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What happens next in F1 budget row
What happens next in F1 budget row
Posted By:   |  15 May 2009   |  5:47 pm GMT  |  41 comments

The meeting between the F1 teams and FIA president Max Mosley and commercial rights holder Bernie Ecclestone failed to reach any conclusions today, but Ferrari has followed through on the threat of mounting a legal challenge. An injuction has been filed with the courts in France, where the FIA headquarters are situated, and will be heard on Tuesday.

If it fails then the negotiations can move swiftly towards finding agreement on a £40 million budget cap and from there setting the details of what is included (engines, drivers, specific research programmes?) and the process for checking the accounts. It sounds like a way might be found for auditing to be independently handled and therefore less intrusive.

If the injunction succeeds then things will get very messy. Basically the rules will have to be unpicked and new rules drawn up.

It is understood that Ferrari’s case is based on what it perceives as the breach of an agreement Ferrari signed with the FIA in 2005 in which it was given a right of veto over rule changes in Formula . This was done at a time when the FIA and Ecclestone needed Ferrari to split with the other manufacturers who were at the time threatening to start a breakaway series.

Mosley knew he would have to tread carefully when framing the 2010 regulations because of this veto clause and that is why the second class of entrant exists; the uncapped team which is allowed to run exactly as it has this season. The FIA’s argument is that as the same class in which Ferrari has been running still exists, their rights have not been infringed.

It will be for the French courts to decide if these special rights have been breached.

As he left the meeting in Heathrow, Mosley said,

“It was a friendly meeting but the teams have gone off to see if they can come up with something better than the cost cap,” Mosley said.

The teams then went into their own meeting, summarise the situation. This lasted half an hour. There will be no formal statement.

It sounds as though Mosley was quite conciliatory towards the teams who said earlier this week that they would not put an entry in for 2010. It also sounds as though Ferrari, Toyota and Renault have taken a strong position.

Mosley said that he would like to drop the two tier system and that he will listen to the teams, if they are able to come up with something significant,

“We explained we cannot put back the entry date, as this has all been published, and we cannot disadvantage the potential new teams who will come in. But we are prepared to listen to whatever they have to say.

“In the meantime, the regulations are as published. We have explained that we want everyone to race under the same regulations. We have explained that we would like all of the teams to come in under the cost cap and that is what they have gone off to consider.

“We have said that we cannot see why anyone wouldn’t want to operate under the cost cap, and it would mean a gradual relaxation of the technical regulations – which all the engineers would want. We said in the end the choice was between intellectual freedom and financial constraint, or intellectual constraint and financial freedom – which is what they have had up until now.”

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There has been plenty of comment about Ferrari’s attempt at an injunction to enforce their veto agreed with the FIA, but little or no mention of the consequence for the other teams of this secret agreement.

Surely this agreement prejudiced the sporting and commercial interests of all the other teams and leaves the FIA open to a class action by all the other teams. Whilst it maybe legitimate to agree different commercial terms with teams, that is, how much money they are paid, this secret agrrement gives Ferrari priveliges not enjoyed by any of their competitors and enables Ferrari to dictate the rules under which all the other teams have to operate.

I suggest all the other teams sue the FIA for bad faith.


I think it’s time for Mosley to step down. He’s done more than enough now to hurt F1. More than 80 percent of the F1-Fans are on the side of the manufacturers point of view.That really says it all.If Mosley and the FIA persist , the manufacturers should start a break away series in 2010 without hesitation. It’s the FOTA that should give an ultimatum to the FIA to immediatly retract plans of a two-tier championship / 40 million budget restriction cap. If the FIA don’t respond to this , the FOTA should present the general plan for a new Championship-series named f.i. Grand Prix World Championship a.s.a.p.
Then we will see which Championship the fans will follow. An FIA version with empty grandstands or the FOTA version with all the major teams and their fans & supporters.
There may never be a better oppurtunity to exclude the FIA about decision-making on F1.


Could not agree more. The races can often be boring but F1 is never boring. It is all out war on all fronts between large egos which makes this very technical sport an interesting insight into human nature.


