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FOTA reeling as Ferrari and Red Bull pull out
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Posted By: James Allen  |  02 Dec 2011   |  4:36 pm GMT  |  164 comments

The decision of two of the most powerful teams in F1, Ferrari and Red Bull, to quit the Formula One Teams Association over the ‘stalemate’ in the organisation, leaves questions about whether the institution will survive.

And if it does not, will F1 again descend into a spending arms race between a few wealthy teams?

FOTA was formed in September 2008 to represent the interests of the F1 teams in dealings with the FIA and Bernie Ecclestone’s organisation.

It was designed to prevent a repeat of what happened in 2005 when Ferrari broke ranks with the other manufacturers who were trying to stand up to FIA and Ecclestone, and did a deal on its own worth €100 million to sign the Concorde Agreement.

Ferrari president Montezemolo, who cut that deal, was ironically one of the key founders of the FOTA movement. There have been rumours that Ferrari might have done a similar deal here but these were denied by a Ferrari source.

Nevertheless the way is open for Ecclestine and CVC to pick both teams off now with a golden hello payment to commit to F1 beyond 2012. This would leave the others in a weak position.

It is interesting that the two teams have left at the same time, although Ferrari claims it was on the move first, citing lack of trust (with Red Bull’s spending) and paralysis at FOTA in terms of dealing with it.

Montezemolo has recently expressed concern about the direction the sport is headed in and the company blamed a ‘stalemate’ within FOTA as its reason for leaving. Ferrari feels FOTA has run its course and a new impulse is needed.

There is a lack of trust within FOTA which has spurred this decision, but it’s important to remember that the RRA is a legally binding agreement which runs to 2017, so it is not as if Ferrari and Red Bull will be able to spend £100 million a year more. Meanwhile the testing agreement also involves the FIA, so this won’t change overnight.

However with a new Concorde Agreement due to to be discussed and come into force in 2013, the separation of Ferrari in particular at this stage will weaken the teams’ negotiating position.

It will greatly disappoint the other teams, particularly Mercedes and McLaren, and will lead to calls of “I told you so” from sceptics within and without F1, who thought that an alliance of teams was a waste of time.

FOTA has achieved some useful things in its time, mostly on the cost savings side; like the original Resource Restriction Agreement in 2008, the cutting back of testing, reduction in wind tunnel time, the rationalisation of engine prices to keep small teams in the game.

But that is now at risk from the split, with Red Bull and Ferrari unhappy about the next stage of the RRA, which the teams are finding it hard to agree on.

Both Ferrari boss Stefano Domenicali and Red Bull Racing boss Christian Horner asked recently if FOTA could not agree a new RRA, what was the point of having the organisation? That said, Ferrari retains close links with Sauber, which is still part of FOTA and Toro Rosso is part of the Red Bull empire.

Autosport broke the story today and got a confirmation from a FOTA spokesman, “FOTA confirms it has received the resignation of two teams. Whilst considering its next steps, FOTA will continue to work on behalf of its members to achieve the aims of the organisation.”

The row has been brewing for some time but the split comes just two months into the tenure as FOTA secretary general of Oliver Weingarten, who worked previously as a lawyer in the English Premier League. He is in the process of learning the characters involved and the complex dynamics of the F1 paddock.

There have been suggestions that the top four teams, including Red Bull and Ferrari, were going to meet independently to see if they could agree a framework outside FOTA for a way forward on RRA.

Most teams don’t have a large enough budget to be affected by the RRA, but it does place a ceiling above the big teams and stops them from engaging in a spending arms race which would skew the competitive balance of the sport and ultimately could lead to the failure of several medium and small teams who would be unable to compete.

It may be that Ferrari and Red Bull’s move will focus minds and in the two month notice period they must serve, it will force agreement which saves the organisation.

But if FOTA splits, it would be a personal crisis for FOTA chairman Martin Whitmarsh, who has invested three years in the development of FOTA because he believed it was for the greater good.

“F1 has survived economic storm that began in 2008 better than we might have and I think that there are a number of teams that wouldn’t be around without that the spirit of co-operation we’ve had in many areas of FOTA,” he told me in an interview last month at McLaren’s factory.

