66
THE DYNAMIC ECOSYSTEMS OF MAJOR SPORTS
and owner of the commercial rights – to include broadcasting–and the cluster
of commercial racing enterprises under Ecclestone holding a pile of exclusive
leases to manage the sports commercial rights. Thus the Formula One Group
does all the promoting, arranging, publicising, schedule-making, track ap-
proving, almost wholly within the Ecclestone’s commercial structure.
F1 integrity governance also falls to FIA. Its International Court of Appeal
(ICA) is the final authority on disputes resulting from the application of FIA
rules. The ICA consists of up to 18 Titular Members of differing nationali-
ties and an equal number of Deputy Members. All serve three-year terms, a
third of which begin each year. FIA also refers some particularly eventful mat-
ters – such as the 2008 Team Renault “Crashgate” and the 2010 Team Ferrari
German Grand Prix “overtaking” controversy, both of which advantaged Fer-
nando Alonso in the Drivers’ Championship standings – to its affiliated World
Motor Sport Council, for inquests, investigatory hearings, and rulings.
In terms of revenue flows, the non-profit FIA receives sizable F1 super-licence
fees from drivers who pay according to their previous year’s performance; the
top of the championship table pays close to $400,000 for a single-year au-
thorisation, and last year FIA introduced a system of requiring principal team
members, managers, and engineers to obtain licences that permit their par-
ticipation in Grand Prix events (with the consequent possibility of revocation
in the event that teams members violate FIA rules). FIA also collects 30 per
cent of broadcast revenues negotiated by Formula One Management. For its
part, the Formula One Group takes 23 per cent of the television revenues, all
promoter’s fees, as well as licensing fees from merchandisers, game develop-
ers, and fantasy leagues.
Governments in countries where Grand Prix race are run are often sizable in-
vestors in F1 that expect large returns in prestige and in the national economic
interest. For example, to run the first Singaporean Grand Prix, the city-state’s
government covered approximately 60 per cent of the $150 million in costs.
Singapore entertained 30,000 tourists for the race, realised some $20 mil-
lion in additional hotel taxes alone, and reached its goal of $70 million in
F1-driven tourism.
42
The well-established Japanese Grand Prix, with a much
lower level of government funding at some $4 million in 2008, produced a
reported economic impact of $70 million–a whopping 1,750 per cent return
on government investment. A 2005 study showed the Australian Grand Prix
© MONITOR QUEST LTD. 2011
GUARDING THE GAME Preserving the Integrity of Sport
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