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Posted By: James Allen  |  05 Dec 2011   |  7:37 pm GMT  |  65 comments

This morning I took part in a teleconference with two of the principals of the Mercedes F1 team, Nick Fry and Norbert Haug.

The conference was called to discuss the name change for the F1 team, which will incorporate Mercedes’ high performance brand AMG and leverage the name through increased exposure on F1′s world wide media platform.

It will be called Mercedes AMG Petronas Formula One Team.

This is entirely logical and will help the company to increase the value it gets from involvement in the sport.

But there was also a chance to get the company’s reaction to the news of Ferrari and Red Bull withdrawing from FOTA and I asked both men if they can see a future for the organisation, despite the departures. Both know that the road ahead will be difficult and I sensed that they feel that there is a chance to bring Ferrari back into the fold, if they change some things about the way it is run.

It is increasingly clear that Ferrari quit because the trust has been eroded with Red Bull in particular and they feel that FOTA has been toothless in dealing with the situation.

The rump of FOTA, the nine teams still in the organisation, will meet tomorrow to plot the next steps and there is some punchiness on the part of teams like Mercedes and McLaren, who feel that the organisation is still badly needed and can find a way to work with the two outsiders on cost control in F1.

“I think it is absolutely vital that FOTA is existing,” said Haug. “The aims that we are having, the targets, are very important and I think it is up to the so-called top teams to really balance it out.”

“We’ve certainly hit a bump in the road,” said Fry. “But I believe that work will continue in the background to try and resolve this and we will do whatever we can to support that. It’s obviously quite a difficult time at the moment and clearly we, Mercedes AMG, are very supportive of cost control in Formula One,” he added.

“It’s a difficult thing to achieve when everyone is so competitive but we certainly will work with others to try and fulfil the aim of an RRA. I think even though Ferrari have withdrawn at the moment they also are intent on finding a solution to this.”

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65 Comments
  1. Anand R says:

    “It is increasingly clear that Ferrari quit because the trust has been eroded with Red Bull in particular and they feel that FOTA has been toothless in dealing with the situation.”

    Newey’s time to give Ferrari a taste of its own medicine.. goes back to early 2000′s when Ferrari and Schumacher pushed all rules and ethical boundaries to annihilate the field including Newey’s McLaren..

    1. thomas says:

      and McLaren have never pushed the ‘legal’ boundaries or …..wait for it…. cheated.

      1. Wayne says:

        For goodness sake, they have to deal with the here and now as do we all. What is the point of all these posts about that which has occurred in the past whether it be Ferrari and/or McLaren? There is no point.

        For once I completely agree with Ferrari, if FOTA are going to be toothless then it’s reason for being is removed and it becomes just another expense. They HAVE been toothless over the way RBR has interpreted the RRA and they HAVE been toothless over the move to pay TV in the UK. On both occasions they talked a great deal but when it was time to act they did nothing. I posted a rant about Ferrari yesterday and, if this is indeed the reason the left FOTA, I apologise and would back them 100%.

        It is time for people to accept that RBR have interpreted the RRA in a way that is different ot the rest of the field (to put it gently). As RBR have said they will quit when they are no longer winning, their long term risks are reduced and they want to spend money now as they have it. RBR will not be on top forever – I would be incredibly dissapointed with McLAren and Ferrari if they do not have a car at least on par with the RBR next year (they should have done so this year).

        Modern day Ferrari is a team I am warming too, it’s a new experieince for me having a Ferrari team I can ‘like’ if not support. Their escapades last year when they moved Massa over where nothijng if not open and honest and the other teams were patronising in the extreme for criticsing them, particularly RBR who often say one thing and run their team in a completely different way!

      2. Schmorbraten says:

        FOTA was formed to be in a stronger position in negotiations with FOM about the teams’ share in the revenue. That logic does still apply.

        Why do people now state that FOTA is useless if it can’t prevent a move to pay-TV or if they can’t agree on restricting spending? I don’t get it.

    2. What rules did Ferrari break when they dominated?

      1. Anand R says:

        There an interview with Newey where he mentioned his frustrations in 2000-2004 on how the regulations were suited to Ferrari, Schumacher in particular. I clearly remember reading that interview which was earlier this year and got a sense that this is his pay-back time. But, well, just my observation… maybe completely wrong.

