[Updated 3rd July] Despite much talk and a lot of effort behind the scenes, the deadline for agreeing a new package of cost control rules for next season came and went on June 30. This date was important because it was the date by which things could be passed by a majority. After that unanimity would be needed.
There is talk of extending the deadline to a new one of July 24th. But if the original deadline has passed, many are asking what force a new deadline will have. And now the teams and the FIA are in something of a limbo. Most of the teams turned to the FIA to regulate the Resource Restriction Agreement from next year onwards because, as the F1 Teams Association, they had failed to do so itself.
The problem is now a legal one. The teams are looking to FIA president Jean Todt for leadership, while he is trying to avoid getting into a legal battle or putting the FIA in a position where it could be undermined. Red Bull are the ones sitting outside of this process. Todt is trying to draw Red Bull into the process, but other team sources say that Red Bull has taken to sending a lawyer, rather than a senior engineer, to meetings. Red Bull has denied this.
A lot of work has been done behind the scenes by people at all levels to try to move the agreement on costs forward. For some teams this matter is really urgent as they are close to the edge financially.
But despite the imperative, it’s stalled. It’s leading to a lot of frustration, while on Red Bull’s side it’s leading them to feel isolated, as shown by recent comments from Helmut Marko about the team being singled out for a rough time, with the safety car in Valencia and such like matters. They want to move away from the RRA method of comparing activities in different teams with different structures and focus instead on tangible things, like the number of components and engines a team can use.
There are two sides to the RRA process ongoing at the moment: the chassis side and the engine side.
On the chassis side there is quite some progress: some things have been agreed by most of the teams (with the exception of the two Red Bull owned outfits); measures on in season testing, reducing the number of days of wind tunnel and CFD as well as further cutting the number of team personnel at races. These were agreed by the seven FOTA teams plus Ferrari, Sauber and HRT. In fact they are mostly there on chassis and appeared to have the majority they needed to get it through, but no fax vote took place.
On the engine side things are more difficult, with manufacturers flat out developing the 2014 small capacity hybrid engines at great expense, but teams bridling at the costs they are likely to face for a supply of these engines. Teams currently pay around €5 million per season for 8 engines per driver plus some pre-season test units. The 2014 engines will be significantly more expensive at the outset, up to €10 million per car.
Clearly Red Bull is anxious here that if engines are to become a performance differentiator again that Mercedes doesn’t succeed in squeezing them on the chassis side, only then to make the difference with an expensively developed engine.
As the governing body of the sport the FIA could be considered to be in a position, with no Concorde Agreement in place from December 31 onwards, to impose whatever rules it thinks are appropriate for next season. But it’s concerned about legal threats. And Todt wants to find consensus.
Meanwhile the FIA is negotiating with Bernie Ecclestone for improved financial terms. It’s bound by the 100 Year agreement (which was made in the early 2000s, but only came into force in 2011) whereby the FIA sold the commercial rights to F1 to Ecclestone’s company for 100 years for $313.6 million. This contract is the cornerstone of the F1 business and the planned flotation.
Todt is trying to get a payment for the FIA to reflect the fact that things have moved on a bit since that deal was agreed, especially with a flotation under consideration, valuing the business at over $9 billion.
As for where it goes from here, some say the FIA has a lot of power and holds important levers which are needed for the new Concorde Agreement to be reached, the flotation to take place and the sport to be regulated.
Others feel that having done the 100 year deal it’s in a weak position, as a governing body that has no ownership over the sport and with others agitating to take on a rule making role.
These things will be tested over the coming months.
Some small measure are likely to be agreed over the coming months, like savings on wind tunnel use, but the big ticket items which could make a material difference in 2013, are now unlikely to happen, because the deadline for majority, rather than unanimity to carry the day, has passed.
To Keep up to date on all the latest developments in F1 news, click on the banner below