The cash can be shared equally between the present Formula One groups as compensation for the dilution of their share of the game’s revenues.
- Last Updated: September 13, 2020, 6:57 PM IST
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Formula One’s 10 groups now have a transparent franchise worth after a rule change meaning any new entrant should pay $200 million to affix the grid, in keeping with Mercedes F1 boss Toto Wolff.
The cash can be shared equally between the present groups as compensation for the dilution of their share of the game’s revenues.
“I think it’s very important because it sets a floor for team valuation,” Wolff, a shareholder within the Mercedes crew, informed reporters forward of Sunday’s Tuscan Grand Prix at Italy’s Mugello circuit.
“I think such a franchise value is completely normal. It should be limited to 10 teams. It is something special, to have an entry into Formula One and that is valid for most of the professional sports leagues.”
U.S.-owned Haas are the final fully new crew to enter Formula One, in 2016.
McLaren boss Zak Brown mentioned the payment, which might be seen as a serious barrier to new privately-run groups ever coming in, protected the worth of current rivals and meant it made extra sense to purchase right into a crew than create one.
Former champions Williams had been lately taken over by U.S.-based Dorilton Capital for an undeclared sum that media experiences put at round $180 million.
Champions Mercedes had been beforehand Brawn GP and earlier than that Honda, BAR and Tyrrell whereas Racing Point, quickly to be Aston Martin, have a lineage from Jordan by means of Force India.
Formula One has seen a large number of groups come and go for the reason that championship began in 1950, with some failing to final lengthy sufficient to even race.
The USF1 crew had been as a consequence of enter as one among 4 all-new groups in 2010 however collapsed earlier than the beginning of the season and had been fined their 309,000 euro entry payment.
The different three groups that got here in have all since disappeared.
“If you believe in the franchise value growth of Formula One, you’ll get that $200 million back and then some at a future date,” mentioned Brown.
He mentioned the laws additionally gave business rights holders Liberty the flexibility to regulate the payment.
“I think what we’re trying to do as an industry is stop what we’ve had in the past where a USF1 announces they’re going Formula One racing and they never get to the track,” he mentioned.
“I think the $200 million is intended to really make sure that if someone is coming into the sport, that they have the wherewithal to do it.”