F1 Teams to Get $10 Million Boost

All Formula One teams will get a $10 million boost this year once a deal to secure the sport's future has been finalised, according to Renault Sport chairman Patrick Faure.

"If, as I believe we will, we reach a definitive agreement, we will be able to count on an immediate initial benefit, from 2004," he said in a statement at the launch of the French manufacturer's new R24 car in Sicily.

"All the teams will receive a budgetary boost of around $10 million."

Carmakers, the banks that control the commercial rights and Formula One supremo Bernie Ecclestone agreed last month to pay the 10 teams a far greater share of the revenues in a restructuring of the sport.

The three parties have signed a memorandum of understanding on Formula One's future structure and a deal is expected this year.

The agreement ended the threat of a rival series by the GPWC group, made up of carmakers Renault, Ford, DaimlerChrysler, BMW and Ferrari. It also promised to make life far easier for cash-strapped smaller teams.

Engine Costs

Formula One spent much of last season wrangling over the idea of affordable engines, with a price tag of $10 million on the basic supply for a small team like Minardi whose engine bills are currently closer to $15 million.

Formula One sources estimate Minardi's annual budget at around $25-30, with a mid-table team like Sauber approaching $100 million and the wealthiest teams like Ferrari and Toyota in the $250 million plus bracket.

Ferrari's Formula One World Champion Michael Schumacher earns around $50 million a year, according to widespread media estimates. The sport itself generates estimated annual revenues of around $400 million.

While the sport's governing Concorde Agreement is confidential, McLaren boss Ron Dennis said last year that teams received only 23 percent of those revenues. Both privately owned Jordan and Minardi have struggled to raise sponsorship this year while Sauber have said that financial constraints are likely to prevent them from running a third car in Friday practice.

Faure said Formula One would be far more transparent in future and painted a positive picture.

"We are currently witnessing an economic upswing in Asia and the U.S. and, as the partners who have joined us this year demonstrate, F1 is an attractive shop window," he added.

"A better distribution of earnings and new sponsors are signs that F1 is moving in the right direction. There is still progress to be made in terms of cutting costs, particularly in terms of testing. That will be our priority as soon as the GPWC agreement has been finalised."