    3. Tim. says:

      …a bit of a stretch there…IMO

  2. Tim Parry says:

    Hmmm. Mercedes AMG Petronas Formula One Team. Talk about watering down the brand.

    1. Cliff says:

      Mercedes provide AMG Safety and Medical Cars. Go into any Mercedes Dealer and see AMG developed cars and Brochures for sale.
      How is adding the name of your sporting brand “watering down the brand”? The problem Mercedes may have is making sure they don’t tarnish the AMG Brand.

      1. Tim Parry says:

        Rule 1 in any sort of marketing: ‘Less Is More.’

      2. Neil says:

        Sorry, but I disagree. There are counter examples to your “rule”. Saturation marketing being one.

        Neil.

      3. KGBVD says:

        I guess you never watched the “Bridgestone Presents the Champ Car World Series powered by Ford”

    2. Or strengthening their AMG brand as a true high performance branch of the company…

    3. Rich C says:

      But at least Fry referred to it as “Mercedes AMG” which isn’t too bad.

      There should be a limit on the length of team names – 20 characters should be plenty!

    4. Nikolai Currell says:

      I agree, my C220 has AMG alloys and branding on it, but it is just a C220 with no performance upgrades……..AMG used to be only the top perforance vehicles like a Prodrive Subaru used to be……now it is used in the basic cars too……

    5. bluefroggle says:

      Could be shortened to MAPFOT!

  3. David S says:

    James, that helps to understand Ferrari’s position but what about Red Bull?

    Are we therefore to believe rumours that Red Bull have been breaching the RRA for months?

    What’s the inside line and do the FIA have the power to sanction a team if indeed this were proved to be the case?

    1. Wayne says:

      It’s eye-wateringly irritating. As I understand it (do point out if I am wrong chaps) the FIA said ‘do something about costs or we will’. As none of the teams wanted the FIA crawling through their accounts they decided to implement a gentlemen’s agreement. When some teams decided that RBR were not sticking to that agreement they simply kept whinging about it rather than actually doing anything – in traditional F1 style. If I were Ferrari I too would be tired of this bunch of windbags monaing and groaning but refusing to act. I’m also not sure that Whitmarsh has what it takes to be a leader, either of an F1 team or of FOTA. This inaction could be his personality shining through… Damn I’d love to see Dennis back in the pit lane ranting and giving orders – say what you will about him but he was a leader.

      As for the FIA, I’m not entirely sure what I want them to do about this. Under Mosely they constantly meddled in everything, under Todt they seem to be invisible unless they are making incomprehensible stewards decisions at the track. Some middle ground called for?

      1. Sebee says:

        So you’re telling me that Whitmarsh should field a winner, police the other teams, and be the enforcer of the RRA?

        Come on, either get some forensic accountant to look at the books, or start treating the teams like the franchises they are with a hard spending cap – period. It’s not Martin’s job to audit RBR. That’s FIA’s job. If you want fairness in spending, you’re asking to have all of these teams open their black-hole books with millions upon millions disappearing into useless things with shelf life of 3 grand prix at best. F1 runs it’s house the way it wants, and if it wanted to do it fairly they could look to other sport leagues. In any other sports Ferrari would be paying a luxury tax to other teams like NYY. F1 is a strange beast and a money pit – one of the reasons why I keep saying American businesses don’t participate.

        I said it before and I’ll say it again, hard cap or let them spend what they want. At the end of the day what difference does it make to you or me how much they spend? Not your money. If some idiot is willing to pay 20M for a new wing that will go 0.05s faster in 3 GPs – let them pay. Eventually, these things take care of themselves.

        If you really want a gentlemen’s RRA agreement, then let you and I make one and let us stop supporting the brands on the cars. Which in turn will reduce their marketing budgets as the marketing effort will be judged not successful and terminated thus reducing the team’s budgets. Just look at Williams to see how quickly costs can be reduced – no RRA needed. No HP, BMW, FedEx – and no wins and 1/3 of the money spent if not less.

