Ferrari and Mercedes will receive a much smaller share of F1’s prize money from 2021 under new plans for how the near-$1 billion fund will be shared out.

Formula One Management’s commercial rights holder Liberty Media presented its proposed changes to teams in Bahrain. RaceFans has learned from sources how it intends to cut top teams’ payments and hand more money to F1’s smaller outfits such as Williams and Force India.

Ferrari’s unique Long Standing Team payment, which by itself is worth more than some teams’ entire prize revenues, will be scrapped. The payment, worth $68 million last year, will be replaced by a $40 million payment which must be taken as company profits, RaceFans understands.

The Constructors’ Championship Bonuses and other special payments to teams will not continue under Liberty’s plan. Instead the prize fund will be more closely linked to where each team finishes in the constructors’ championship.

The fund will continue to be split equally into two columns, the first of which will be shared equally between the teams, as before. The second will distribute payments based on their constructors’ championship finishing positions. While the payment to the first-placed team will fall from 19% to 14%, the last-placed team will continue to receive 6%, and the incremental gaps between them are evenly spaced.

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Comparison: How F1 prize money will be shared under the 2021 arrangement

Based on the details of Liberty Media’s F1 prize money plan for 2021, RaceFans has modelled how much money each team could receive under the new structure.

For ease of comparison we have used the 2017 constructors’ championship finishing positions for each team and assumed a total prize fund of $1 billion. All figures are $m.

Teams’ prize money: Current structure 2017 c’ship Column 1 Column 2 LST CCB Other Total Ferrari 2nd 35.5 56.7 68 35 195.2 Mercedes 1st 35.5 67.4 39 35 176.8 Red Bull 3rd 35.5 46.1 39 35 155.5 McLaren 9th 35.5 17.7 30 83.2 Williams 5th 35.5 35.5 10 80.9 Force India 4th 35.5 39.0 74.4 Toro Rosso 7th 35.5 24.8 60.3 Renault 6th 35.5 31.9 67.4 Sauber 10th 35.5 14.2 49.6 Haas 8th 35.5 21.3 56.7 Total 1000 Teams’ prize money: 2021 proposal 2017 c’ship Column 1 Column 2 Total Mercedes 1st 50 70 120 Ferrari 2nd 50 65.5 115.5 Red Bull 3rd 50 61 111 Force India 4th 50 56.5 106.5 Williams 5th 50 52 102 Renault 6th 50 48 98 Toro Rosso 7th 50 43.5 93.5 Haas 8th 50 39 89 McLaren 9th 50 34.5 84.5 Sauber 10th 50 30 80 Total 1000

Teams’ prize money: 2017 vs 2021

Based on the estimate above, each team would gain or lose the following under the new prize money arrangement:

The new prize money structure will result in a flatter distribution of income across the teams. It will also mean the amount of money they receive more closely reflects their ranking in the constructors’ championship.

Ferrari and Mercedes stand to lose the most. While Red Bull will also see a substantial reduction in their payment, its owners will recoup some of this through the increased payment to its sister outfit Toro Rosso.

NB. Under the 2021 prize money structure Ferrari would receive an additional $40m which must be written to group profits. Each engine manufacturer would also receive an additional $10m. These are not reflected in the tables and graph above.

For full insight into how Liberty Media plans to shake up Formula One in 2021 read @DieterRencken’s new column later today on RaceFans. Find all his previous columns here

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2018 F1 season