“We have limited the arms race on wind tunnels by limiting the scale to 60%. Some teams were having to spend £50 million for a full scale tunnel to be competitive. We’ve limited the hours; it was getting to three shifts 24/7 and now our tunnel runs for half of that time. We had to also reduce the CFD time. We are spending less than half the money we used to externally and we’ve been through a painful redundancy process. None of these measures are disputed now and we may well use some of those mechanisms to further control costs.

“The teams have always fought each other on the track and off the track and not always recognised that we’ve got a lot of common interests in our core business.

“Do we have lots of challenges? Yes. Will we do everything we want to? No.

“I think FOTA has achieved more in its three years than the teams did in the previous sixty.

“We wouldn’t be very smart if we don’t stay together.”

That could all be in jeopardy now.

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1

Guys – enough already, look at the big picture. This is just great for The Off-Season Show. Here’s how it plays out:

F1 – The Bold and the Beautiful…

Story so far: Bottom line – it seems Red Bull has been cheating on the unenforceable agreement, and wants to continue doing so. Why have the best aero guy in the world if he can’t play with his toys enough… and Ferrari doesn’t want to have to play with one hand tied behind its back, especially with the Fiorano test track sitting idle.

See next episode: With Arabs writing the checks for McLaren why would they care, except, awkwardly but incidentally, their guy found that when the music last stopped, he was FOTA chairman. This leaves Mercedes without a bottomless money pit, and the rest who can’t afford to spend to the limit anyway. So the pecking order looks much the same, but the sound of Euros circling the drain is getting louder….

Season finale: Bernie comes riding in with some outlandish proposal for the future that will have the teams circling the wagons and scurrying back together, saving the day. After all, why would he want them spending all that money on engineering, when it could be aiding his pursuit of Carlos Slim….

Footnote: In a parallel universe, writers are working on the sequel… dubbed “F1 – the breakaway” with a working title from the sixties: “Intercontinental Formula”, with the same predictable results as that non-epic…

Disclaimer: The FIA is contracted to a different production company specializing in silent movies only, and has nothing to do with anything outside Paris.

2

I disagree with comments that this proves a limit set by the FIA wouldn’t work.

It would if it was implemented along with a vast reduction in the rule book…

so rules go something like this:

1. max spend $150

2. max dimensions & weight

3. Open top open wheel formula single seat

4. Crash tests & driver protection zones stay as is

5. All accounts to be submitted by season end + 1 month for external forensic audit

6. Testing allowed but it comes out of the annual budget

No its note exhautstive….

But then genious engineers can come up with innovation that may actually get to invent something, and it’s allowed in the rules because its up to the engineers how they spend the money.

3

I see that Toro Rosso are still in FOTA.

Could there be a case for kicking them out as this will give Red Bull a clear advantage.

They will have a say in FOTA, and be fully aprised of all the goings on with in it, whilst not being tied into any agreements made by it.

4

Clearly, self-governance comes with huge caveats. It is a conflict of interest and is very difficult to get right. Look atht e press in the UK and the financial services industry in many developed countries.

It probably shows why the teams should not end up with equity in the sport and rule collectively. It just won’t work. For a more relevant example look at the US and the NBA. The teams have managed to convince the press, though..

5

They should let the bigger teams spend as much as they want but driver aids for the bigger teams should be banned, that way the bigger teams can come up with new innovations especially teams like McLaren & Ferrari who make and design cars for the road. Only the smaller teams should be given driver aids like KERS, maybe a turbocharger for the V8’s and DRS to ensure they stay competitive and keep up with the bigger teams. Also teams should be given the right to have any engine they want to use as it is the Pinnacle of Motorsport, look at GT1 & GT3 and the racing is still tight with different types of engines (V12, V10, V8 etc..) Testing is definitely needed. Hopefully soon the teams can come to an agreement at some point.

6

The reality is that this organization like any other partnership-style union survives on the basis of mutual goals and trust. If one partner thinks another partner is screwing them over or is doing something beneficial to only them and not the group then there will be a whole lot of mistrust. Without trust you can not survive.

I am not sure if this is true but there have been a lot of reports for a long while now about RB’s creative accounting.

I am not sure why people are blaming Ferrari for not wanting to be apart of this organization when there is a whole lot of mistrust and after hours of negotiation no one can come to an agreement.

7

James, Speaking of the RRA; how does the RRA police “subcontracting?” For example.

