$450 million payment for Cadillac to join F1 is too low

Mercedes team principal Toto Wolff says teams haven’t been offered enough money to make up for the losses they face if Cadillac joins Formula 1 next year.

Formula One Management introduced a $200 million (£164m) anti-dilution fee for newcomers when it agreed its last commercial deal with teams, which expires at the end of this year. Cadillac is reported to face a $450m charge to join next year’s championship.

The fee would be shared between F1’s existing 10 teams to make up for their reduction in prize money as a result of the fund being shared to an additional team. But Wolff believes it is insufficient.

“In the first instance, we lose out,” he told Auto Motor und Sport. “We don’t know what Cadillac will invest in Formula 1.

“The compensation fee, which is currently set at $450 million, is too low. It does not make up for the direct loss in income.”

Whether teams will ultimately benefit from the sport expanding to include another team depends on what they bring to the sport, said Wolff.

“Only time will tell what value the sport gains from having an 11th participant. If the sport’s value increases, then everyone benefits.

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“But we just don’t know yet. No one has spoken to me about Cadillac’s exact plans.”

“If Cadillac enters now with a works team and invests an appropriate marketing budget into Formula 1, it will be a valuable addition to the sport,” he added.

However Wolff said F1 is bringing good returns for Mercedes. “We make a solid profit,” he said. “Our profitability margin stands at 30 to 35 percent before tax. This even offsets our expenditures on the engine.

“The old cliche that Formula 1 is just a money pit is a thing of the past. In summary, Formula 1 has never been as financially healthy as it is today.”