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The end of the road for F1 Teams’ Association
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Posted By: James Allen  |  28 Feb 2014   |  12:56 pm GMT  |  42 comments

The F1 teams’ Association, or FOTA as it was known, has been disbanded. The seven remaining members of the union decided not to continue after meetings in the last week.

A spokesman told the BBC, “I can confirm that FOTA has been disbanded, as a result of insufficient funds to continue, and lack of consensus amongst all the Teams on a revised non-contentious mandate”.

FOTA was formed in 2007, with Ferrari president Luca di Montezemolo the driving force, along with McLaren’s Ron Dennis and Flavio Briatore, then head of Renault. The idea was to stick together in crucial negotiations with the FIA and with commercial rights holders CVC and Bernie Ecclestone. Ecclestone himself had risen to his current position by convening the teams and negotiating on their behalf in the 1980s.

FOTA’s best work came in the global financial crisis, where it organised a cost saving plan called the Resource Restriction Agreement, which regulated things like wind tunnel use and the size of travelling pit crews as well as working with the FIA to reduce the number of engines needed for a season. A significant amount of money was saved.

Together with this website and with Santander UK, it also created the FOTA Fans Forum events starting in 2011, giving around 250 fans at a time the opportunity to meet face to face with team principals, drivers, engineers and managers to discuss the sport that both sides love and to ask questions and make suggestions.

The beginning of the end for FOTA came as the world began to emerge from financial crisis and teams like Red Bull and Ferrari wanted to spend more money than the proposed Phase 2 of the RRA would allow. At the same time, Ecclestone cleverly picked off those two teams and signed them up to the end of 2020 on generous commercial deals to participate in the F1 World Championship. They left FOTA at the end of 2011 and were followed out of the door by their affiliated teams, Toro Rosso and Sauber.

This left seven teams continuing to work together with the FIA, Ecclestone and the four outlying teams on cost saving and other measures.

The formation last year of the F1 Strategy Group, featuring the FIA, Ecclestone and the six leading teams, meant that the governance of the sport changed emphasis and this group is forging ahead with a cost cap for 2015 which, although it will be set high at the outset, will eventually glide down to a level which should make the teams able to return a small profit on their activities.

This was the subject of further discussions at today’s meeting of the F1 Strategy Group, with FIA president Jean Todt telling me earlier this week in an interview to be published soon in the Financial Times, that, “As the FIA I feel that we have a responsibility to the sport to make sure that F1 is less expensive. It has to happen this time.”

The losers from the demise of FOTA are the small and medium sized teams in many ways as they were part of the collective bargaining and their voice is heard less now with the F1 Strategy Group driven by the richer teams, making the decisions.

[More to follow]

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42 Comments
  1. Paul D says:

    Shame from the fans perpective as FOTA recognised the importance of interaction with fans and gave them a voice (via the fans forums).

    I hope F1 recognises this and continues to offer something in a similar format.

    1. J.Danek says:

      I hope F1 recognises this and continues to offer something in a similar format.

      Paul D., respectfully, surely you’re not that naive?

      It’s quaint this idea that one can infer from posts in F1 forums and comments sections made by diehard and/or genuinely passionate fans of the sport: that we’re somehow (collectively) considered a stakeholder whose concerns should be acknowledged and factored into high-level decision-making in the governance and operation of F1.

      OK, of course there are examples of very fan-centric behavior by even the biggest teams (witness Mercedes opening its simulator last Fall [2013] to a few lucky fans…though these initiatives often seem to be driven or originated by savvy or even genuinely fan-friendly media professionals like James who’ve been cultivating and serving their audience, and not just exploiting them).

      However, in the aggregate, to the decision makers at CVC, FOM, FIA, etc., F1′s audience is simply an asset comprised of fans whose passion and love for the sport can be leveraged and exploited to drive growth in (or hopefully at least sustain) the revenue generated from Formula 1′s real “customers”, the TV broadcasters who pay for the privilege of televising races, and the sponsors who pay to be able to deliver a marketing message embedded in the pseudo-sporting spectacle of (kinda)fast car and (what used to be) glitz and glamour.