        I guess you can draw a conclusion that a good marketing program wins in F1. And that’s why I said below that Red Bull is the ultimate modern F1 business model. Because their marketing budget is sound as can be, and they run no risk if they push the rules too far because it has no impact on their product image. What’s awesome about Red Bull is that as they spend and capture championships they also build value in the two teams they own. I tell you, just an amazingly smart F1 business model which Benetton prototyped, didn’t they?

      2. Wayne says:

        Oh I agree completely with the ‘hard cap or total spend’ backbone of your post. I’ve said all along that the RRA is a marketing farce. But, farce or not, that’s what they agreed to so they must take action, rather than simply complain like children, when they think someone is not abding by the agreement.

  4. Ashish Sharma says:

    James,

    How feasible is to police the RRA (which i understand is at the crux of this fight with allegations about Red Bull being thrown around for quite some time).
    While most of us have heard about the RRA the details are not exactly clear, eg. what is policed, who does the policing and what are the realistic penalties (i think you had mentioned in an article about a reduced budget for the next year)
    Would be good to hear the details from you or one of the teams.

  5. goferet says:

    This morning I took part in a teleconference with two of the principals of the Mercedes F1 team, Nick Fry and Norbert Haug.
    ————————————————-

    Aah the circles you move in JA on F1, congratulations to you Sir!

    Now the new Mercedes name is interesting, am guessing the drivers will have to say it in full each time they say something about the team though I would have thought it more fitting if it were Daimler mentioned somewhere in that!

    Now Ferrari, as always the biggest prima donna EVER for any true F1 fan knows they will be back in the FOTA fold.

    All that’s needed for Ferrari to get it’s way is throw around some threats & if that doesn’t work then it’s on to plan B i.e. throwing a tantrum & voilà in no time, everything is A-Ok!

    1. andrew says:

      Is it true that James has been Knighted (KBE)? I’m sorry if I’ve missed a beat here in America.

      1. goferet says:

        @ andrew Hahaa now there’s an idea. Maybe we can start a petition, JA on F1 for the OBE. Yay!

    2. Andy C says:

      For what its worth, I dont necessarily disagree with Ferrari on this one, if the rumours of Redbull spending (and alleged ways of getting around the spending cap are true).

      I believe FOTA is a good entity with a decent aim. I dont believe however that any departures from the rules should be accepted.

      Ultimately Ferrari know that Bernie is on their side, so they wont be worried.

      Will be interesting to see it develop.

  6. Wll says:

    Yeah, FOTA, always blame the team that does the best job and kicks your butts.

    And then try to change things so it suits your own team more…FOTA is a waste of everything.

  7. Sebee says:

    OK, the truth here is clearly that Red Bull is “THE” modern F1 Team business model.

    It is in a very high margin business of beverages.

    It is selling a lot of them so it’s rich, and it’s main selling tool are extreme marketing efforts – which is why F1 fits perfectly.

    It does not sell engines, transmissions or aero packages to us “users” – meaning if it cheats on any of these areas in F1 it’s not like you will liken it’s product to being inferior because of the F1 technical infringement. Because Red Bull is selling us drinks, not cars with engines, transmissions, etc.

    This is what has Ferrari irritated I think. Red Bull is a money printing machine, who can bend the rules as needed to win because consequnces are minimal and it will not paint Red Bull product in bad light if they are “extreme” or “over the edge” on the rules. If Ferrari is caught cheating that directly paints the product they are trying to market us in F1 in inferior light – as in they don’t achieve performance through excellence but through cheating. So they can’t push the rules as far as Red Bull – I think.

    Mr. Mateschitz is no soft businessman. Not intimidated by Ferrari legacy or history. He plays hard ball, and dare I say – he has put himself in a perfect position to push Ferrari to the wall if he wished. Plus it’s all just a marketing plan, vs. Ferrari for whom this should be their “core” are of excellence. Ferrari did it to others for years and he thinks it’s time for them to suck it up for a while and be on the receiving end of big budget. The bar has been raised Ferrari, and it looks like they have met their match.

    I like it! As a Ferrari fan too. Let’s hope they raise their game.

    1. Sebee says:

      How above point relates to FOTA article and need for it to police budgets? If I remember right, Ferrari were the ones objecting to a hard cap and to the resource rules being strict – now they are complaining about another team’s budget and asking for enforcement? I believe it’s called Poetic Justice.