Say Red Bull Racing and Red Bull Technologies for example. I believe both are separate corporate entities. Correct me if I’m wrong. What if Newey, Marshall, Prodromou is paid hundreds of millions (I’m exaggerating) by Red Bull Technologies; which isn’t bound by the RRA (Red Bull Racing is instead). And then Red Bull Racing “buys” the RB7 and upgrade packages from Red Bull Technologies for a hundred quid a pop. How does that work out then?

8

They can also be contracted by Red Bull Technologies which could pay them huge salaries for doing their job for Red Bull Racing 🙂 But I guess that if it would be that simple, everyone could be doing that.

9

FOTA was/is always going to struggle to maintain “unity” when they are trying to keep teams like Ferrari (etc) happy at the same time that they are trying to keep teams like Marussia and HRT happy. The compromise needed to keep them all happy at once is simply too great.

Obviously rather “odd” that both Ferrari and RBR have bailed-out at the same time and fair to say that it might’ve been orchestrated by some sort of puppet-master but fact is that both Teams feel that FOTA provides no value to them.

Why be a member of an association if (1) there’s no perceived benefit in remaining a member and (2) the association cannot convince you to stay-on as a member ?

10

A note about RBR.

What do we think about RBR in all this business?

When you think about it, it is not in RBR’s interests to have the whole Resource Restriction fall over and then by default let the other large teams roll over them through superior testing/development resources.

RBR has found some nice little loopholes that they have exploited to create a car that has, so far, been proven not to break any current F1 rules.

By breaking up the current spending / development restrictions, they invite much larger organisations to beat them through sheer size and resources. Not through cleverness.

What I am saying is don’t be too quick to generalise that Ferrari and RBR are simply out to grab the cash. Although they are being paid for this for sure, the back room deals will almost always be for things other than just more money.

Think about it. 🙂

11

James – are you able to shed any light as to how RBR could have overspent their limit? Is it just everything in general? Or are they arguing one type of spending should be excluded or reclassified?

12

Im happy for spewnding to go out of control , i would personally love 3 cars a team and leave the likes of marussia, HRT & sadly Caterham behind along with maybe a couple more and give the teams who can afford it an extra car and some more close competitive racing.

As we are seeing this year there isn’t enough seats in fast teams for all the fast drivers out there.

if this wre to happen we’d probably see Sutil in a mercedes or Di Resta. Perez in a ferrari.

Grosjean Raikkonen and Senna in renaults. etc etc

13

Spending out of control and 3 cars per team? The top three teams field 3 cars each (12 cars), abd we need 24. when you consider that it is probably only the top four who have their budgets under control and a good mix of sponsors, it would be interesting to know who you beleive would fill the remaining places. Just look how the like of Williams & Sauber had to work to fund their racing. As for the rest they almost appear to be racing from week to week on scarce resources. How is a 3 car per team series going to stimulate competion? Team Orders would be interesting to observe, but would they induce the racing we want? F1 needs a RRA. I never thought I would ever agree with Max, but he almost got it right on cost control (excluding the $40 cap), he recognised that the world was changing, we just need RBR and Ferrari to recognise this.

14

Correction: $40m cap, I’d enter myself if it was $40

15

Ferrari are trying something to slant the playing field in their direction, and Redbull, as the champions and class of the field, feel forced to go with them to maintain parity. Redbull has a totally different business model to Ferrari, look at the difference in their products – they have to sell a crap-ton of fizzy drinks to be as good as they are and can’t afford to let Ferrari work an angle that gives them an unfair advantage.

I now expect everyone else to follow – Merc won’t be happy with this, neither Renault as they both have cars to sell, and McLaren are NEARLY in WDC challenging form and can’t afford to let all these other guys do extra testing etc.

16

A lot of comments, most giving sensible insights BUT as a few have mentioned, F1 in NOT a sport for the major players, but a ‘forum’ to place their wares on display, by that I mean road cars, the whole point of F1 to those teams. How better can the sports car manufacturers put their message across than by winning races and championships? I have followed this ‘circus’ for more years than I wish to remember, originally as a Lotus fanatic, in the true term. I have enjoyed so many battles between drivers and teams, all at the cutting edge of development. However, in the name of cost-cutting, this edge has been eliminated, all teams must be on ‘a level playing field’ – the in-word – instead of extending knowledge. I have said before, and been jumped on by the unknowledgeable, that without this desire to improve road cars, F1 will die. Sadly, this is another nail in the coffin. F1 MUST get back to it’s origins to survive otherwise it will be just another formula in road car racing.

