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More details of the deal which saved F1
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More details of the deal which saved F1
Posted By:   |  24 Jun 2009   |  3:53 pm GMT  |  60 comments

The FIA has issued the entry list for next season’s F1 world championship and it features all of the existing teams and the three new ones who entered last week.

Montezemolo: Played a strong hand

Montezemolo: Played a strong hand

Meanwhile more details of the deal which saved F1, brokered by Luca di Montezemolo, Max Mosley and Bernie Ecclestone, are staring to emerge. The crucial points are that the rules for next year will be the same as 2009, costs will be brought right down, but there will be no budget cap and the teams and manufacturers have committed to the sport until at least 2012.

The FIA emerges from the episode with its authority intact and a more sensible attitude from the teams to spending, FOTA emerges as a strong body which achieved a lot through staying united and Bernie Ecclestone and his partners, CVC, know that the cashflows will continue for at least another three years.

The rules may be as in 2009, but this is really only a starting point. The devil will be in the detail; will they go ahead with the ban on refuelling, for example? Will there be KERS? There is still more work to be done on this and FOTA meets tomorrow at noon, to move forward on finalising things in conjunction with the FIA.

There will be no budget cap, instead teams will act together to drastically reduce costs, down to a level of around £40m million in two years time. They will provide some ‘technical assistance’ to the new teams, although as all three of them are signed up to Cosworth, cut price engines will not be part of that. It will be interesting to see whether all three of the new teams are still using Cosworths when next season starts. Asking the teams what this ‘technical assistance’ consists of, the answer is rather vague at the moment.

The teams and manufacturers have agreed to commit to 2012, but the deals with the FIA and FOM are different. This is a key point for FOTA. The FIA deal is open ended, recognising the FIA’s right to be the regulator of the sport, but now with the F1 commission in place to decide on future rules, which was not the case recently. With regard to FOM, the teams are signed up until 2012, presumably on the same commercial terms, but they have separated their dealings with FOM from their dealings with the FIA. There is no detail about whether Brawn will get the money it feels it is owed by FOM for Honda’s past prize fund.

Max Mosley will not seek re-election in October when his current term expires. In the meantime he has relinquished his position as the main contact man at the FIA for F1. Instead the FIA Senate will deal with any issues in F1. Mosley is a member of the Senate and, under FIA rules, he will remain a member in future as an ex president. There is a sense here that if this deal were to fall through then Mosley would be on hand to take up the FIA’s side again. Meanwhile there will be an election for a new FIA president in due course.

The deal was hammered out in a two hour meeting between Luca di Montezemolo of FOTA/Ferrari, Bernie Ecclestone and Max Mosley. The meeting took place in the FIA building and the three then went across to the world council meeting room to get everything ratified. The three men broke out of the WMSC meeting part way through to finalise a few details and then returned to report their agreement.

Both sides have achieved much of what he wanted, by pushing the teams over the brink, Mosley has got new teams into the sport, forced the manufacturers to commit and got them and the teams to wake up and smell the coffee when it comes to budgets.

So what provided the breakthrough? Well on the FIA’s side it was FOTA’s acknowledgement of the FIA’s authority, their right to govern and regulate F1. On FOTA’s side it was Mosley’s agreement not to stand again and the return of the F1 commission for setting new rules.

FOTA has achieved a lot and will no doubt continue as the body which represents the teams and manufacturers in dealings with the FIA and FOM in future. I imagine that Williams and Force India will be readmitted to FOTA, having sat on the sidelines throughout this most recent process.

Leaving their respective methods to one side, to me this episode shows that Mosley has always been a long term thinker, whereas the teams are more short term. It has been painful and it’s not completely over yet, but F1 should emerge stronger.