      1. [MISTER] says:

        Ofc they complain if they all agreed on certain rules and somebody break them. Would you stop cheer for Ferrari (like you do for RBR) if they would just go next year and spend the 3 times agreed budgets?
        No, I bet you will trashtalk them in everyway possible.

      2. [MISTER] says:

        The second sentence in the above post should say: “Would you START cheer…”

      3. Sebee says:

        I would not trash talk them at all. I was wearing Ferrari socks for 6 years (not same pairs of course) when they were steam rolling the grid 00-06.

        I know it’s unrealistic way of thinking that I have, but I’m tired of all this politically correct way of racing. F1 is what F1 is – the most expensive and wasteful way to go fast. And this is why most of us love it. No one was telling McLaren how much to spend when Senna was there – except for Ron. No one was telling Benetton how much to spend, or Ferrari. Suddenly, everyone is watching everyone else’s wallet. As my mom used to tell me, keep your eye on your own plate son. Hard cap, or suck it up Ferrari. Not like you don’t get a “bonus” from Bernie each year. You can afford to pay off Kimi for 30M, you can afford to suck it up and put a winner on the grid and not worry about Red Bull’s wallet.

      4. thomas says:

        Ferrari lost the most but eventually agreed to RRA for the ‘greater good’. Enough rumours surface to suggest, at best, RBR have some great creative accountants and your taking a pop at Ferrari for feeling hard done by. LOL

        To their detriment and McLaren’s too the new modern management style has let Marko and Newey get the upper hand (Horner is of no consequence!).

        If a cap can’t be enforced then it’s unfair and a return to a free market is the only option.

      5. Sebee says:

        Creative accounting or not, Red Bull have two teams and in my view can spend two teams limit in total on their F1 marketing efforts.

        It’s just payhetic to hear that Ferrari is complaining. With their own tracks and countless other resources which are probably not counted toward the totals on their side.

        Again – I’m a Ferrari fan, and I always sai either let them spend what they want or introduce a hard cap. These soft measures are pathetic and were never going to work.

  8. Uppili says:

    James,

    Can you clarify if only Redbull F1 team has quit FOTA in the Redbull umbrella or STR as well?

    1. James Allen says:

      Just Red Bull, so Mateschitz and Horner know the FOTA inside track from Tost

      1. tom in adelaide says:

        Would FOTA consider expelling Torro Rosso?

  9. Janis1207 says:

    Well, RB wants to remain on top (keeping this nice Winners! image), and Ferrari can’t forget the glory of their “Dream Team” years. Both see increased spending as the only way to be on top.
    Neither wants to take the additional risk of competing on equal budgets (not just with each other, but with McLaren and Mercedes as well).
    For them winning is everything, so, I am afraid things are not looking particularly bright there.

    BTW, is it really 9 teams in FOTA now? I thought HRT also left it some time ago.

    1. 12 teams minus Red Bull Racing, Ferrari and HRT equal 9, doesn’t it? :)

  10. John_C says:

    That’s a fascinating response from Mercedes, essentially saying that Red Bull are the issue and Ferrari quit FOTA because it wasn’t strong enough to control Red Bull.

    Can’t help feeling there is much, much more intrigue to come on this…..

    1. Liam in Sydney says:

      Indeed, never is all the correct information in the press release!! :)

  11. Ralph says:

    James, can you elaborate on the Ferrari don’t trust Red Bull bit of this please?

    Is it that Ferrari think Red Bull have spent more than the agreed amount?

    By much?

    Are any of the other teams accusing Red Bull of whatever it Ferrari believe Red Bull have done?

    Why have Red Bull left FOTA?

    1. Martin says:

      Hi Ralph,

      A possibiity for Red Bull is that it is aligning itself with Bernie, who doesn’t FOTA. Red Bull might see it as a way to position themselves as the second biggest team after Ferrari, which might help in terms of special deals for more money.

      Cheers,

      Martin

  12. Adam Murawski says:

    Arent they nothing else to do? I mean instead of making super long names like ”mercedes petronas amg germany racing formula one team best peace” they should focus on making 7 world champion an their young talent win something…

    1. Rich C says:

      They have a lot of Marketing People that needed something to do.

