FIA Reveals Financial Challenges While Navigating the COVID Crisis
Former and current FIA presidents clash over the state of the federation’s finances
The Fédération Internationale de l’Automobile (FIA), the governing body for motorsport worldwide, has recently been embroiled in a debate over its financial situation. Former FIA president Jean Todt has criticized comments made by current president Mohammed Ben Sulayem, who claimed to have inherited a difficult financial deficit when he assumed office in 2021. However, the FIA has now opened up about the true state of its finances, revealing significant operating losses in recent years. This article delves into the financial challenges faced by the FIA and the efforts being made to rectify the situation.
A Challenging Financial Landscape
The FIA’s audited accounts reveal a worrying trend of operating losses in recent years. In 2019, the governing body reported an operating loss of €12.8 million, followed by €22.1 million in 2020 and €24 million in 2021. These losses were primarily attributed to the impact of the COVID-19 pandemic on motorsport events and the subsequent financial strain on the federation. However, the FIA aims to address this issue and reduce the deficit in the coming years.
Jean Todt’s Criticism
Jean Todt, the former FIA president, has taken issue with Mohammed Ben Sulayem’s claims regarding the federation’s financial situation. Todt argues that, apart from the last two years, the FIA’s accounts have been largely profitable. He credits the federation’s ability to adapt and quickly organize Formula 1 races despite lockdowns as a crucial factor in preventing potential financial disaster. Todt’s remarks highlight the differing perspectives on the state of the FIA’s finances.
FIA’s Response
The FIA has responded to the criticism by emphasizing the seriousness of the financial situation it faced when Ben Sulayem’s administration took over. The federation states that the financial state it discovered was unsatisfactory and unsustainable, with significant losses being incurred. The FIA’s senior leadership has made it their mission to sustain the federation, aiming for balanced books and ideally creating a surplus to strengthen equity and invest in research and development. The FIA plans to release its financial figures for 2021-22 in the coming weeks and 2023 figures in mid-June 2024.
Efforts to Reduce the Deficit
Under Ben Sulayem’s leadership, the FIA has made progress in reducing the operating losses. In 2022, the federation managed to reduce the operating loss to €7.7 million, with a projected loss of €3 million for the current year. The FIA aims to further reduce the deficit in 2024 and ultimately achieve a balanced operating result by 2025. These efforts reflect the commitment of the current administration to improve the financial stability of the federation.
Conclusion:
The recent clash between former and current FIA presidents sheds light on the challenging financial landscape faced by the federation. The FIA’s audited accounts reveal significant operating losses over the past few years, primarily due to the impact of the COVID-19 pandemic. However, the FIA is taking steps to address the situation, with the goal of reducing the deficit and achieving a balanced operating result by 2025. The transparency displayed by the FIA in revealing its financial challenges is commendable, as it underscores the federation’s commitment to sustaining itself and supporting its member clubs.