      We’re lucky if “F1 recognises” we even exist…

      1. James Allen says:

        A very interesting post. I am discussing this with the teams at the moment. You are right in man ways and one wonders what comes next..

      2. J.Danek says:

        A very interesting post.

        Thank you – it’s a result of the broad-based, interesting, stimulating reporting you do…w/o that, there’d be nothing interesting to post in response to! ;)

        I am discussing this with the teams…

        Keep us posted, eh?!

        I, for one, would be very interested to know more about how the teams (but less so FOM/FIA!) view the concept of “engagement” w/ the sport’s fans, what potential value they assign it (if any), what initiatives might be viable to shape/change/influence behavior and raise levels of engagement and increase value therein.

        I’m certainly not suggesting an F1 team go the route of pro-cycling’s ill-fated iTeamNova project (fan-supported/funded through subscriptions…not surprisingly, didn’t work out), but surely there is a conceptual framework into which “engagement” can be levered (w/ a crowbar, if necessary lol) to satisfy the profound desires of fans so evident on these very pages for deeper connection w/ this sport, while making it worthwhile to at least one team out there??!

        Cheers, James. Please keep pushing the envelope in your coverage of F1!

        (I suspect the system is one that doesn’t contentedly tolerate aggressive critical commentary and those media professionals who want to work in the F1 mainstream need to maintain broad-appeal and avoid controversy, but with Mr. E seemingly at his weakest, better now than never to start pushing a bit against the structural inequities and poor governance that have enriched a very select, elite few – if one is so inclined…PS. “JD” is my nom de plume)

      3. Paul D says:

        “Formula 1′s real “customers”, the TV broadcasters who pay for the privilege of televising races, and the sponsors who pay to be able to deliver a marketing message”

        I would argue Formula 1′s ultimate customers are the ones who now pay for the privilege of watching the sport on their TV sets. Without which, no TV broadcaster would pay to televise races and no sponsor would pay to deliver marketing message.

        “We’re lucky if “F1 recognises” we even exist”

        If you really feel like this then I think it is a sad state of affairs. I hold myself in higher regard than that and believe that F1 is ‘lucky’ to have me as a fan.

        I am a senior manager for a FTSE 100 company and can hand on heart say we genuinely put the customer (and the customer experience) at the heart of all of our strategic decision making. This isn’t just a warm and fluffy thing, it’s because we know ultimately they are the key to our long term success. If F1 believes anything else, it will ultimately suffer.

      4. J.Danek says:

        I am a senior manager for a FTSE 100 company and can hand on heart say we genuinely put the customer…

        Excellent! Credibility established.

        I would argue Formula 1′s ultimate customers are the ones who now pay for the privilege of watching the sport on their TV sets. Without which, no TV broadcaster would pay to televise races and no sponsor would pay to deliver marketing message.

        I think your heart’s in the right place, and you’re on the right track. But we fans only have a transactional relationship w/ broadcasters and race promoters/venues who’re selling us tickets/hosting us.

        If you really feel like this then I think it is a sad state of affairs. I hold myself in higher regard than that and believe that F1 is ‘lucky’ to have me as a fan.

        That’s great that you’ve got such an exalted sense of self, but CVC/FOG still doesn’t directly care about – or depend upon – your being a “fan” to generate revenue.

        If we could glimpse some of the financial data and had clear view of the scope of business activities originating in or around “F1″, I still think that some of the relationships b/w “provider” & “customer” could probably be thought of (in simple terms):

        FOG/FOM – > TV broadcasters, series sponsors, trackside advertisers; race promoters

        Race promoters – > fans who buy tickets

        FOWT (FOG subsidiary) – > teams + other F1 personnel (travel & lodging)

        FOG/DHL – > teams (flyaway race airfreight)

        F1 Teams – > corporate (team) sponsors (who they deliver exposure to); FIA, delegated to FOM (who they perform for and create an entertainment ‘product’ that can be packaged and “sold”)

        Broadcasters / other media – > advertisers; “normal” fans (who pay to consume F1-licensed content, where it’s not free-to-air and aren’t attending GPs in-person)

        I mean, if you really think you, exalted FTSE senior manager, have so much sway over F1 as a fan/customer, why is the final race in Bahrain still going to award double points, when by every indicator even a majority of the competitors think it’s a terrible idea, never mind the fans?!?