I have written in with quite a passionate plea for the dictatorship which the FIA seems to hold over our sport.

We all are aware that you are a very passionate FAN. I understand that a few contractual obligations may force you to remain neutral in comments. However first and foremost, you are a fan, and have been for a long time. Could you please write a post on your feelings at the current state, not as a journalist, but as a FAN?

I am so disenchanted with the current state of the affairs that I am considering revolting and doing something else next weekend over Monaco’s race weekend, and canning our fortnightly friends (fans) meet up to watch the race with a few beers and lunch, as I am begging to think our support is absolutely wasted, and I doubt I am the only one!

I even noticed my countryman the great Jody Scheckter has considered handing his title back! And we all come from a country that is quite used to political wrangling and rubbish to have to listen to and read daily… As I mentioned in a previous post, sport is a way of escaping the ‘realities’ not to get snowed under with mall bs.

I hope to hear from you James from an emotional perspective. If not, great blog, noticed that its high up on WordPress’s daily ratings! Nice one!


After following F1 for many years I am now relaxed with all the politicking AND the racing. This is all F1 as a sport.

F1 is and always has been a gladitatorial sport. The likely hood of death and injury was always there. It is now almost too safe, but the bloodletting is now on the boardroom floor, and whilst the drivers have become corporate bloodless automatons, the management have glorious larger than life egos that are allowed to blossom in full. This is feudal politics at its best. Maybe the next french GP should be renamed Agincourt, and Donnington renamed Hastings. Lay back and enjoy it all because racing is only part of FI. The managers are racing in their way and entertaining it is too. Better than any reality TV.

As an aside, if there is now only one set of regulations (as per Bernie), are the teams accepting the budget cap, and what is to happedn to the entrants coming in under the budget cap if they are not? Is the cap dead?


The FIA cannot effect the commercial dealing within Formula 1. Bernie mentioned this several times and it is not written in the regulation that allows the FIA to introduce new rules as they see fit. They can only introduce new rules in terms of safety. Stupid tyre rules were introduced for safety, same thing with crash structures etc etc. This change affects the commercial arrangement not safety. If Ferrari lose on tuesday, they will appeal and Bernie will step in and remind Max and the FIA of there position. Bernie, and the teams are the ones that should be developing the rules. The FIA are the police to enforce them only.

Max your dictatorship is about to come to an end. We need the FIA to be abolished.


I have never supported Ferrarri in anything but I do hope they win this battle.

Constructive sugestion time…. Why dont they drop the entry fee for any new team for the first 5 years. isnt that effectivly a £30m subsidy?
or is it £30m per year? £150m over 5 years?



To summarize the situation one could say as follows:

Ferrari has a contract with FIA and FOM that among other things gives them a veto on technical rule changes. The court hearing on Tuesday will be about if the 2010 regulations proposed by the FIA are in breach of this contract with Ferrari or not.

The FIA view is that since the 2010 regulations cater for both the present regulations and the new they are in compliance with their agreement with Ferrari.

If the court case goes against Ferrari they can as it seems at the moment either withdraw from F1 or sign up to the championship according to FIA s rules. If the court case goes against FIA the 2010 championship will go ahead with the present rules unless Ferrari agree to any changes.

A third possibility and especially so is if Ferrari wins the case is that there will be some kind of budget cap agreed by all parties. But, since this would be in breach with the Ferrari FIA FOM contract there would be some financial settlement between Ferrari, FIA and FOM in order for Ferrari to back down on its contractual rights.

I can’t help but having a hunch that this is what Ferrari’s actions now is all about. They probably agree with the FIA that some kind of cost cap is needed to save F1 from more teams leaving but they now have the chance to cash in on their contract from 2005 with FIA and FOM not only when they signed it but once again if they back down on it.


