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F1 budget talks hit dead end
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F1 budget talks hit dead end
Posted By:   |  16 Jun 2009   |  9:51 am GMT  |  89 comments

Another day, another statement. This one, from the FIA, again suggesting that the wheels are coming off the negotiating process between the FIA and the team’s body (FOTA) and that it is FOTA’s fault.

As I posted yesterday in the Ross Brawn story, the teams want to talk about ‘resource restriction’ which they control, rather than ‘budget caps’, which an outside agency controls on behalf of the FIA.

The teams feel that it is a fundamental right of a competitor to manage its own business autonomously. They are also concerned about how it would work if there was a disciplinary hearing, of the kind we have seen in recent years involving racing incidents, where a team was investigated for ‘financial irregularities’. A manufacturer could not afford the damage to its image that this might entail.

So FOTA put a plan to the FIA for a system of financial self-regulation, which it believes would achieve the same ends as a budget cap, but without the intrusion. That is what the two sides met yesterday to discuss and this is what the FIA has to say about it today,

“As agreed at the meeting of 11 June, FIA financial experts met yesterday with financial experts from FOTA.

“Unfortunately, the FOTA representatives announced that they had no mandate to discuss the FIA’s 2010 financial regulations. Indeed, they were not prepared to discuss regulation at all.

“As a result, the meeting could not achieve its purpose of comparing the FIA’s rules with the FOTA proposals with a view to finding a common position.

“In default of a proper dialogue, the FOTA financial proposals were discussed but it became clear that these would not be capable of limiting the expenditure of a team which had the resources to outspend its competitors. Another financial arms race would then be inevitable.

The FIA Financial Regulations therefore remain as published.”

In other words, the budget cap stays, take it or leave it.

The FOTA teams last week went over the head of the FIA president Max Mosley, questioning his style of governance and appealed to the FIA senate and FIA World Council to ‘facilitate solutions’ in this week’s meetings, which they described as a final opportunity to find a solution.

So far it doesn’t look like the appeal has had much of an effect.

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1

If there is a breakaway, how will this affect engine supplies.

I remember that Williams had some (may still have) anxious moments over Toyota. There may be a contract, but a law suit wont power a racing car.

At the moment Brawn is dependent on Maclaren, Red Bull on Renault, and Torro Rosso on Ferrari.

It may not be possible for them to be independant in any meaningful way.

Is there any firm opinions on tha matter of the things that make other things go fast

2

FOTA has gradually morphed into a trade union, albeit a trade union for top people (who should know better). As is frequently the way with unions, it is now dominated by a vociferous and militant minority, whose aims are primarily political. In this case those aims are quite openly to overthrow the regime (the FIA), regardless of the damage that they know will be caused in the process, i.e. by a breakaway series and a split with the FIA.

Again, just as with trade unions, the rest follow, in the interests of solidarity, in spite of the fact that their needs clearly conflict sharply with the aims of their leaders. In this case, Ferrari are determined to continue spending at a level which many are beginning to think is quite unjustifiable, and also, frankly unnecessary. They know of course they would be uncompetitive if they didn’t. As for their acolytes, the family car manufacturers are closing factories and laying off workers, but simply can’t admit now they are desperate to make economies. The actual FOTA core business racing teams are tagging along in the rear. They have no hope of ever matching the big spenders anyway, and hence are at best consigned to the role of perennial also-rans, making up the numbers. The only thing that unites this rag-tag bunch is that trade union thing, solidarity.

You have to ask how for example it can possibly be in Brawn’s interests to end up in a breakaway series dominated by one or two teams that continue spending up to £400 million a year each? That is what Ferrari will continue spending unless they are reined in by the FIA. And despite their transparently false protestations to the contrary, what they are hell-bent on making happen is a breakaway series they can dominate with big money.

So car manufacturers are indignant at the idea that the FIA might seek to control their spending? Well maybe then, if that doesn’t suit them, they should leave motor racing to motor racing teams, and find other ways of marketing family cars.

To think, all this came about because Ferrari didn’t read the 2009 rules, got left behind, and couldn’t get their own way by causing a rumpus (as they always did in the past). Funny thing is, the double diffuser was probably worth no more than a couple of tenths a lap anyway.

If these shenanigans don’t demonstrate conclusively just why an exceptionally strong hand is needed to control the monster egos that inhabit Formula One, whether they like it or not, I think nothing ever will.