17

As I have exclusively predicted exclusively here a coupla weeks ago, it’s the end of the road for FOTA. Comes as a natural result of what F1 has always been – the piranha club.

One guy who’s now having a good laugh is probably DJ Kolles from OTA, One Team Association!

I’m being slightly radical, for sure, you know, but I don’t see F1 surviving past 2020. The model the sport has adopted is just not viable. I think F1 guys go racing basically for their own pleasure, the sport may as well be known as the FIA Formula 1 VIP World Championship. Didn’t Da Big Dee Montezemolo say he couldn’t care less about F1 going to pay-per-view channels as long as 5 or so minutes of highlights were shown in the middle of the night 2 or 3 days after each GP? Kinda shows you what F1 people are all about.

I’ll probably enjoy this last decade of F1 racing, until LMP1 and GT3 based chamionships take over.

Hope this was the most radically radical comment on the year here; if it’s approved I’ll eat my hair.

18

Remember to post the video of yourself having the meal! 🙂

19

As a McLaren fan, I’m worried what this will mean for their competitiveness next season and beyond (especially if Ferrari and Red Bull get themselves into a position where they can spend $$$), but what is more worrying is the recent spate of individuals leaving McLaren for other teams: Caterham, Torro Rosso, Ferrari, Sauber. James, any insight on this? Why is it happening and what is McLaren doing to counter this outflow?

20

James,

It will be interesting to see how Mercedes respond. Do you think they will quit F1 and revert back to being a engine supplier if spending levels start to increase. They purchased Brawn F1 on the presumption of a team being able to manage its F1 costs didn’t they?

21

They won’t be happy, that’s for sure

22

It is pretty clear now what the remaining F1 teams in FOTA have to do. Quit as well!! That way come negotiating season with Berinie, he does not have FOTA membership as a negotiating weapon against anyone. Better yet, these two teams that quit can’t use it to gain an unfair advantage in the contract as by the very lack of the organisation existing suddenly eveyone will be back on a level playing field.

So all that these two teams have done is dissolve a very usefull public image of solidarity. A bit short-sighted really, and as always in F1, most probably a decision taken by posturing egos.

Some of these blokes are lucky there’s still an audience for the statement ‘pinnacle of motorsport’.

23

It’s a move by Bernie.

FOTA, despite being a difficult idea for the piranha tank to work with, represented the greatest threat to the profitability to the current and future F1 rights.

The Concorde agreement is approaching quickly and if the teams do not demonstrate that they can work together, then they will have to individually negotiate and be collectively worse off.

So it’s not really about Red Bull and Ferrari, really. I would imagine they’ve just been suckered into a better deal with Bernie. Getting both, considering the tifosi and the success of Red Bull, is quite a coup.

The fact that FOTA was saying 90% of the revenues should go to the teams means Bernie has to kill it, because otherwise the rights which CVC want to sell would be worthless.

He’s just being a very good employee of CVC, making sure they profit from the rights and that a new buyer comes in under a similar deal.

It’ll be interesting to see how FOTA responds – breakaway series, perhaps?

24

90%?

Even if the teams were paid ‘just’ 70%, F1 would have made a £76.7m net loss last year.

25

I think the problem here is a lack of trust, with Ferrari unhappy that FOTA didn’t hold Red Bull to account over spending.

26

Oh – okay! Colour me corrected. Thanks James.

27
Mohammed Al-Momen

so Ferrari left because it wants FOTA to check Redbull. And Redbull left because it was upset by Ferrari?

28

The testing ban was illconceived and underconsidered from the outset, can anyone tell me that the likes of Kubica or Kimi shouldn’t be allowed time in a current car before they hit the tracks again? Love him or hate him how much better would Schumacher have performed had he been allowed to acclimatise to the current cars and tyres, and before you answer that, how much more exciting would the races have been if he had? Banning active F1 drivers from testing might hold some water if it provided promising youngsters and returnees an oportunity to get some meaningful mileage under their belts. Then again I don’t believe that you can legislate a technical formula as cutting edge as F1 and expect instant results. How can anyone be surprised that the teams can’t agree, they never have done. Sure they’ve put on a front together with the corporate smile when push came to shove, but without exception every team looks out for its own. People on these forums cry out for “entertainment” when in reality you would be best to instigate a one make series. Any racing team be it a Manufacturer based team or a pure racing team would want to win and they win by having an advantage. Take the advantage away (to increase excitement)and it becomes more of a lottery or NASCAR/CART, no thanks!