If Bernie says that there will NOT be a 2 tier system. Surely Ferrari can argue that this was never a serious option and therefore if they do indeed have a veto, then their position is unassailable? I know Bernie is not the FIA but either his words aren’t worth anything or the FIA’s two tier proposal is not actually a meaningful proposal. They can’t both be correct. I wonder if Bernie has said that with deliberate intent…

I am also curious as to how a governing body can directly determine the business models for the companies that build and race the cars. The FIA are effectively ending any number of F1 careers in the worst possible way. I’d be very surprised if the incoming teams (which do not have an entry yet into next years competition) can take up the inevitable redundancies. Whilst a bunch of cost does need to come out of F1, the FIA route strikes me as utterly illogical. A ramp down over a couple of seasons is clearly the most sustainable option. And I’m sure there are ways of enabling new teams to enter in exchange for such a ramp-down – perhaps the entry bond could be waived or ramped up over the time period… (they still have that right? It’s still $48 million right?)

Why is this not done over the off season? I don’t understand this – how does this shambolic approach to the development of the sport serve its interests? It’s very hard not to come to the conclusion that this aspect of the sport is what gives the greatest enjoyment to certain people. The fact that it doesn’t do a whit for the positive profile of the sport seems to not matter to them.

Finally – James, GREAT blog. This for me is the best place for insight into the sport I love. Fellow commenters – you are also the best – really great comments and points of view. It’s a rare pleasure to find such great debate going on.


Generally in life, things are not what they seem to be on the surface. So, what has get lost in this whole hooha is the reality that, far from being an intransigent dictator, Max has done just about everything possible, and more, to accommodate the desire of the noisiest of the teams to continue on their current path, until they bankrupt themselves or their competitors in the process.

The budget cap started at £30 million all in, if memory serves me right, now it’s already £40 million and excludes drivers and engines etc., so the end result could easily be a doubling and more of the spend originally envisaged. If that isn’t flexibility, I’ll eat my Ferrari branded cap (not really).

Ferrari have embarked on a course, which just possibly, could end up trashing F1, and thousands of jobs with it, in the unlikely event of the French court coming to some kind of truly idiotic, perverse, decision in their favour. This typically selfish behaviour from F1’s spoilt brat goes way back to the days of Enzo Ferrari, and so is completely in character for them.

As I have pointed out already, it cannot be justified in any way by the behaviour of the regulator. It is the latest, nastiest and most irresponsible manifestation of Ferrari’s view that they are more important than the sport, and can use it for their own ends whenever they like, regardless of whom they may hurt in the process.

Don’t worry, Ferrari, the powers that be will respond to your pathetic grandstanding antics as they have always done, and come up with the usual fudge to keep you on your pedestal and ensure that F1 will never start from a level playing field. That’s why you keep on doing it, year in, year out. Pity.


This is a very helpful summing up of the issues. Thanks. I can’t understand why on earth anyone thought it would ever be a good idea to have cars starting the same race under different rules. To me, the best thing from yesterday’s meeting was a seeming assurance that that wouldn’t happen. However, that would seem from what you are saying to strengthen Ferrari’s position in the courts if they don’t have their opt out.

If Ferrari did walk away, and I think we’re still a long way from that, then I as a Ferrari fan would blame Messrs Mosley and Ecclestone. We’re talking now about at least 30%, possibly more, boycotting the next season. Idon’t think that’s a tenable position for the FIA. It seems like we’d end up with turning F1 into a slightly souped up G2 series.

I think Max Mosley needs to acknowledge that the FIA have not been best at managing change. If the teams accept the imposition of a budget cap is it feasible that this could be set higher and reduce over, say, a 5 year period.

As for the independent audits of account, I wonder if there could be lessons learnt from the way we fight elections in this country. Every campaign, whether at local, regional or individual Westminster seat has an expenses limit. Each candidate has to file a comprehensive expenses return backed up by documentary evidence and it’s up to the other campaigns/journalists/public to challenge them. That would save the need for the teams’ accounts being scrutinised as a matter of course from outside, but there would have to be some sort of powers to do so if there was thought to be anything wrong and dire consequences for any contravention to make it credible.


2 tier or not to 2 tier, that is the question.

Funny thing is, if you look back with the passage of time, does anyone thing of the Turbo vs N/A Era as a dark day in F1? Or “glory days of madness with the yellow kettle Renaults…”

It’s not 100% comparable, but there were 2 different classes of car.

