By Stefan Kristensen
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February 18, 2022
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Does FIA Own F1?

Over the years, Formula One and the FIA have had a somewhat complicated relationship. The competition is currently known as the FIA Formula One Championship, which has led to much confusion over who actually owns Formula One as a contest and a brand.

In this blog post, I will touch on the history of Formula One's true ownership and the role of the FIA in the competition and brand.

What is the FIA, and What Does it Do?

The FIA, which stands for Fédération Internationale de l'Automobile (French for Automobile Federation), is the world's governing body for motorsports, not just Formula One.

The federation was founded in 1904 and is headquartered in Paris, France. The FIA oversees all aspects of motorsport, from grassroots racing to the pinnacle of Formula One.

The FIA has a number of responsibilities, including:

  • Regulating and overseeing all forms of motorsport
  • Issuing licenses and permits to drivers and teams
  • Establishing safety regulations
  • Promoting awareness and education about motorsport

Who Runs the FIA?

The FIA is run by a president, Jean Todt. The organization also has an Executive Committee, which includes two vice-presidents and four deputies. The committee’s members are elected by the General Assembly (the highest authority in motorsport) from among its membership.

In addition, there's the FIA Senate, which consists of representatives from each country to provide support for national sporting authorities within their regions or countries.

What Does the FIA do For Formula One?

The FIA oversees all aspects of the racing and rules in Formula One, including:

  • Ensuring that teams follow the rules and regulations set out by the organization
  • Regulating safety standards at FOM (Formula One Management) events such as Grand Prix races or testing sessions.

This includes ensuring that there are adequate barriers around tracks to protect spectators from flying debris if an accident occurs on track during practice, qualifying, or race day; it also involves checking for dangerous surface conditions like oil spills before any driving takes place in order for drivers and cars not to get damaged due to these hazards.

The FIA will stop an event altogether if they deem a particular area unsafe - this happened back in 2009, Lewis Hamilton crashed into the trackside safety posts during his qualifying lap at Monaco GP (he was subsequently disqualified from that session).

How Does the FIA Make Money?

The FIA makes money in several ways, including:

  • Licensing fees for drivers and teams to participate in Formula One or other motorsports events like WEC (World Endurance Championship) Le Mans 24 Hours races.

They also charge a fee if you want your name added as an entrant on the entry list at any one of these events - this could be anyone from manufacturers who make engines used by teams competing there (e.g., Renault), sponsors wanting their logos displayed prominently around Grand Prix circuits such as McLaren's sponsor Hugo Boss.

Even media companies like ESPN who have paid millions of dollars annually over many years so they can have exclusive broadcasting rights

  • A percentage of the income from the sale of television and media rights to Formula One races. This is a big money-spinner for the FIA as FOM has negotiated some very lucrative deals over the years with broadcasters, both terrestrial (e.g., BBC, ITV, Channel 4 in the UK) and digital/satellite (e.g., FOX Sports in USA or Sky Sports in the UK).

Who Owns Formula One?

The ownership of Formula One is a bit of a complicated beast, and there has been quite a bit of legal back-and-forth over the years about who owns it.

However, the main parties involved are the FIA and Formula One Management (FOM), with the latter owning most of the rights and collecting the lion's share of the profits from the F1 brand.

In simple terms, the FIA is the governing body for the competition, but FOM owns the Formula One branding.

What is Formula One Management?

In the early days of Formula One, the FIA was responsible for organizing and promoting races. However, when Bernie Ecclestone took over as CEO in 1978, he arranged all teams into an association called Formula One Constructors Association (FOCA).

This gave him control over most aspects of racing, such as TV rights and sponsorship deals. In 1981 FOCA became a limited company called FOM Limited which later changed its name to Formula One Administration Limited after it merged with ISC Holdings Ltd (a holding company owned by Ecclestone).

Today it's simply known as Formula One Management or FOM.

Ecclestone's 40-year reign as head of FOM ended in 2017 when Liberty Media purchased the company for a reported $4.4bn. Formula One Management still controls the commercial rights to F1 from under the umbrella of Liberty Media, owned by American billionaire John Malone.

How Does Formula One Management Make Money?

Like the FIA, FOM collects money through licensing fees and corporate sponsorships. However, its primary source of revenue comes from selling broadcasting rights to networks around the world.

Since FOM (owned by Liberty Media) owns the commercial rights to Formula One, they earn much larger profits from the championship than the FIA.

Formula One supplies its’ own global television feed for all the races. The feed is provided to the individual networks who have to pay a large fee for the rights to broadcast it. 

Race-sanctioning fees are responsible for the second-biggest chunk of Formula One’s revenue. A sanctioning fee is paid to F1 by race hosts to allow them to hold a race at their venue.

All of the racing venues you see on the calendar, from Monace to Silverstone, have paid a fee for the privilege of holding a Formula One championship race. Contractually, the hosting fees for races are kept confidential.

Despite taking over in 2016, Liberty Media and FOM didn’t make a profit from F1 until 2019. Losses of $37m and $68m were taken in 2017 and 2018 before 2019 saw the company take profits of US$17 million.

Written by Stefan Kristensen
Passionate about motorsports ever since I was a little boy. Back then, I cheered on the racing cars simply based on their colors. Later I fell in love with the many stories behind racing that make it so interesting.
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