      5. I share your view that “F1 is lucky to have me as a fan”. And whilst they may not immediately bemoan my departure when they make the sport too remote and inaccessible, the ripples will have long term effects.

        Any business that ignores the real customer is doomed to a painful death – it might be slow and laboured but it will die nonetheless. Whilst the F1 business may see the TV networks as their immediate customers (because they are the ones who part with billions to televise this spectacle) they should realise they are only intermediaries or wholesalers in the supply chain. If the customers (i.e. the paying public who ultimately determine whether it is financially viable for the likes of Sky and Fox to invest so much for the rights to televise) decide the sport is too remote and/or costly they will direct their attention and entertainment budgets elsewhere.

        If viewing numbers decline then sponsors question the value of continued investment in the sport. We have seen how hard it has been in recent times for teams to attract sponsors yet those sponsors are falling over themselves to invest in tennis and golf. Why? Because the sports are on free-to-air networks and attract massive casual viewing figures.

        F1 is on notice this year from me. I am at breaking point. It may be salvaged by it being a stellar year for on-track action. I was going to choose to only watch the V8 Supercars but this may be the last year for them too, as they have just announced a “great” deal with Fox Sports and Channel 10 which is much like the Sky Sports and BBC highlights package for F1. Simply not acceptable for the life-long fan with limited entertainment budget.

      6. J.Danek says:

        Paul, btw – here was what Dieter Rencken had to say when he reported “Winter drama changing the face of F1″ re. ‘F1′s cost-cutting meetings in Geneva’ in late-January…

        “Where fans hoped the daft decision to award double points for the season finale would be rescinded, sources advise that Ecclestone brooked no discussion, stating it would be tried this year, full stop.

        So much for paying heed to the sport’s ‘customer’ base;…” [emphasis mine]

      7. franed says:

        You are absolutely right.
        We know that Bernie has worked hard to get to the current position where the income stream does not depend upon a single person watching a single race. However of course the circuits will go bankrupt as is sadly already evident. Hosting a GP has now to be subsidised by all the events at circuit for the rest of the year, for some it is not enough. vis Germany, Silverstone in its umpteenth rescue/redevelopment Magny Cours, Spa etc all on a knife edge of survival.

        Then there is the question of how long the sponsors will keep pouring money into teams with no one watching as attendance and tv get priced out of reach of all but the very well off.
        Last year I only saw the BBC broadcast races and the highlights. This year we have lost Gary Anderson (someone at the BBC needs shooting for that) when he is needed more than ever. So I have bought a NowTV box which can give me the Sky F1 channel for £10 per day. So its race day only, I cant afford any more.

        This financial model is Bernie’s swan song, he is killing the golden goose before he goes.

      8. john cannon says:

        This is the end of f1

  2. Andy says:

    The FOTA road was a road to nowhere, too narrow and bumpy to be of any real use.

    Some could never see above their own self interest, and never would.

    1. J.Danek says:

      The FOTA road was a road to nowhere, too narrow and bumpy to be of any real use.

      Do you mean before or after RBR and Ferrari undermined FOTA from within and then quit the organization so they could eventually sign incredibly lucrative individual agreements with the Commercial Rights Holder, at the expense of the smaller and midsize teams whose interests were absolutely better served by collective bargaining in a unified front?

      Just wondering…

      1. Andy says:

        Before, they were never going to stick together in the long term, Bernie knew it and took advantage of it, as he always does.

  3. AuraF1 says:

    The teams really are getting fantastic aim for shooting themselves in the (collective) foot. Now, with Bernie at his weakest point, the whole change in media delivery for sport and the opportunity for a fresh start – the teams simply can’t agree on a simple bargaining strategy in their own interest.