Personally I don’t want to lose any of the teams. Max’s interview was good last night – sad to say he is right. It isn’t £40m, it’s closer to £100m, which is enough to go racing and run a big marketing operation.

And if Fezza are so upset about that as a constraint, they can always run a Maserati team as well!


Well FIA already pretty much destroyed WRC, I wouldn’t be too surprised if they mess this up as well.

However, as things stand, it is the FIA that is the governing body for most things motor racing, just like FIFA is for F1.

And in recent years, they have shown a willingness to move to level playing fields (as with GT racing). In order to attract and keep new teams, this is a necessity. Some teams will always disappear (like Honda did recently enough) and there should always be an incentive for new teams to enter.

How else would a new team ever justify the costs for F1 if they know beforehand they’ll just be gridfillers for years at least? The days of plenty of marketing budget are drying up, with major car manufacturers all over the world in dire straits, the banks which are major sponsors now doing even worse and telecom not being the goldmine it used to be.

I think that in the long run, the only thing that can keep F1 going is major costcutting and it’s up to FIA to make sure the series survives, not individual manufacturer’s.

Whether or not a breakaway series would work is a whole other question… It can happen, IRC is doing better than WRC is even. WRC still has Citroen and Ford, but in the IRC we see a lot more manufacturers, with cheaper cars under tighter and cheaper regulations…

The budget cap enforcement is harsh, but for the long term survivability of the sports, costcutting is a necessity.


Hopefully Ferrari win in the courts and we see Mosley resign [mod] No F1 in 2010. Ecclestone and CVC left hanging and bankrupt and the breakaway established in 2011/2012 with the F1 name repurchased on the cheap with a new FIA president who will only act as referee and not dictator. [mod]

Come on Luca eviscerate Mosley. Finish him.


Northern Munkee

If its left as is, you will not see any innovation as the FIA (so long as it isn’t veto’d by Ferrari) reduce the room for innovation in the name of safety and a grid of 12 cars, when the manufacturers realise they can’t take justify to their boards and their subsidising national governments, the huge budgets.


@Lee Grant – Though not directly related to this blog topic, your post sums F1 up well.

Try explaining the in’s and out’s to Joe Bloggs and they get bored. There is no simple way of explaining what is going on because it isnt simple. And that is the problem, it should be.

Would not uping the cap to £80mil sort everything out? For a first year of budget caps £40mil is far too low! The teams have a limited time to get down to the cap from they are running, it will be a logistical mess!

I know everyone says it but now more than ever it is it clear… Bernie and Max need to go. The FIA need to go. We need new blood running the sport. We need to start afresh.

New teams showing interesting is amazing, however one thing is certain. We NEED Ferrari. No matter what. I am not even a Ferrari, but recognize F1 without Ferrari is not F1. Watching that Brundle grid walk, there is one thing that stands out. He suggests a 3day meeting. Why is that not done. Why not make all teams attend to pencil out the regulations and make sure all agree.


Why not make F1 to be 2 series? One with 50 million budget and another one “spend all you want”.

We would get more teams, more drivers and still keep every1 quite happy? All teams can join to both series but no need if they don’t want to.

If both series would driver GP together we would see more overtaking (mostly because of performance advantage on other series). There are some risks in this but still would be a lot better than just one series if all the big teams leave F1..


I think the FIA should just stick to looking after the safety side of F1. What teams spend each year is their business and no one elses. If something is deemed unsafe then the FIA should get involved. Otherwise they should butt out.
I also agree 100% with Geoff’s comments.


A friend of mine, who is not a F1 ‘fan’ but will watch a few laps on TV, asked me today ‘what is going on?’

I took a breath, waited, tried to find a way to put my answer into a nice simple soundbite!

I failed…

When he asked me why Lewis Hamilton wanted to go to jail I realised that it doesn’t matter how polite the drivers are in interviews to impress their sponsors – F1 is in a real PR mess all of its own making!

I’ve been comparing F1 for some time to a soap opera – just one with a bigger budget and more environmental impact (actually I don’t know if that includes Eastenders!).

