Liberty: We had to boost team values for F1 “ecosystem”
Liberty Media CEO Greg Maffei says it was important to help bump up the values of the Formula 1 teams in order to help the championship’s whole “ecosystem”.
At the recent US GP, team bosses noted that their organisations are set to become more profitable, thanks in large part to the introduction of the budget cap in 2021, which has reined in the spending of the big players.
Teams have also benefited from a more favourable Concorde Agreement, which was negotiated by former F1 boss Chase Carey last year.
Maffei says that helping the teams get into good shape was part of Liberty’s overall strategy.
“One of the important things was to help the ecosystem,” he said in a call with Wall Street analysts. “You've really seen the strength of the teams do so much better. And I appreciate all the kind words they now say about Liberty, and about F1's management.
“And I think that's because, guess what? The value of the teams has gone up dramatically. And we knew that was necessary, and the actions we took with the budget cap and the like, and changing some of the payouts, all were designed to create health of the ecosystem. And that's happened.
“So in many ways, the teams have gotten that success because it was necessary to make them healthy for us to get to build to the next level.
"The interest you're seeing from new entrants to come in and buy teams is only an echo of that success. So I think there's a lot of things that are setting up well for us.
“All those pieces about demand, all those pieces about the strength of the system, all set up well for future success. 2022 is going to be a step up, but certainly not the last one. I think we have a long trajectory of success in front of us. I'm very optimistic.”
Stefano Domenicali, CEO, Formula 1, with Greg Maffei, CEO, Liberty Media Corporation
Photo by: Mark Sutton / Motorsport Images
Maffei cautioned that, as the series continues to become more financially successful in the coming years, Liberty expects to claim more of the overall income, at the expense of the teams.
“I'm very happy to see the teams do well, as I think as I said that was necessary for the success of F1,” he said. “The new Concorde Agreement has some incentives, that as revenue and profits increase, we take back some of that which had been given over the last several deals.
“I already warned the teams expect more demands from us, based on how much success they've had. And they smiled...
“So we'll see how those negotiations go. But I'm optimistic we can continue to have success with the teams, as we've had over the last couple of years, and will both benefit.”
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