The threat of an embarrassing court action hangs over the showpiece Belgian Grand Prix as the controversial finances of Formula One were called into question last night.
Bernie Ecclestone’s Formula One World Championship company announced yesterday that the sport’s ten teams shared a record £538 million in prize-money last year.
However, the sport’s smallest teams complain that the lion’s share goes to the four biggest squads — Mercedes, Ferrari, McLaren and Red Bull.
The plight of the minnows could be played out behind the glossy façade of the paddock at Spa-Francorchamps this weekend where Lotus, one of the sport’s most famous names, faces having its cars impounded by bailiffs.
Charles Pic, a former test driver, has taken legal action, claiming that Lotus reneged on promises to allow him to drive the team’s car. Negotiations were taking place last night but the bailiffs are circling and threatening to impound the glamorous black-and-gold racing cars — estimated to be worth £1 million each — and all of the team’s equipment at the end of the grand prix tomorrow.
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The legal action is the latest in a series that underlines the contradictory finances of a sport led for four decades by Mr Ecclestone, the billionaire chief executive, and controlled by CVC Capital Partners, one of the City’s most successful private equity groups.
Television’s insatiable appetite for live sport has driven huge growth but that is faltering as viewers switch to new media. Accounts for last year show that pre-tax profits dropped from $292.6 million the previous year to $270.9 million. However, income was up to $1.352 million (£843 million) last year, $58 million ahead of 2013.
Revenue was driven by “strong growth in revised TV rights arrangements in Spain and the Middle East, along with contractual uplifts in other TV contracts”. Mr Ecclestone announced that RTL, the major terrestrial broadcaster in Germany, had signed a new two-year deal, worth an estimated £40 million annually.
Mr Ecclestone has set his sights on keeping the BBC on board and urged the corporation to renew its £150 million deal, which runs out in 2018.
“We are not interested in the money, we are interested in entertaining the public and doing a service. That’s what we are there for,” Mr Ecclestone said. “It would be good to continue. It works at the moment, so there’s no reason why it should change. We have a good contract and we want it to continue.”
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The BBC needs marquee sports after a run of losses to rivals. The International Olympic Committee announced last month that it has sold the rights to the Olympic Games from 2022 to Discovery Communications, the owners of Eurosport. For the first time since 1960, the BBC will not control coverage.
That comes after losing a series of key live events, from the Open Championship of golf and the Rugby World Cup to the Football League to rivals such as ITV, Sky Sports and Channel 5. However, the BBC shares Formula One coverage with Sky Sports, showing only ten of 19 races live.
Increasing revenues are not helping the small teams, who are smarting from massively increased costs and relatively small payouts from Formula One’s prize pot. Payments to the teams rose 8 per cent last year from $797.5 million (£497 million) to $863.1 million (£538.3 million), but the biggest payments have left the three smallest, independent squads — Force India, Lotus and Sauber — in the cold and struggling to stay on the grid.
Formula One lost two teams, Marussia and Caterham, last season and fears are growing that Lotus could be the third unless the team can solve its high-profile legal issues. Formula One already faces the prospect of an investigation into its governance and finances by the European Union’s competition commission, although no decision has been made yet.