Finally I did the only decent thing – I emailed him the link to this blog!

Mahendar Jain


I have been a regular follower of your articles in itv and I find your articles unbiased. Seriously, where will f1 go from here? How can Max dictate what teams have to do? Its the board of the team who has to decide how much they want to spend…. Its high time teams stand together and do some restructuring of FIA….. New teams are welcome but not at the cost of losing teams like Ferrari, Renault, BMW and Toyota. F1 is no more a sport that is just followed in UK and Europe. It is global and people love because of its innovation.

Is there anything we as fans can do to support the teams and to show our support to the teams so that the FIA can realize that its not their game anymore.. I am convinced that lot of fans are just waiting to raise their voice against FIA and Max. We hope you can come up with clever ideas to gather fan support all over the world to open the eyes of FIA who are just playing dirty politics..

If the manufacturing teams leave then very soon Max will be called ‘the man who killed f1’.



Take a look at this interview between Max, Bernie, and Martin Brundel at the 2004 Brazilian Grand Prix on YouTube.

Is this deja vu?




I totally agree with geoff,have just seen the LOLA announcement got the impression they are sure there going to win races under these new regulations.Teams that have spent 10 times as much are struggling yet they are running off at the mouth about how the new regs will put them on a even footing with the existing teams.Come on what ever happened to doing the hard yards.why cant they compete under the current format,Force India turn up every week.

lower-case david

bit of light relief, a link to a joe saward interview with an electioneering mosley from 1991 …


some of the lines that the younger max comes away with, given all that we have had to endure, are absolutely delicious.


Now things are getting very interesting!

James, i will explain some legal stuff for readers who do not have any legal background.

Disclaimer: This is how it is in the jurisdiction where i come from, it may not be the same in france but the odds are it is the same as these are universal legal principles.

An injunction is an application by an aggrieved party for temporary and immediate relief before the courts while a main case is pending.

The plaintiff in an injunction case must prove before the courts that if the respondents are not enjoined from what they are doing or what they are about to do the plaintiffs will suffer grave and irreparable injury or they will be denied a substantial right.

Hence, I am almost certain that together with the application for injunction Ferrari is also filing an action for enforcement of their contract with the FIA contending that by giving force and effect to the new regulations the FIA is in breach of their contract with Ferrari as it deprives them of their substantial right to veto the new regulations.

Thus, the main issue in the main case will be whether or not the contract between the FIA and ferrari grants ferrari the right to veto the 2010 regulations?

On the other hand, the issue of the injunction case will be whether or not by accepting applications and sticking with their application deadline before the resolution of the main case, Ferrari will suffer grave and irreparable injury or they will be denied a substantial right?

The courts will first determine just from reading the contract whether or not ferrari has a case against the FIA.

If from the contract itself, the court finds that ferrari have no case against the FIA the both the injunction case and the breach of contract case will be thrown out and that will be the end of story.

But if the court finds that there is a justiciable controversy, The court will then ask the parties to show why or why not an injunction should be issued.

The nightmare scenario here would be if an injunction is granted but then the FIA wins the main case.

The consequence will be that the FIA will be enjoined from proclaiming the 2010 regulations, accepting entrants based on the 2010 regulations and setting the deadline for applicants on the end of may. And by the time the main case is decided in favor of the FIA it will be too late for the new teams to join and there will be an exodus of the manufacturers. It will mark the death of F1.

I just hope that the court will not find any justiciable controversy within the four corners of the contract and dismiss the injunction case and main case all at once, or grant the injunction and eventually rule in favor of Ferrari or deny the injuction and rule in favor of whoever.

Otherwise we’ll all be watching gp2.


Perhaps someone from FOTA could give an estimate of the number of redundancies, the cost of those redundancies and the employment costs of dropping cap on all the teams. Clearly three mini-teams will not take up the slack.

I am also amused at the suggestion that the entry date is immutable when the FIA have an obligation to consult teams – and other rules (like the medals system) were casually withdrawn by the republication of the rules. If this was the EU, the solution would simply be to stop the clock. It can always be sorted. Max always sounds reasonable, but you do wander away counting your fingers.

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