’t know but. Nobody has spoken to me about Cadillac’s actual plans.”

“If Cadillac enters now with a works crew and invests an applicable advertising and marketing price range into Method 1, it is going to be a useful addition to the game,” he added.

Nevertheless Wolff stated F1 is bringing good returns for Mercedes. “We make a stable revenue,” he stated. “Our profitability margin stands at 30 to 35 p.c earlier than tax. This even offsets our expenditures on the engine.

“The outdated cliche that Method 1 is only a cash pit is a factor of the previous. In abstract, Method 1 has by no means been as financially wholesome as it’s at this time.”

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