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Posts Tagged ‘F1 breakaway’

Last night it looked as though World War Three had broken out again between the F1 teams and the governing body, but having got to the Nurburgring and heard both sides, it seems to me that, bizarrely, a lasting solution is close.

Despite the fire and brimstone of various statements over the last 48 hours, in fact the two sides are close to signing a new Concorde Agreement which would return stability to the sport. This document would also be signed by venture capital firm CVC, who are majority shareholders in the commercial rights holder, with Bernie Ecclestone.

CVC and the teams have been talking directly this week and are both keen to get this situation resolved so they can get on with the future. From the briefings I’ve had today it seems as though the teams and CVC have, to some extent, marginalised Ecclestone and Mosley in this latest phase of the story, but I doubt that those two men see it that way.

Mosley is playing the strong man, looking for two key conditions to be met; the teams to sign the new Concorde Agreement and at the same time to agree a legally binding agreement among themselves (including the new teams) to reduce costs to early 1990s levels. The feeling is that once those two things have been done, he will not stand for re-election in October, because he will have achieved what he set out to achieve.

For the teams, their conditions are that the FIA must sign the agreement too and Mosley must step down in October.

The drama of the last 48 hours was all about Mosley giving the three new teams and the two non-FOTA teams (Williams and Force India) a voice in the 2010 rules. After the rather farcical situation yesterday when the eight FOTA teams were told they were not entered in the 2010 championship and therefore had no vote, the five remaining teams then simply voted through the package agreed in Paris on June 25th. This means the rules for next year will be as 2009, but with no refuelling and no KERS. There will be no budget cap and Cosworth will have no special performance advantages.

The FOTA teams, not surprisingly, were uncomfortable with the three new teams having a say in the rules, given that they have no experience of F1 and have contributed nothing to the sport so far. But they have entered the championship and Mosley wants to make sure that they are represented.

The FIA issued a statement this afternoon ‘setting the record straight’ about the events of the last couple of days, which led to the eight FOTA teams walking out of a technical meeting.

It is a strange document and one which, frankly, no-one in the media or among the teams fully understands. But that doesn’t really matter because the essence of it in is the last two lines; a new Concorde Agreement is being finalised and could be signed in the next week.

Once that happens, stability will be restored to F1.

The FIA surprised the eight FOTA teams by saying that as things stand they are not entered into next year’s championship. This message was delivered by the FIA’s Charlie Whiting during a technical working group meeting. I spoke to the FIA and the reason why they are not entered in the FIA’s eyes is simply that they have not physically put an entry in yet, even though they’ve said they will and the entry list was published by the FIA after the Paris meeting with the eight FOTA teams on it.

I’ve spoken to a few team bosses about this today and they seem quite calm. They are focussing on the facts as they see them and working with commercial right holders CVC in particular, towards a conclusion which will see them sign the new Concorde Agreement, possibly in the next few days.

They are still mentioning the word ‘breakaway’, as an alternative if things do not go according to plan and seem comfortable to do so, but the reality for them is that they will sign the agreement as long as the FIA signs it too. That said, if there has been no movement by the end of this month then the “B” word will be aired again.

Tonight a FOTA spokesman said, “We no longer have either the willingness of the intention of taking about the FIA president.”

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It took Muhammad Ali and Joe Frazier several high profile bouts to settle their differences and it seems that we are in for a rematch of Max Mosley’s FIA vs Luca di Montezemolo’s FOTA; a heavyweight showdown, just when we all thought things had been sorted out.

There may not be a catchy title to this bout, such as the “Thriller in Manilla”, but you certainly wouldn’t call this weekend’s scrap, set for the Nurburgring, “A mere trifle in the Eiffel”.

This is serious and FOTA have responded to being informed that its eight teams are not entered in next year’s championship with the line that this could put the future of F1 in jeopardy.

It’s been an odd week in F1, with the Bernie Ecclestone/Hitler stuff and now this. Non-F1 people I speak to in the media and public consider the sport as a bit of a pantomime. But I think it’s deadly serious and it has to do with money.

I noted that CVC were ‘shocked’ by Bernie’s comments but supportive of his apology, but I cannot imagine they are very happy about today’s development.

The document offering the debt on F1 to interested parties suggested that the new Concorde Agreement had been agreed and that the teams would all sign up during 2007. Here we are two years later and it has not been signed. That has to be creating some real pressure.

Part of the ‘peace deal’ agreed on June 24th was for the FOTA teams to commit to FOM until 2012. If the FIA considers them not to be entered in the championship, then one wonders where this commitment stands and the absence of eight key teams, including Ferrari, must threaten F1’s business model.

