The current problems

The past week has been among the most tumultuous in the history of Formula One. In the past 60 years we have endured many instances of bickering and fighting among the competitors, and between the competitors and the governing body, but never have we been in a situation as bleak as this.

The announcement by Ferrari – coming quick on the heels of similar by Toyota and Red Bull – that they would not be lodging an entry in 2010 should the rules remain as they are has been dismissed by many as political posturing and the follow up from Renault also, but there is something deeper, something much more concrete here than mere words and threats.

The Old Man, as Enzo Ferrari was affectionately known in his latter days, was fond of using the tremendous draw that his legendary marque possessed to his advantage – in the 1980’s Ferrari even went as far as building a car for the Indy car series, and it was tested by Michele Alboreto, and Ferrari famously did not enter the opening Grand Prix of the series, at Silverstone in 1950, reputedly thanks to the organisers refusal to meet starting money demands – but things are different now. Formula One is a global phenomenon, a multi billion pound business that has become a very much recognised brand, and it is in the interests of Bernie Ecclestone – and the commercial rights holders CVC – that it remains so.

This is why Ecclestone will – behind closed doors to some extent – have been horrified at Max Mosley’s assertions that ‘F1 can live without Ferrari’. In truth he is right – it can live without any team – but he’s not looking at the bigger picture, and when the President of the sport’s governing body can be as flippant as to dismiss a team that has a third – at least – of all supporters behind it then he is either being short sighted, or baiting the Ferrari board.

Ecclestone has responded that Mosley ‘didn’t mean it’ and that he was just ‘having a dig at Luca (di Montezemelo); he may be right, but it was not a clever move from a man whom we are told has a copious intellect. Insulting the Pope may have, in Italy, a similar effect.

The £40million (plus driver salaries etc) budget cap is a great idea on paper, and is – as the FIA has admitted – designed to entice new teams into the sport. The problem is that the technical freedom given to the capped teams will give them – on paper – a major advantage. The belief, also, that teams currently operating on a £300 million yearly budget can slash it to an eighth of the present level for the beginning of next year is naive at best, and ridiculous too.

Let’s have a look at the new team’s side of things: who are these teams that are queuing up to get into F1? We have heard from Lola, under Martin Birrane, and Prodrive, from Dave Richards, that they are ‘interested’ in an entry. The crucial part of their statements, however, involved the proviso that it would have to be affordable, and that they would have to be competitive. There have come the usual signs of interest from front running GP2 teams – Addax, DAMS, iSport, and racing engineering have all expressed interest.

And, of course, there is the USGPE outfit, apparently advancing apace with Peter Windsor at the helm. Lately, Joan Villadelprat has said that the Epsilon Euskadi outfit may also be interested.

That’s all very well, but let’s look at the figures: a GP2 team currently runs on around £4.5 million. To compete in F1 it would need to have the full £40million budget at hand. Then it needs to pay the drivers, buy engines, and entertain sponsors. That is if it can find any sponsors. Major names are involved in sponsoring F1 teams right now – Panasonic, ING, Vodafone, to name but three – but why are they involved? A great deal of it is that they are associated with major worldwide brands, and take the added exposure that comes with that.

Assuming the withdrawal of Toyota, would Panasonic be willing to switch allegiance – even at a reduced rate – to sponsor iSport? Does it make commercial sense?

The truth is it does not make commercial sense at all: every time Toyota advertise using their F1 car Panasonic get exposure (and vice versa) but where, exactly, will iSport be able to use the same level of marketing power as the world’s biggest motor manufacturer?

That’s one problem new teams have – finding the money year in, year out – and that’s after they fund the improvements to – or acquisition of – a factory and all that goes with it.

Back to the current teams, and the major problems they have are twofold: the likes of Ferrari cannot possibly run on a budget of £40million, and the board are mightily fed up with the way the FIA is handling the governance of this sport. Already this year we have seen them try to push through the ‘wins for titles’ rule illegally, and there are concerns that the teams are not being listened to.

That latter concern is undoubtedly so, for the FOTA has but forward its own very clear and well thought out mandate for cost reduction, which has simply been ignored by the FIA.

Tomorrow (Friday 15th May) sees FOTA representatives meet with Mosley and Ecclestone to talk about the problem; at the same time as the FIA continues to insist it will not back down to the teams threats, Ecclestone assures the world that all will be well, that a compromise will be found.

We have to hop that is so, for there are strong rumours around that Mercedes Benz is using its might to bring Force India and Brawn GP onto the side of the FOTA force; this would leave only Williams teetering between the two camps, and with potentially more to gain from siding, perhaps reluctantly, with the FOTA point of view.

If something is not done very quickly we face this prospect: on May 30th – the day after entry for the 2010 season closes – the FIA will have a maximum of three current teams signed up – Brawn, Force India and Williams. If the Mercedes strong-arm stories are right, that could be just one, maybe none. Mosley and co then have to hope for a number of new teams to sign up: the USGPE entry looks surprisingly likely – there is money there, and an infrastructure taking place – but of the others the situation is shaky at best, especially with money hard to find.

Remember that a field of less than 16 cars represents a breach of contract with the promoters; the situation for Bernie and CVC is untenable – he needs 16 cars with big names, big brands, in the game for next year, and he knows that full well.

The possibility of the FOTA faction setting up a rival series has been discussed: this carries more weight than one may believe at first. A1GP is a troubled series that has not reached the market it needs. It is also on with which Ferrari has a very strong link (it supplies engines and more); the story doing the rounds is that the FOTA camp could be offered the series – lock, stock and barrel – for around £300 million, giving them a readymade infrastructure that could very quickly be moulded to their needs.

There are plenty circuits available for them to race on, and a readymade bunch of drivers to cross over. The sponsors would go where the big names are, the TV companies would be knocking on the door and we would have F1 – as it is – with a different name.

Far fetched? In truth, no, but it is unlikely. Max Mosley, and the FIA, has backed itself into a corner this time. There is no more ‘special relationship’ with Ferrari, there is no more safe knowledge that Maranello will side with the boys at the Place de la Concord. If the rules are not changed dramatically, if the demands of FOTA are not met, F1 as we know it is dead in the water.


Written by 3 on Thu, 14 May 2009 09:39:12