2010 F1 ENTRY LIST
SCUDERIA FERRARI MARLBORO FERRARI
VODAFONE McLAREN MERCEDES McLAREN MERCEDES
BMW SAUBER F1 TEAM BMW SAUBER
RENAULT F1 TEAM RENAULT
PANASONIC TOYOTA RACING TOYOTA
SCUDERIA TORO ROSSO STR TBA
RED BULL RACING RBR TBA
AT&T WILLIAMS WILLIAMS TOYOTA
FORCE INDIA F1 TEAM FORCE INDIA MERCEDES
BRAWN GP FORMULA ONE TEAM BRAWN TBA
CAMPOS META TEAM CAMPOS COSWORTH
MANOR GRAND PRIX MANOR COSWORTH
TEAM US F1 TEAM US F1 COSWORTH

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1

The next season of F1 certainly holds lots of surprises and disappointments… to say the truth i am happy that all the teams are returning for the next season and yes the cut in the budget is inevitable… hope we have a great season ahead in 2010.

2
Markle SchuMarker

It’s ok, just the gas man. This time…
The other thing which occurs to me is that there appears to be no information on just how the budgets will be controlled. If it’s by general agreement and the teams have promised to spend less then surely at least one of then will have their fingers crossed. It doesn’t seen to me like a satisfactory agreement for anyone.

3
Markle SchuMarker

Maybe it was all just to fill the websites and blogs? Lets face it, the secrecy surrounding F1 doesn’t feed the hunger of the internet for news and I for one dislike sites which re-cycle news and spin driver quotes into stories which the patently aren’t. A bit of controversy fills space and this has been nothing if not controversial! You may call me paranoid but…
Wait, who’s that at the door… If I don’t post back here in 2 days call my family on…

4

Has anyone considered the fact that Max Mosley may have create this “storm” deliberately?

The known – knowns are:

1) Max has always been (in tandem with Bernie) an arch negotiator and a strong force
2) The budget capping in theory was utopian – in practice it would have been impossible
3) Max was always stepping down

Maybe this was his way of getting what he wants: cost reduction, more teams into the sport, media spotlight on F1 (no such thing as bad PR!)

A little high risk I know; a little dramatic I know – but after all, that’s Max all over…

His last great negotiation ploy

5

My personal take on this is that CVC were the ones who forced a solution/compromise because they had the FOTA teams and FIA over a barrel.

I have read in other reports that CVC lawyers were at Silverstone over the weekend. If this is indeed true, it would not surprise me if they threatened FOTA & the FIA jointly with legal action for breach of contract and possibly an interim injunction to prevent FOTA from starting up a breakaway series. Legally I believe their position would have been much stronger than the FIA’s in this case because they weren’t part of the squabbling. Aside from which they could afford to stay the distance because their interest is purely financial. Regarding an injunction, they would have been in a strong position to argue imminent harm and likelihood of winning the final case. Although it may eventually have been found that one of FOTA or the FIA were at fault in such a matter, I don’t think either could take the risk and chances are they would have ended up sharing any (huge) damages payout.

That, to me, explains why the teams have been unable to get any financial concessions and why we are reverting back to the 1998 Concorde Agreement for a couple of years – keeping everything under one umbrella is always simpler (indeed, not doing that would seem to have been part of the problem here). It would not shock me if Ecclestone turned up at that meeting with the requisite agreement already constructed based on what CVC see as fair in each circumstance and just a few minor details were ironed out.

I would also like to commend you, James, on being one of the few F1 journalists who is pursuing this story and who has consistently reported on it and offered insight. If not for your efforts, we would be significantly further in the dark.

6

Reading this great news has actually brought tears to my eyes..thank god for everybody involved in brokering this deal. They have secured the future of our beloved sport and we can all now realistically look forward to a new golden era in our sport. Amen!!

7

Max Mosely never listens to the fans. In the past he never gave the fans what they want. Max had the chance to please the fans by giving them the breakaway series they were clamoring for. And what does he do? He gave in to FOTA’s demands and scuppered the breakaway series. What a waste.

Ok. Just kidding. I’m sure Max made a lot of fans happy by stepping down. Now if only he took Bernie with him.

8
Craig from Canada

Words cannot adequately describe what I’m feeling… I thought that the 2 problems that FOTA had were with the arbitrary rule changes and with the FOM/BE 50% cut of the profits from venues.

The arbitrary rule changes (hopefully) are gone, but what did FOTA get from FOM?

If Bernie still gets half of the money for doing very little while still being able to [mod] circuits for money, start times he likes, and supposedly better facilities, I may try to give up on F1. Not sure if I’ll be able to do it, but I’ll give it a shot.