CVC is the venture capital company who hold 75% of the equity in F1’s commercial rights holder, which is subject to a debt of over $2 billion. It is felt that pressure from them led to the ‘peace agreement’ between FOTA and the FIA a few days after the British Grand Prix.

But almost immediately that deal started to unravel. First we had FOTA’s hubris at ‘beating’ Mosley, delight that he was quitting in October, accusations that he was a ‘dictator’, suggestions that the next FIA president should be ‘independent’. Since then there has been a steady drip of insinuation about the FIA’s Alan Donnelly and his role in the approval of new teams. We have also had suggestions that the new teams were obliged to sign up for Cosworth engines, as the Northampton firm had indicated that they needed three teams to make their F1 engine programme viable.

The FIA acted last night with a warning that unanimity would be required when finalising the 2010 rules and that would mean the non-FOTA teams, including the three new teams, seeing eye to eye with the existing teams.

I’m travelling at the moment to Germany, so I’m going to have to do some digging around tomorrow to find out what has motivated this latest move. But it looks set to push the FOTA teams back towards their previously suggested plan of a breakaway. If they are not entered in next year’s F1 championship then presumably they are free agents, unless they are now caught by commercial contracts obliging them to find a solution with the FIA.

FOTA believe that the deal struck in Paris on June 24th meant that they were entered in the championship (an entry list was published with their names on it) and that they had carte blanche to agree the 2010 rules themselves, which would then be rubber stamped by the FIA.

The shock of today’s news is that this appears not to be the case. I can’t wait to find out what this turn-around is based on.

The FOTA teams walked out of technical working group meeting at the Nurburgring today and a statement this afternoon shows their exasperation,

“As endorsed by the WMSC and clearly stated in the FIA press statement of 24 June ‘the rules for 2010 onwards will be the 2009 regulations as well as further regulations agreed prior to 29 April 2009′. At no point in the Paris discussions was any requirement for unanimous agreement on regulations change expressed. To subsequently go against the will of the WMSC and the detail of the Paris agreement puts the future of Formula 1 in jeopardy.”

Off to the Eiffel mountains we go then, into another weekend of great uncertainty.

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Speaking to the Italian media after today’s breakthrough agreement, FOTA and Ferrari president Luca di Montezemolo took quite a strong line on the man sitting on the opposite side of the negotiating table from him these last few months,

“The satisfaction is that all of our requests have been accepted, ” said Montezemolo. “To us three things were most important; that F1 stay F1 and not become F3, that there is no dictator, but that there was a choice of rules, agreed and not imposed; and that whoever had a team was consulted and had a voice. Mosley has announced that in October he will stand down, with an irrevocable decision, and that from now on he won’t get involved in F1.

“Now finally we have stability of the regulations until 2013. I want to thank all our fans, because the public had had enough of these changes. Let’s hope that next year, with the rules finally stabilised, we will see also a winning Ferrari. Could Mosley change his mind? He can, yes, but we won’t. What has been fundamental is the unity of the teams, of the manufacturers. Ecclestone said that he fed FOTA’s cards to his dogs, Mosley said that he didn’t know what FOTA was, today it seems to me that both of them have something different to say.”

In other words, “Its FOTA, not Schmota”.

Meanwhile Mosley has put his side of the story this afternoon,

“They (the teams) have got the rules they want and the stability, we’ve got the new teams in and we’ve got the cost reduction – that’s very helpful. There is no budget cap because costs will come down to the levels of the early 1990s in two years – it’s a different way of doing the same thing. I always thought there wasn’t much between us; now we’ve agreed there isn’t.

“My departure was planned, agreed, arranged. As far as I’m concerned, the teams were always going to get rid of me in October; well, they still are. All the staff have known for months, but obviously I couldn’t say it publicly because the moment you do you lose all your influence. Now I don’t need influence, it’s a satisfactory situation. I can have a peaceful summer for the first time in three years. Whether the person who succeeds me will be more to their liking remains to be seen…”

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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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Formula 1 looked into the abyss, didn’t like what it saw and has has stepped away from the brink today as a deal has been struck for the FOTA teams to commit to race in F1, ending the threat of a breakaway.

The commitment from the manufacturers and teams appears to be only until 2012, not it would appear the 2014 commitment that Bernie Ecclestone and Max Mosley were looking for from the manufacturers.

Details are still to emerge of the deal and what is entailed, but early indications are that Mosley has agreed not to stand again for office in October. He is afforded a dignified exit in October, having secured what he was looking for, which is lower costs, new teams in the sport and a commitment of sorts from the manufacturers to stay in.

However, he has always maintained that upon his retirement he will be moving on to the FIA Senate and the issue of his successor will be of great interest now, with ex Ferrari boss Jean Todt always considered a candidate. Stability of rules and the re-introduction of the F1 commision in the rule making process will have been a central part of what Montezemolo negotiated.