On a different note, although we aren’t aware of all the facts, from an outsiders point of view, how disgusted are you with the way Rubens is being treated? Personally I think he deserves a lot better.

29

The tires were new to all the drivers this year. MSC fans need to stop using the tires as an excuse to his underperformance.

30

I’m not an avid Schumacher fan I was simply giving examples, however now you mention it, you have to remember when he retired they were using grooved tyres not slicks. As for under performaning, ask Vettel if he underperformed in the ROC!

31

Huh? he was faster than Rosberg in most races. His underperformance in qualy is a mystery though.

32

This is the F1 Prisoners Dilema. FOTA was never going to work because its always better in the short-term to put self-interest first, but in times of crisis the group would actually achieve more in total (FOTA fans forum anyone).

That’s why this is bad for F1, but sadly innevitable. Ferrari and Red Bull have behaved predictably I’m afraid.

33

Know its way off topic but is there any thruth to this bit of speculation?

http://www.confidential-renault.fr/Renault-et-Total-au-chevet-de-Romain-i2600

Basically sais that if Lotus/Renault don’t sign Grosjean to a full time race seat then Total could withdraw its sponsorship & Renault would start charging more for the engine supply.

34

Grosjean has support from Total but don’t forget he’s also managed by Genii and Boullier. I think there are some more fundamental changes in the team which have a bearing on why happens next

35

I’m expecting Boullier to be replaced fairly soon.

36

I still consider those kinds of arrangements to be *such huge conflicts-of-interest that I just cant believe they are allowed.

How can it not be so if your manager/agent is your boss too??

It’s just crazy.

37

James do you think that without the RRA this years championship would have been alot closer with Ferrari and mclaren having the “resources” to close the gap to the red bulls alot quicker and maybe the championship would have lasted a few races more ?

I understand that bringing back testing would be a massive cost that all teams may not be able to afford and some restrictions may be a good thing on this but I don’t feel teams should have limits put on wind tunnel testing or how much they spend on development every sport has its top dogs and it’s down to the the teams below them to try and knock them off the top as red bull have done and if the rumours that keep popping up on websites and in magazines are to be believed red bull have had to break the RRA to do so. All though I think there are pros and cons to the RRA I just feel it maybe robbing us of a closer championship I don’t think red bull would have had it all there own way like they have if teams could develop there cars with no restriction on wind tunnels especially

38

Works both ways – RBR would have been able to spend even more!

39

……..the latest news has just broke on this matter, tune into skyF1hd for full details 🙂

40

Probably a little early to say which way Redbull are turning – they may be unhappy with the direction of some decisions – that doesnt mean they want the cap to disappear.

Going off track record its probably safe to assume Ferrari has left for the opposite reason…

41

Reading all the above comments you guys need to get a grip. It’s a business shareholders money is invested a lot of money off course they need to get the best result for their company.

Complaining they are selfish or whatever is plainly childish I can guarantee if it was your money or house on the line your attitudes would be different.

I suggest that if you actually have been following the fota saga it wouldn’t be a surprise to see that the problem is actually Ross and Mercedes frustrating any agreements

42

So Ferrari say they want to bring back testing & cut cost’s & suddenly there the bad guys?

I thought everyone here wanted testing back? Or is that only when its not Ferrari saying it?

Fact is Ferrari & Red Bull have left because nobody can agree on anything, Each team wants there own thing & what each team wants isn’t what the others want.

People here blame Ferrari & Red Bull, However what about the other teams who are blocking things like testing which as I said I thought everyone here wanted to return?

Red Bull & Ferrari have left FOTA, However that doesn’t mean they are to blame for the failings of FOTA in the recent discussions.

Why is it the 1st reaction of almost everyone on this site to immediately blame Ferrari? Nobody here knows the true facts yet its all immediately Ferrari’s fault?

Im not a Ferrari fan BTW.

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