9

This is just same old same old. We are double crossed.

Max goes to the senate. The senate (read Max) decides the rules, and the F1 commission gets told what to think.

Bernie runs off to find governments (dictatorships) with more money than sense, until the whole thing collapses and the results will be spectacular and as disasterous)

And all we get is boring races at boring tracks and the whole thing run by boring bankers. Roll on 2012 when it can all be put out of its misery, because right now if F1 was a horse you would have to shoot it.

This fan doesnt thank you Luca, in fact he thinks you have sold us out, but then we dont matter. Not even the new tracks need us. I am amazed they even bother building grandstands. This whole thing smells of deals in a backroom when the whole argument was about transparency and governance.

Given Ferraris track record on private deals I am surprised they let Luca speak for them and commit them alone without witness. As a manager I would not be comfortable at all.

What gives him the right to commit all the teams when the caveats they entered under are not met. The concorde agreement springs to mind here. This is all razzel dazzel and smoke and mirrors. JUST HAD A THOUGHT. Maybe FOTA need until 2012 to organise a proper breakaway series.

I will now go away and grump. I dont think I will be watching anymore F1 processions. The grey men have taken over. The passion has gone, all poured into Bernies pockets and Max’s cronies at the FiA.

10

This is great news. One series was the only way the sport was going to retain its credibility. Max has been forced out which is probably no bad thing.

I do believe it’s important that the teams do continue to work on cost cutting. It is unbelievable that (some) teams have been employing 800+ people to build 2 racing cars to go racing 17 times a year.

Hopefully they decide to take a few more races back to the traditional circuits, but with Bernie still pulling the strings, I think this is somewhat unlikely.

11

Oh well, definitely seems to be a case of “plus ça change, plus c’est la même chose”. That’s what a few people said would happen, rather presciently. But did it really have to be that messy? The racing might be a bore a lot of the time, but the amateur dramatics are first class. Why not could continue in the same vein and have less of the former and more of the latter in future? Might be a bit too exciting, though, for fans used to watching processions on the race tracks.

12
Cridland [CommentCrid@gmail.com]

PS- I think, for all their charms, Stewart and Jordan aren’t the spirits we want running the political side of the sport. Stewart in particular has given us a tremendous gift in his devotion to safety, and owes us little more.

But in terms of the requisite muscle and ego, Briatore might be the first choice to replace Bernie… And I wish Flavio were just a little younger, too.

Doesn’t matter. It’s like the radio guy Hamilton said during practice last week: The transition when Bernie leaves is going to hurt like Hell, and possibly for a long time.

13
Cridland [CommentCrid@gmail.com]

> And if they’re too old, how about
> Martin Brundle?

Brundle’s only excuse for leaving the airwaves would be if they offered him a tremendous amount of money… Which is not an impossible scenario.

Brundle as a couple of characteristics that I like.

First, no one has ever seriously questioned his integrity.

Second, he has humility about the sport, which is not what you’d expect from a former driver. Consider his comments a couple weeks ago (Turkey?) when a pass had been thwarted by KERS. He asked, sincerely, out loud: “So how do we feel about that?” He doesn’t have his own autocratic answer. He wants the fans to have what they want.

Like Bernie and Briatore and very few others, he understands that basically people just want to see young men drive fast in loud cars. There’s no shining truth about technology or passing or blue flags or chassis weights. That’s a tremendous mark to his advantage.

On the other hand, the leadership of the sport is piranhas, and they’d eat Brundle alive! which would be sad.

But anyway Bewers, and interesting suggestion that had never come to mind. Maybe it’s my own middle age showing, but I think of Brundle at fifty as a man with much left to give to the sport.

14

Jackie Stewart or Eddie Jordan are prime candidates for the next FIA President, in my opinion. And if they’re too old, how about Martin Brundle?

15

Now to address the real problem – the fact that the racing is akin to watching paint dry.

16

What does this mean for the new teams that entered into the championship for next year under the assumption/assurance(?), that there would be an immediate budget cap? Surely this can’t be good news for them?