Thus whoever becomes the new FIA president in October they will play an intrinsic part in the next stage of Formula 1. The teams will be looking for a completely different style of governance and it will be interesting to see what the FIA comes up with.

Mosley pushed the teams to the edge in recent weeks, as the two sides failed to find any compromise over how to control costs in a way which would satisfy both sides. However, by bringing things to a head with the announcement of the breakaway, FOTA has forced a deal to be struck. Sponsors, circuits and TV companies were screaming and it would have caused immense damage for the uncertainty to have lasted long.

FOTA had a powerful hand to play and by making moves to set up their own series, they showed they were serious. There is no doubt that Ecclestone’s partners in the commercial rights ownership, CVC, will have applied intense pressure to find a solution.

“We have agreed to a reduction of costs, ” said Mosley. “There will be one F1 championship but the objective is to get back to the spending levels of the early 1990s within two years.”

This sounds like something around the £40 million mark and the significance of the two years is that it gives the teams the ‘glide path’ they were looking for. There will be mass redundancies in F1, but not all at once, as teams downsize and recalibrate for the future.

Details will emerge throughout the day and the official 2010 entry list is expected to be announced later.

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The world motor sport council meeting is underway in Paris, where the FIA president Max Mosley will defend his handling of the crisis over 2010 entries and FOTA president Luca di Montezemolo will present FOTA’s case for why the FIA needs to accept the conditions the teams have placed on their entries.

There were eight world council members at Silverstone on Sunday, the FIA’s David Ward was taking them round and they are reported to have been unimpressed with what they see as FOTA, backed by the manufacturers, attempting to muscle the FIA out of the picture.

Max Mosley emphasised this point in his letter to the FIA members yesterday. If they feel that they are under threat as an institution, they are more likely to back their president. One of the things Montezemolo will be careful to do today is not show disrespect for the institution of the FIA. But he carries significant weight as he has the backing of the European motor manufacturers’ body.

This dispute has become very personal, with Mosley, Montezemolo and Flavio Briatore getting involved in some very public mudslinging. It does come down to personalities and Montezemolo will thread a difficult path today, asking the WMSC members to grant the teams’ conditions for entry without undermining the FIA as a whole.

Mosley has said that this threat to the FIA makes him feel inclined to stand again for president in October, but there could be some room for negotiation there.

The problem for Montezemolo is to demonstrate the long term commitment of the manufacturers. Mosley has said that the budget cap would be unnecessary if the manufacturers would sign up for five years. This point was emphasised over the Silverstone weekend. The manufacturers have offered to commit to 2012 but so far no further.

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Things in the F1 breakaway world are intensifying as we count down to yet another potentially decisive moment, the FIA world motor sport council meeting tomorrow morning in Paris.

Against a backdrop of eight of the current F1 teams wishing to break away and signs of a lack on confidence from some of the proposed new teams, everyone is waiting to see whether there will be some kind of attempt to oust FIA president Max Mosley, or indeed any kind of attempt by the WMSC to get the FOTA teams to re-engage. If nothing is forthcoming then FOTA’s preparations for 2010 will continue apace.

The Italian contingent at the WMSC will be closely watched; there are three of them, including Luca di Montzemolo, the Ferrari and FOTA president, Enrico Gelpi as well as Gino Macaluso, who represents the karting world.

On the face of it, this is a scheduled meeting of the WMSC and it was due to ratify the entry list for 2010. When Mosley announced on Friday that he was launching a legal action against FOTA, the entry list was put on hold. Mosley said on Sunday that he has dropped the legal action and he refers to preparing the legal action in his letter. Nevertheless, the question may well come up tomorrow about who is on the entry list.

Mosley is going to have to be nimble, he’s well aware of the teams position that there can be no deal to bring them back into the FIA series unless he is replaced and today he wrote a letter to the member clubs of the FIA, essentially the people who have a vote, which I have seen this afternoon.

It states that FOTA’s purpose is to take over the FIA’s regulatory function in Formula 1 and quotes the recent communication from the European Car industry association (ACEA) which complained about the lack of transparency in the FIA’s governance.

“Over recent weeks it has become increasingly clear that one of the objectives of the dissident teams is that I should resign,” said Mosley.

“It is for the FIA membership, and the FIA membership alone, to decide on its democratically elected leadership, not the motor industry and still less the individuals the industry employs to run its Formula One teams.”

In the letter Mosley adds that he now intends to stand for another term, which will only strengthen the resolve of the FOTA teams.

He has made concessions since FOTA announced its breakaway. In a surprising change of heart he said, that there does not have to be a budget cap, but a substantial reductions in costs.

At the moment, it looks like the momentum is with FOTA, who will be looking for something from the world council to make them change their minds. If that is not forthcoming, a better share of the revenues from the sport might be put on the table, but if the governance structure remains the same, then their main reason for going their own way remains.