    2. K says:

      They returned to F1 for something (marketing the Mercedes and now AMG brands), not just for the sake of fun and racing.

  13. PeteH says:

    I’m more inclined to think ferrari left because it’s what they do best – they’ve always been one for a good flounce.

    1. Doobs says:

      The off-track machinations are what Ferrari do best. Shame they don’t give World Championships. It’s why they have survived for so long.

  14. Darren says:

    I hope they can find a way forward and bring Ferrari back into the group. It seems a very silly time for FOTA to be showing fractures. Bernie will be smiling for sure.

    Are there penalties that can be handed out if a team were breaching the RRA? At the moment it seems Red Bull have nothing to gain from being in FOTA. They are happy to spend big if they can. And they can probably get a better deal out of Bernie by being a rebel team and getting in first to secure a deal.

  15. Mark V says:

    It seems (from my outside perspective at least), that Ferrari believes it deserves special treatment. As the longest running, most popular F1 team in history perhaps this is not an unreasonable belief.

    At any rate, this leads me to wonder how much power Ferrari actually has and how far they are willing to go to assert it. Perhaps the biggest hypothetical question is whether Ferrari needs Formula 1 more than Formula 1 needs Ferrari? If Ferrari once again threatened to start their own series like FOTA did few years back, how many teams would feel compelled to follow suit?

  16. Carlo_Carrera says:

    FOTA was stillborn at the start and is now being buried.

    The teams can never police themselves or each other. They need to set up a separate entity of non-F1 people to act as governors to police the policies and rules the teams establish. Much like the NFL in the USA. The problem is the FIA is the real rules makers so the teams can’t really govern anything.

    If the teams could separate F1 from the FIA then they could control their own destinies. But that is not going to happen, so in the end FOTA is still dead.

  17. [MISTER] says:

    James,
    I keep reading peoples comments about this deal that Bernie is trying to make with teams and that this FOTA problem is helping him achieving this.
    My understanding is that the deal refer to how much money each team gets from Bernie (from circuits money, ty rights, etc). Is that right?

    If that’s the case, each team negociates and has its price? I thought that this is decided with all teams in Formula 1 and there is a certain percentage that each team will get. From some of the comments above I get the impression that certain teams can negociate this.

    If teams can individually nogociate and agree on this with Bernie, what would happen if the 2-3 teams sign with Bernie and the rest don’t agree on any figures?

    I appreciate any clarification on this. Thanks!

  18. thomas says:

    Two teams, double world champions x2, millions on Newey, creative accounting, prepared to develop a new circuit when Bernie needed him …. Mateschitz is no soft touch and is playing the game.

    With Todt, Denis & Flav, having been ‘moved’ on he’s still playing old skool. Good job :)

  19. Rich C says:

    So the clear implication is that RB are doing some of that “Hollywood Accounting” I predicted and Ferrari is getting beat at their own game?

  20. Pete S. says:

    “the trust has been eroded with Red Bull in particular”

    I think we’re all a little curious as to what exactly is going on here.

  21. Roo F1 says:

    AMG supportive of cost control. The hypocrisy and PR speak is ridiculous.

    If they said “we are clutching st straws because our car is so slow”, at least honesty is respectable.

    Who cares about all this guff. Winning is the only thing that counts. If McLaren can build a car next year, none of this will matter.

    1. Andrew Carter says:

      How very short sighted.

  22. Craig in Manila says:

    Anyone want to jump on-board the conspiracy theory that Mercedes are not terribly happy about having their brand directly associated with a losing Team and that another year of poor results will lead to it becoming “AMG Petronas (powered by Mercedes) Formula One Team” then another year and, voila, “Mercedes” is mentioned no more in the team-name and they quietly become an engine-supplier only (in a Renault-esque kinda way) ?

  23. Steve Mizzi says:

    In my opinion there 2 separate but interlinked issues that have forced Ferrari to quit FOTA.

    The Resource Restriction Agreement and the blown diffuser issue.

    It has been a known secret for some time that there were suspicions and allegations that Red Bull and Mercedes were in breach of the RRA. An agreement which I feel hurts Ferrari the most due to the fact that over the years it has been the team that has invested the most in facilities such as tracks, wind tunnels,etc. However for the common good it accepted it and adhered to it.