17

This does bring up a question – what happens to KERS now? It seems that most teams gave up on it, but I get the impression that’s partly because they thought it wouldn’t be worth pursuing it if it wasn’t incorporated into the new series. Based on 2009 rules it’s optional, as opposed to the 2010 rules where it would have been mandatory, if I remember correctly. I wonder if we’ll start seeing some teams reevaluating KERS soon?

18

I think the thing that is interesting about this is that Mosley had planned on stepping down in October anyway, until only a couple of weeks ago when he decided he better stick around. So, that kind of nets out to 0. Then again, I guess he is stepping back in the interim, so the FOTA did get a bit of what they wanted there.

As a U.S. fan, I did get my hopes up that a new series would bring a race back to North America, so I’m a little bummed about that. I do hope Bernie took notice of the proposed FOTA calendar. Nonetheless, for the most part, I would rather have a stable series to watch on TV next year than anything, so I’m happy about the outcome overall. Of course, if FOTA could now pressure Bernie to lower those sanctioning fees where Tony George could talk again…

We have a couple of weeks until the next grand prix. So, what/who are we going to complain about now? lol!

19

suppose one could see it coming but its a huge disappointment and another nail in the coffin , at least for this old fan.

FOTA got us excited and then… what a let down

More races in the deserted desert racetracks to come, i am sure.

Good bye F1/FOTA/FIA the lot of them

20

Out of all this mess the thing I have found most interesting has been the realisation that there are many many other fans of F1 out there as fed up with the way the sport has been run as I am. Why should B. Ecclestone have the right to arbitrarily decide to drop this years Canadian GP for example? Has he been given some kind of divine authority to do so? Surely this should be a govering body’s ie. FIA decison – and they should not just rubber stamp his pronouncements?

And why should he take home 50% of the revenues FOM collects from their sky high charges to the circuits to host a GP thereby forcing the fans to pay through the nose sky high ticket prices? Hasn’t he siphoned off enough billions? The uniting of the Formula one teams into FOTA has allowed them to bring about real change. Too bad the fans can’t unite and collectively force a few changes. Up the revolution and heading for MotoGP – a far better show – says I!

21

Max has found his master, and his name is Luca de FOTA!!!!

22

I guess you’re just trying to be even-handed here James, but I don’t see how Mosley has got anything he wanted.
Big cost reductions, commitment from the manufacturers, even technical assistance to new teams were all on the table from FOTA all along – as you described in your post about the first FOTA press conference on 5th March. And as for new teams, well he hasn’t got those yet either. They all signed up on the basis of a 40 million budget cap, which is now in the wind. Will any of them actually be on the grid next March?
I suppose the one concession he did get was to be allowed to continue until the end of his term in October, instead of being put in front of a firing squad tomorrow at dawn.

23

Although I’m sure most people are happy that F1 is will remain intact, it’s interesting to hear comments, including my own feelings, that people are a little disappointed that the new series won’t come to fruition. It goes to show that FOTA wasn’t far off in their definition of F1 compared to the fans.

I do think the things that Max was pushing for were good for the sport, but the way he went about it was downright dispicable. New teams and lower budgets are definitely long term issues that need to be addressed in F1, but they do not and should not define the sport. Jamming it down the throats of the teams is rude and unappreciative of their contribution.

I’m glad Max is gone. Controlling Bernie and the CVC is the next mountain to climb…

24

Horrible news. FOTA deserves to live under the evil of Stalin/Mao/Hitler/Bush. The teams just folded a royal flush to a busted straight. Unless Bernie agreed to a 85/15 split, immediate payment of all outstanding sums (tens of millions) due under the MOU, and a 50% reduction in the cost to track promoters and halving ticket prices, reinstating some of the old venues, giving the teams 100% control over the regs, and a total dismantling of the WMSC and all the political apparatchiks at the FIA immediately replacing Mosley with Ron Dennis or Stoddart, I can’t see a bit of good coming out of this. We are now stuck with the organization that gave us the Spa decision, TMDs being movable aero devices and stewards who don’t look at the video before issuing a ruling. This is just another travesty in a long line of self-afflicted abuses. The teams will certainly regret it. The fans will certainly get an inferior show and the regs will still suck.

25

I think the “cost down to 1990’s levels” is interesting. I am sure the top teams where still spending a lot more then than other teams. so who’s 1990’s levels are we talking about?

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