3

I love this blog, James – it has become my first stop for F1 news but I don’t really read half the stuff on here anymore (or anything anywhere else) as I’m so sick of the same old row! Roll on Friday, hope something happens to end this and then let’s have a great send-off for Silverstone.

4

This whole ordeal is getting really tiresome. There’s so many issues with Formula 1 at the moment that it’s all become a bit of a farce.

I actually liked the way FOTA were going about things earlier this year. They were finally united as teams and had banded together to save Honda F1.

Something changed for me though. FOTAs mantra is largely based on ‘being reasonable’ about the situation. They talk a lot about that. So it’s easy, as a fan of F1, to side with the teams who we support. There’s also a lot of talk from FOTA about the issues in F1, but I feel they are keener to promote the fact there are problems rather than offering concrete solutions.

The question of governance does have some merit. The FIA have allegedly rushed through rules without consulting the teams. The difference between the FIA and FOTA is that the FIA are willing to take action. They’ve made amends to rules to make teams more profitable.

With the numbers of cars on the grid dwindling, new teams are necessary. A budget cap is essential to getting these new teams on board. It seems like the manufacturers are afraid they may well get beaten by a ‘Formula 3’ team. I would love to know why the racing pedigree of Force India or Toro Rosso is so much stronger than Campos or Litespeed. The manufacturers throw their financial muscle at issues with their cars, which is why they remain at the top.

There’s so much ranting about the core values of F1 but what are these values? For me it’s simple: I want to see the best drivers driving the fastest cars and jostling for position. There’s just no passing anymore. Watching a race really isn’t that exciting now. The sad thing is that I don’t expect this to be fixed in any way because at the moment the ‘key issues’ involve politics and not motor racing.

5

The FIA seem to be gambling that if there is a split they can force Ferrari to side with them, as a result of Ferrari (presumably) signing a contract which ensures they compete in something called F1.

Do you think its likely such a contract would forbid them competing in another series? Say….a manufacturer lead series (presumably organised by them)

In other words, surely they could wriggle out of it by doing the equivalent of running a poor and under supported car in the FIAs series (the Maranello equivalent of a Ford Escort painted red perhaps)…and investing their efforts in their own series at the same time.

6

A breakaway series is just unthinkable. This would be the worst possible scenario for everybody. There would be no winners in this situation, both championships would be devalued. Who would have the TV rights to a breakaway championship? BBC are contracted to show F1, I’m not sure ITV would be interested in showing it now that they have switched their focus back to football, so it could end up on Sky, and consequently wouldn’t generate the mass viewing figures the manufactures would want to showcase their brand.

And F1 without the benchmarks of McLaren, Ferrari and co. would just lose all creditability as well.

Let’s just hope common sense will eventually prevail, it’s something that has been missing in F1 for a long time.

7

What the FIA is effectively doing is the equivalent of the FA getting rid of 80% of the teams in the Premiership (is that what it’s still called?) and bringing in the likes of Inverness Caley Thistle to make up the numbers. Now, much as I love Inverness Caley Thistle – it is the only football team I care about really – most people don’t have the first clue who they are and would have no great affection for them. I can’t see a match between Caley Thistle and Ross County, however much it would arouse passions in the highlands, filling stadia and attracting large tv audiences.

Taking away Ferrari and McLaren is like taking away Man U and Arsenal – F1 would be pretty much dead in the water without them and there just wouldn’t be the fan base.

The thing is it’s all so completely pointless – like you say, the FIA and FOTA are not a million miles apart, but the bitter tone of the FIA’s statements both today and yesterday make it look like it’s the dramatic end of a long love affair between Ferrari and the FIA.

The FIA dossier just looks so much like a hatchet job on Ferrari more than anyone else, although John Howett gets a bit of a slagging, too that I wonder if this is another machiavellian Mosley plan to split Ferrari from the rest of FOTA.

The whole thing is completely ridiculous, and while FOTA are not blameless, they have been more constructive all along and the FIA are increasingly looking like they don’t want a resolution.

What I don’t get is why? Why would they want to kill the sport and significantly reduce the revenue it’s capable producing?

8

Random question.

McLaren were fined £50million (or something around there) for the spy scandal.

What would happen if something like that was to happen again, considering they will only be on a £40million budget?

9

More than 50% of existing F1 fans will leave. And if the 2010 new teams don’t perform up to par another 50% of the balanced 50% will follow suit. The dropping %tages could be far worse. The mood of F1 is disappearing rapidly. SIGH.

