05/02/2014
NEWS STORY
Formula E, the new electric racing series which launches in Beijing in September, will have 20 races on its calendar by 2019 according to a summary of the terms presented to the FIA.
Formula E will have ten races this year including rounds in Monaco, Rio de Janeiro, Los Angeles and London, where the series will come to a close in June 2015. However, a summary of terms which was presented to the FIA when it gave the green light to the series in 2012, reveals that there will be "10 in 2014, growing to 20 in 2019." They will bring considerable financial benefit to the FIA.
According to an article in the Sunday Telegraph by Pitpass' business editor Christian Sylt, the Formula E organisers have committed to paying at least €18m (£14.9m) to the FIA over the ten years of their contract. It comes at just the right time as the FIA's latest accounts, for the year to 31 December 2012, show that it made a net loss of €2.6m (£2.15m) on total revenue of €61.8m (£51.1m).
The biggest single component of the €18m payment is understood to be a €3.1m (£2.56m) share of the proceeds from an estimated €15.4m (£12.75,) investment in December in Formula E's Hong Kong-based parent company Formula E Holdings (FEH).
The investment was made by Causeway Media Partners, an American fund founded by venture capitalist Bob Higgins along with Wyc Grousbeck and Mark Wan, the co-owners of the Boston Celtics, the most successful team in the NBA basketball league. They join Spanish real estate tycoon Enrique Banuelos and Formula E's chief executive Alejandro Agag who are the majority shareholders of FEH.
According to the summary of terms, the FIA gets "20% of net capital gains of FEH shareholders in case of partial or total transfer of their shares."
The summary document also reveals that the FIA will receive fees of €50,000 (£41,300) from each of the ten teams and €100,000 (£82,700) per race which "should generate an additional revenue of €1.5m (£1.24m) for the FIA in 2014."
"FEH does not comment on specific terms of its agreement with FIA. The FIA-FEH agreement is focused on the development of the championship, as a close partnership between both parties," says Agag.
In comparison, the FIA received a total of €7.4m (£6.1m) from Formula One's teams and races in 2012 with a further fee of €7.9m (£6.5m) paid to the governing body for the use of the commercial rights to the series.
The summary shows that Formula E will pay the FIA an annual fee of "20% of Earnings Before Tax and 20% of single suppliers agreements." In itself this could be substantial as Agag has put together an impressive portfolio of partners.
McLaren is making the 300bhp electric motor which will power the Formula E cars. Watch manufacturer TAG Heuer will handle the timing whilst former F1 supplier Michelin will provide the tyres. Renault is the technical partner and, as Pitpass revealed last year Williams, is supplying the batteries.
Agag is also in talks with leading brands about signing a €20m (£16.5m) sponsorship which gives naming rights of the Formula E trophy and logos on every car. It won't be long before we see them all in action.