    So they’ve blown it and will continue to be short term morons when it comes to business. James you sat on a recent panel about what F1 could teach business. Did anyone point out that for all their brains they are so petty they get ridden by the ringmaster every time? How can so many geniuses be so useless at working together? Even in other big sports the teams often work together to improve their financial state whilst still being competitive on the track/field…

    1. Sebee says:

      Too many self interests in the end to keep the peace.

      Truth is F1 is just a marketing vehicle. You can’t blame Red Bull really. Or Ferrari. Both understand the marketing power and felt that like any good advertiser, they should be able to spend as much as they want on their marketing programs. Truth is their spending adds to the show too. Reb Bull is the new Ferrari really if you think about it. We used to see all red and race at Imola. Today we see all purple and race at Red Bull Ring. I wonder sometimes if Dietrich will be in charge of the F1 empire in the not so distant future.

      Perhaps it is Red Bull who should commission Cosworth to build a Red Bull PU to gain even further leverage and ease the pressure that exists with engines today in F1. Soon we could have teams powered by Red Bull! Makes sense to me.

      1. J.Danek says:

        You can’t blame Red Bull really. Or Ferrari.

        What a ridiculous comment.

        Of COURSE you can – and should – blame both Red Bull Racing and Ferrari for undermining FOTA and pursuing their own individual interests at the expense of the sustainability of the sport of F1 and the collective good of all the stakeholders, and not just those who wield disproportionate power and influence.

        RBR and Ferrari have done more than any other teams to preserve the structural inequities that are ruining the viability of F1 as a sport.

      2. Ed says:

        JD, you posted some great comments, don’t stoop to calling people ridiculous though, we all have perspectives, I think the point that Sebee was making is that RBR and Ferrari have secured a high profile in their main marketing channel for the next 6 years which will sustain their businesses. Perhaps they are not concerned with a fair, level sport, perhaps Red Bull doesn’t care about the sport at all…

        It will be fascinating to see if the situation with the Renault power units results in lower viewing figures or fan disengagement because while this was accidental, presumably it’s a glimpse into the future if certain teams can drive off into the distance because of budget differences.

      3. Sebee says:

        Inequality is what F1 is all about! What racing series have you been following?

      4. Sebee says:

        But you’re right. After DRS, green PUs, double points, equality and participation medals for all is next on the correctness updates to F1.

        Bernie is resisting changes and saying “over my dead body!” to some of these suggestions. Problem is, you will soon get your politically correct spayed and neutered F1 because as bionic as Bernie is, he has no more than 40 years left in him to keep the resistance alive.

      5. J.Danek says:

        Sorry for calling your comment “ridiculous”, even though I disagreed with it.

        That was not appropriate of me to stray into what could be perceived as inappropriate criticism of the validity of one’s perspective.

      6. Darrin from Canada says:

        On another article you responded to my post (about why F1 is losing the American market) by saying:

        “F1 though is a global sport w/ European heritage – the antithesis to what’s appealing to most fat/slovenly/ignorant/xenophobic Americans.”

        The comment section of JAonF1 has always been spirited, yet respectful. Some of your comments seems to cross that line.

      7. J.Danek says:

        @Seebee – “Inequality is what F1 is all about! What racing series have you been following?”

        Inequality is exactly what’s destroying Formula One!!

        Specifically, the inequitable and immoral revenue distribution structure, providing for an almost 1000 per cent difference between the top and bottom payouts over the 11-team spread, is at the root of the abyss the majority of F1 teams are staring into.

        By way of contrast, consider that in 2012-13 Premier League, the 20th-placed team (Queens Park Rangers) earned 60 per cent of the $$ that was banked by championship-winning squad Manchester United!!

        Using the Premier League structure as a basis for F1′s revenue structure and assuming the top (WCC) team receives around £60m, the 11th-placed outfit should pocket roughly £35m.

        But oh no! Instead it receives a paltry £8m, and then only after a year-long campaign mounted by (mainly FOTA) teams…

        Willingness to accept this utterly outrageous “status quo” will directly contribute to the collapse of F1′s business model.

