FIA sheds light on ‘unsustainable’ deficit dismissed by Todt

The FIA has released new information about its difficult financial situation in response to former president Jean Todt’s suggestion that the severity of the governing body’s deficit has been overstated.A year ago, current president Mohammed Ben Sulayem revealed that among his priorities in taking office was tackling a $20 million deficit inherited from the FIA’s previous administration."There was a financial issue that we didn't know about," he said at the time. "We had a deficit, even before the pandemic, but I'm pleased to have cleared that."But this week, in an interview published in French daily L’Equipe, Todt criticized Ben Sulayem’s negative portrayal of the institution’s fiscal situation."Each year, the accounts have been largely profitable, except the last two years, marked by the COVID crisis, which could have finished the federation if we had not succeeded in quickly building the conditions which allowed F1 to be the first international competition to be organised despite the lockdowns."Read also: Todt defends FIA reign against criticism from Ben SulayemResponding to Todt’s comments, the FIA maintains that the situation has not been exaggerated. Instead, it has provided more details about the state of the finances when Ben Sulayem took over, stating that they were "unsatisfactory and unsustainable."In the face of declining revenue amidst the COVID-19 pandemic, the FIA's operating losses escalated from €12.8 million in 2019 to €24 million in 2021.However, upon Ben Sulayem's assumption of the presidency, the governing body implemented cost-cutting measures and revenue-generating strategies, resulting in a significant reduction in the operating loss to €7.7 million in 2022 and a projected loss of €3 million for its fiscal year 2023.The FIA now aims to further shrink the deficit in 2024 and achieve a balanced operating result by 2025, ensuring its financial stability for years to come."As the FIA president outlined during the annual general assemblies week in Baku, the FIA has been transparent in revealing that soon after the new presidential team took office, the financial state that was discovered was unsatisfactory and unsustainable," explained a spokesperson for the FIA."The federation was incurring significant losses."The senior leadership's mission is to sustain the FIA, and while we are not for profit, we do need to at least have balanced books and ideally create a surplus to strengthen equity for unforeseen events and to invest in research and development in the areas of safety, technology, and regulation across sport and mobility and to meet our primary purpose of supporting our member clubs."We will be releasing figures for 2021-22 in the coming weeks and 2023 figures in mid-June 2024 for the extraordinary general assembly."Keep up to date with all the F1 news via Facebook and TwitterThe post FIA sheds light on ‘unsustainable’ deficit dismissed by Todt appeared first on F1i.com.