    As regards the blown diffuser saga the FIA had specifically declared it illegal and come Silverstone, the only race were it was banned Ferrari win, but mysteriously agree to allow it for the remainder of the season because Red Bull and Renault said they would suffer reliability issues; since when has reliability been a pre-requisite for an F1 team to participate? This basically meant handing the championship to Red Bull on a silver platter.

    In my opinion Red Bull has been holding the other FOTA members to ransom for some time now and rightly so Ferrari has had enough of the rest of the team’s appeasement.

    Going back to the RRA, this can never work when you have two teams controlled by the same owners, how can you stop Red Bull from using Torro Rosso resources to test concepts, who is to say that Torro Rosso wasn’t being used to test components on the car during races before being implemented on Red Bull.

    Lewis Hamilton is right in saying that Red Bull is a soft drinks company and unfortunately this means that they are in it purely for the marketing exposure and lack the passion for the sport. Enzo Ferrari started selling road cars to have the money to go racing, Red Bull go racing to sell soft drinks.

  24. Matt W says:

    James, is the RRA an actual sporting regulations or just a legal agreement between the teams?

    If it is a sporting regulation, surely the FIA have some mechanism in place to police it?

  25. JC says:

    I must say I admire Newey’s creative engineering since the Leyton House March days, so a RBR fan too. Having witnessed the fantastic first win by Vettel at Monza with the Toro Rosso, a Seb’s fan indeed.
    My take on this: RBR knows that 2012 will be extremely difficult and won’t compromise on the RRA to keep winning. All pure speculation due to the very limited info on the RRA details, but with what appears Ferrari and Mc Laren mega teams “limiting” the mega budgets slowly, so hard to argue with RBR position which may be required to keep at the top…

  26. Janis1207 says:

    Just FYI: Mercedes are going to utilize some pretty smart software to figure out what the other competitors are doing – and probably for analyzing their own performance as well.
    http://www.newscientist.com/blogs/onepercent/2011/12/paul-marks-senior-technology-c.html

  27. Michael C says:

    I certainly hope the rest of FOTA do stick together as Bernie seems very keen to divide and rule again and Ferrari and Red Bulls actions play right into his hands. Red Bull would not be missed if push came to shove and Ferrari have thought that they were bigger than F1 for a very long time and perhaps should put this to the test

  28. Aeomer says:

    I think RBR’s problem with the RRA has been forgotten in this thread. Part of the RRA is a moratorium on technical staff being on site at the track for 24 hours a day. All the teams, including RBR agreed to this for financial and social/safety reasons. Having technical crew working through the night for four days straight is crazy – and the teams finally agreed. However, RBR say their marketing staff do not form part of the technical team and therefore should be excluded from the RRA. However, a number of the other teams publicly say they think all staff connected to a team should be part of the RRA even if they are *not* actually part of the technical team. This means if a marketing person needs to meet a sponsor at the track then they would only be allowed to do so at particular times. My personal experience is the people with the big-bucks don’t like to be told when they can visit a facility. Anyhow, at least in public RBR are sticking to the RRA for technical staff and budget spend related directly to actual racing but they don’t consider marketing part of that restriction. From their point of view it seems quite reasonable. After all, how can you stop RB (the drinks company and main sponsor) from spending as much as it likes on marketing? (That’s rhetorical question)
    If the RRA does try to limit marketing spend then Merc, Ferrari, Lotus, Renault, Allianz, Pirelli, AMD and everyone else who uses F1 to convey their brand will be restricted in how much they can spend – that would mean their marketing spend would be restricted to F1 only – and that would be a very poor return on investment. Of course RB (the drinks company) has obscene amounts of cash to spend on such activity, and there in lies the disagreement with many of the other teams. In reality, I don’t believe the other teams actually mind the RB spend or indeed the RBR spend to keep RB happy, they just want to find any way possible to try and cause RBR to lose focus by fighting pointless battles – it’s not called the Piranha Club for nothing. Not to mentions the fanbois who will swallow anything if it makes their chosen team sound “good” and others “evil”.

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