10

surely CVC are going to fight tooth and nail to ensure that the likes of ferrari/bmw etc are in f1 next year – dont they still have a massive loan to pay for the f1 rights purchase – if so then an f1 with lola, superfund and prodrive instead of ferrari, renault and bmw will have far less commercial appeal, ticket/merchandise sales will fall and they’d have a lot of broadcasters trying to get out of their tv deals (or at the very least renegotiate their deals) which would massively affect their ability to repay their debt, so surely its in CVC’s best interests to play ball with FOTA on this issue?

11

I think almost 10 years ago I was so excited to hear that Toyota, Renault, BMW and Honda will join F1 as factory teams and compete with Ferrari and Mercedes. And I think FIA was thinking the same. So I wonder what the fuss is about now? Is it because FIA soon realise the manufacturers as a group are too hard to ‘manage’?

James, if there really is going to be a breakaway series, I hope to hear you as commentator again. I think the new series should be called “Formula Won”.

12

Let me assume the worst and the 8 FOTA teams do not compete in F1 from next year, to be replaced with 11 new teams. I would probably stop following F1 for a while, maybe a few years, maybe for good.

I have been following, watching and supporting F1 for over 30 years, missed only a few races over that time. Yes, teams have come and gone, including many very well respected teams. But never has the entire field been decimated. As teams go, others have replaced them and either succeeded or fallen by the wayside.

Williams have a proven history, Force India are building one and the 11 news teams will take a many years before they earn my support.

Max, you have done a lot of good in the past, with some regulations, especially related to safety, but the last few years of constant changes (forcing huge costs on the teams) has got to stop. Together with Bernie you have helped to create F1 to be what it is today (ignoring the politics). Please see reason and take on board what FOTA are proposing.

11 new teams, Force India and Williams will not be enough for me to ensure that I watch all races, qualifying and practice sessions from next year. Also, other businesses that rely on F1, including media, magazines etc, will not be getting my business.

13

Well, on the plus side, it is looking increasingly likely that I will either be watching an entirely new manufacturer-run series with no Mosley or Ecclestone stirring the pot next year, or I’m going to be able to reclaim every other weekend to get out and do something constructive with my time.

Either way, I won’t be watching a budget-capped F1. There are lots of other motorsport categories I’d find vastly more interesting.

Max Mosley will go down in history as the man who killed F1 almost single-handed on an ego trip.

14

Thanks to Max’s increasingly dictatorial behaviour over the last two years and more we seem to be edging ever nearer to a breakaway series.

If this releases millions of $ currently taken out of the sport by CVC for the benefit of the teams and the circuits, ticket prices can be reduced for the paying spectators and at the same time more money will be available to upgrade the traditional circuits like Silverstone, Spa and Monza which we all want to see retained.

For example, I calculated that at the British GP last year, FOM / CVC took about £85 from every ticket sold and this money went straight out of the sport.

In the long run a new series free of CVC and the FIA must surely be in the best interest of our sport ?

15

It’s clear that it’s going to be a sad ending for all
a breakaway series wouldn’t be as attracting as F1, and F1 will lose it’s “charisma” or whatever it is without Ferrari, Mclaren … , and wouldn’t be the F1 we know, it’s a lose-lose situation.

I’ve been a fan for many years, but here in the middle-east F1 is just starting to get attention from the youth, especially after Bahrain and the new AbuDhabi circuit, it’s important to keep F1 in it’s best shape or the sport will probably lose the oppurtunity to increase the number of fans out there, and certainly manufacturers breaking away isn’t going to help at all.

16

If the FIA (ie Max) really want to find a soloution, why do they keep on releasing these inflammatory press releases? Nothing is coming from the FOTA side.

It really does look as if Max has lost the plot, and that the FIA has lost all perspective.

