McLaren CEO Zak Brown has said that Formula 1 is now on a path to profitability after changes were made to the financial structure earlier in the year.
Teams had been lobbying for change to the financial structure of the series ever since Liberty Media took over ownership of the series in 2017, and earlier it was confirmed that a budget cap would be introduced to F1 from 2021.
Changes announced earlier this season confirmed that development will also be restricted and prize money will be distributed more evenly, and as such, it should mean costs will be reduced whilst also increasing the amount of competition throughout the grid.
The situation has also been brought further into the spotlight during the COVID-19 lockdown, with McLaren being forced to source extra finance, while Williams has been put up for sale.
But, with the changes having now been signed off by the FIA, Brown believes that teams should start to see a better return for their money.
“I think the teams did an excellent job over the extended winter to address the fiscal nature of the sport.” Brown said during Friday’s FIA press conference.
“As I think everyone knows, there was too big of a spread between first and tenth, which then plays itself out, also on track.
“I think if you can get a sporting franchise that is profitable, then I think the value of that franchise goes up significantly and so you get asset appreciation.
“I think all of our shareholders love being in Formula 1. I don’t think they’re in it necessarily to turn a profit, but they’re also not in it to lose substantial amounts of money, which has been the case for a lot of teams.
“And so I think we’ve landed in a place where there’s a path to profitability.”
While the changes should help teams financially, Brown also believes that it will make the series more competitive and that, that can only be a good thing for the fans.
“I think that it closes the gap between first and tenth. I think that’ll put a better product on the track ultimately.
“I think the fans win and I think it was a good compromise because the teams that were spending north of the cap have had to make some real compromises.
“I think that’s good because that’s going to be difficult and, at the same time, I do think that we have more wealth in the sport from the teams and some of the teams that I think were at risk of leaving were more about their frustration for [not] being competitive than not being able to afford the sport.
“So I think we found a good balance and I think Formula One’s going to really thrive in the future. “