      8. Ed says:

        And this inequality doesn’t just stretch to the race teams, most businesses involved in the F1 circus get a pretty small slice of the action but… Is this what makes it interesting, there’s no disputing the increased profile that Bernie has engineered for F1, is this part of the formula for success? Do you need some teams having enormous budgets to really push the tech forward?

  4. Gaz Boy says:

    Unity is strength.
    Not in F1 obviously.
    And you know why? Well Mr E signed up Bull, Macca, Frank, Scuderia and Merc to an exclusive deal that irrespective of why their finish in constructors title they get a nice big juicy pay cheque at the end of the year, come what may.
    So why would these “exclusive” teams give a monkey’s toss about the non-exclusive teams? They don’t.
    I’m alright Jack (or Frank), so pull the ladder up mate and sod the rest.

  5. Spyros says:

    Funny, I thought the RRA in general and the reduction in the number of engines, in particular, were both ideas of one Mr. Mosley… and that at least to begin with FOTA was against both ideas.

  6. Ben says:

    Well Bernie has completely succeeded in his divide and conquer technique. The teams selfish, short sightedness will come back to haunt them. Their best bet is Bernies up coming court case, if he does step down hopefully his successor will have the best interest of the sport at heart and give something back to the fans and not just be driven by increasing his own profit margins.

    As much as I disagree with what Bernie is/has been doing lately, I can’t help but admire him, definitely a unique and powerful man!

  7. Richardd says:

    So what happens to FOTA fans forum now?

    1. James Allen says:

      Good question. They will have to be someone else’s fan forums!

      1. Romandy says:

        Please try to continue them! I really enjoyed the last one in London.

      2. J.Danek says:

        “F1 Strategy Group’s ‘Fan Forum(s)’”™ doesn’t have quite the same ring to it, eh?

        :(

  8. NickH says:

    Last 3 races double points idea has been binned! Waheyy!

  9. Phil says:

    Unfortunately the nature of F1 is to try and take advantage of the competition in any way possible (either on or off the track). The teams were never going to be able to put their collective interest above their desire to gain any kind of advantage over the other teams.

    It’s a shame because all the time the teams can’t collectively get their act together, F1 will always be ruled by someone like Ecclestone who can politically run rings around them.

    1. Gaz Boy says:

      Agree. The essence of competition is…………competition! You can’t go racing if you have no one to compete against!

      1. J.Danek says:

        Oh the irony…

        You can’t go racing if 1/3 of the grid disappears, either.

        (Unless you force the top-teams to run 3 cars/each, I guess…)

      2. Ed says:

        What about 1 car? What about 1/3 missing? Obviously not the ones I’m following ;-) but if I think about it, I’d say I’m not interested in half the grid, but don’t tell anyone! (6 nations rugby, only 6 teams, still pretty good viewing…)

  10. Jeff says:

    Question; does the F1 Strategy Group require consensus or majority to pass something?

    I ask because Renault just got the shaft, and there is only one Renault representative in the Group.

    I’m sorry, I can’t help but wonder if the shoe, power unit problems, was on the other foot, Ferrari, would Ferrari receive an exception to the rule? I have to believe they would being Bernie’s favored participant.

    1. James Allen says:

      Majority – 9 votes out of 12. So of Bernie and Todt want something, the teams are powerless. Ditto for any other combination of two parties.

      1. Martin says:

        So the FOTA teams dropped their pants and bent over, awaiting Mr E pleasure.
        If he doesn’t end up in German jail, you can be sure we will get 3 double point races in 2015 !
        Regards,
        Martin

    2. Optimaximal says:

      There are actually 2 Renault teams currently in the pile – Red Bull and Lotus.

  11. Just Torque says:

    FOTA Finish For First In Self Interest Stakes.

  12. DB4Tim says:

    Bernie wins…. divide and conquer

  13. j says:

    Another poster pointed out the ridiculousness of the statement that FOTA was being disbanded for reasons of insufficient finances in a multi-billion dollar sport.

    To add to this irony Dieter Rencken has made the point that the recent FOTA agreement with Perelli for sponsored tire warmers has netted the 7 FOTA teams twice the dollars this year that they would have spent in dues had any of the teams actually paid up.

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