17

when you look at todays F1 cars, they look ugly.. last year cars were looking beatiful… on board cameras, when you see the car on the track, it was all fine… but when i look at this years cars, i even dont want to see them… last 2 years, it was mclaren vs ferrari and it was also fine… lots of people really enjoed F1.. and this year, button winning everything, and like me, people believe he is not a top class driver… as james said some time ago, there is a fine line between a good driver and best driver… and he said button was a good driver but not one of the best… so people dont like to see a good driver winning everything just because his car is almost 1 sec faster than the field..thus people do not want to watch races… it will soon get more boring as button continue to win… the fact is i dont believe button deserve this success and some more people may feel the same… the point i want to make is it is all about rules getting changed every year… what was the point to introduce KERS last year ? when i see the cars on track, they look slow… even i feel i can drive them… and probably it became quite easy to drive F1 cars now… even nakajima can handle it… so how we can see the real difference… i mean if there was V10 or V12 engines, then we could see what raikkonen is capable of and what nakajima is capable of… but unforutnately FIA have been too much careful about cars speeds and they introduced some silly rules just to make them slow.. but now cars are too slow… to cap, FIA needs change and FOTA is right…in premieur league, it is always arsenal, manunited, liverpool or chelsea who gets the trophy…and i did not hear people were unhappy about it.. i did not read any comment that suggest “reading” should be the champ… so it was also fine mclaren, ferrari, reanult were top teams and there was no need to change it…

18

I am totally sick of hearing about this – can’t a happy medium be found for just one year, and then within that year (or years) a gradual change be made? From what I have gleaned over various news sources, the FOTA understand that costs have to come down, and are willing to conform to some sort of cap in the direct future. Doesn’t this show the FIA thieves that some progress is at least being attempted to be made? If each team got its own percentage of return in deserved revenue from TV rights, race/ticket attendence etc, there would be no need for any ‘team expenditure’ as the rule could be that everybody (Teams) decide on a budget and rules, and then FIA enforce and police it. Is it that flipping difficult honestly? Polls that i’ve seen indicate that a landslide majority feel that the FIA are the villains, and are making a mockery of the sport. Never before have I seen a governing body so detrimentally involved with a sport – I love love love formula one, but i’ve had enough of this. James what do you think?

19

This is a great game of poker. Who is bluffing? Who holds the cards?

The problem the manufacturers have about setting up their own championship is the lack of cars. Even if Ferrari, Red Bull 1 and Red Bull 2 are not contracted to the FIA series, this only means eight teams of two cars = 16. That’s not really a full grid. If that had happened in F1 my understanding is the eight teams would have had to run three cars each. Now if that is what FOTA is proposing for its own series it just proves they are not serious about cutting costs.

On the otherhand, F1, (with or without the conditionally unconditional three teams) has Williams, Force India, Campos, Manor, USF1 plus a queue as long as their arm. I don’t see anyone else lining up to support the FOTA series.

I think the FIA should call FOTA’s bluff.

20
Julian Smallwood

So, are we in the death throes of F1? It must be sorted soon to allow either (or both, more probably) new teams to prepare for Formula 1 2010 and existing teams to prepare for Formula One/GP Racing 2010.

I now hope the split happens, and as posted previously we see the “good guys” who wanted to join (Prodrive, Aston, and others) electing to follow FOTA.

It is clear already that ITV and RAI would be there to broadcast in two key markets and that a few vaguely reasonable circuits would be available: Silverstone, Indianapolis, Imola (Monza?), Fuji/Suzuka, Zandvoort, Kyalami, Montreal, Monaco (?). Clearly this could snowball rapidly to ensure a well-covered series in core markets. It would be a bit rough around the edges in certain media senses but that may be no bad thing after the circus.

Less money overall but more equitably shared and supporting the true values of the business.

Time to say goodbye to Max, Bernie and CVC.

21

James, what I want to know is if the FIA and FOTA can not agree a deal, how will FOTA arrange a championship in time for next year, or do you think they will miss a year.

22

‘So FOTA put a plan to the FIA for a system of financial self-regulation’…
Lol – I think we all know how effective that would be!

23

See ya later manufacturers! Good luck building your own series. It’s so easy to do, and so cheap! You’ll love it. 5-6 years and it should be running smoothly. Then in 15 years or so you might break even. Excellent. A wise choice.

PS. I’m taking the p**s. They do not have stomach nor the wallets for it. It will NEVER happen.

24

And so, we say farewell to F1. It will be fun to watch LeMans next year, I wonder if the F1 teams will just make a full body kit for their current F1 chassis – and all would be out of the race in 5 hours LOL.

James, what are the chances that A1GP becomes the new FOTA F1?

25

“the FOTA financial proposals were discussed but it became clear that these would not be capable of limiting the expenditure of a team which had the resources to outspend its competitors. Another financial arms race would then be inevitable.”

So what? Why should everyone have to spend the same amount?

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