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The noises coming out of the FOTA teams on Sunday evening were quite resolute. They are not swayed by the latest suggestions from Max Mosley of fresh dialogue and are pressing ahead with preparations for a breakaway series. Currently Flavio Briatore is making the running on this, given his strong reputation as a wheeler dealer, he is being positioned as the ‘new Bernie’ in the FOTA set up.

He has been in touch with several recent F1 circuits, sounding them out, preparing the ground. Several circuits are under the control of the teams anyway, like Fuji (Toyota) and Mugello (Ferrari).

“We will have it ready in the next few weeks. We have been planning for several weeks already. We want a Formula 1 championship organised by FOTA, ” said Briatore.

Briatore is a credible figure in this role. He and FOTA will appoint agents to start discussions with TV companies. I would imagine they will insist on free to air TV, rather than pay companies, like Sky, but we will see. It’s going to be tough in this climate. In the UK, neither ITV, Channel 4 nor Channel 5 would have much money to offer for a breakaway series, especially as most TV execs would know from experience that divided sports championships usually don’t work. Common sense tells you that everyone would prefer to retain a Formula 1 world championship with all the strong teams in it. FOTA’s point is that if they have to do their own series, the teams are clear that they will do it,

“The decision has been made by FOTA, ” said Ross Brawn. “FOTA now has to press ahead with its ideas and plans. We can’t wait until January and decide which way it is going to go. As each day passes, and each week passes then the options for reconciliation will reduce.”

The teams are suggesting that by the end of July most of the pieces will be in place so any compromise will need to be sorted out before then.

FOTA has been involved in plenty of working groups to frame technical regulations in recent months so they should not take long to draft a set of regulations, which embrace the vision they have for lower cost, but high technology racing.

“Meetings [to frame the technical regulations] start next week and we will arrive at a technical specification that we think offers the best racing and is cost effective, ” said Brawn. “Things start next week and we will start to put some more detail to the proposal.”

We are in a phoney war period now. There will be claims and rumours swirling around as each side looks to exploit the other’s weak points. Rumours of Mosley dropping the legal action against FOTA came out of an interview he did on Sky Italia yesterday. (Ferrari is certainly not dropping its arbitration against the FIA in Lausanne, which started last Monday).

Picture 34
One name which I have not heard mentioned recently in connection with all of this is Ron Dennis. He was removed from McLaren’s racing operation following the stewards’ incident at Melbourne and is now driving everyone crazy at McLaren cars. But as a 15 % shareholder of McLaren F1 team and a man who put in a lot of ground work on both the GPMA (manufacturer’s threatened breakaway in 2004) and FOTA, he will be monitoring this situation carefully and will be itching to get involved.

One senior figure at Ferrari said to me recently that he regretted that Dennis was not around any more as he contributed a lot to the cause. That tells you how much times have changed.

His involvement would enflame the situation as far as Mosley is concerned, so he may well be laying low, monitoring the situation until such time as intervention is appropriate. If a solution is found with FIA and FOM then it may never happen. But as a major shareholder in the team he will be involved in board meetings to discuss McLaren’s role in FOTA anyway and providing a guiding hand behind the scenes. Martin Whitmarsh has led McLaren well through this process, but it will not have escaped anyone’s attention that the race team is failing at the moment and he needs to concentrate on that.

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FIA president Max Mosley said today that he was ready to start negotiations with FOTA to try to get F1 back on track after the teams opted to start a breakaway series.

“We are talking to people all the time,” he told BBC’s F1 programme. “It will all be back to normal, it’s just a question of when. We are very close. What divides us and the teams is minimal and really is something we could sit down and iron out very quickly.”

Mosley was very active with the media in the run up to the race. He was clarifying comments made yesterday by Bernie Ecclestone yesterday that if the teams signed up for five years the budget cap idea would go out of the window. Mosley said that what Bernie meant to say was that if the manufacturers, not the teams, sign up for five years then the budget cap idea will be dropped.

This is their way of putting the manufacturers on the spot, getting them to commit, implying that they doubt the manufacturers’ long term commitment, which

The FOTA team principals I spoke to said that there hadn’t been much talking since Friday and that they feel they have the upper hand now and the FIA is ‘backtracking’. It’s still quite finely balanced and it will be interesting to see if anything happens on Wednesday at the world council meeting.

The commercial people in F1, the sponsors and TV execs all say that they desperately want a solution to this quickly. So too do the new teams because it is hard enough to put a new team together and raise money, without doing so with instability all around.

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There is a fantastic atmosphere here at Silverstone today, with over 100,000 people looking forward to a great day’s racing. We had 85,000 here on Friday, which is more than most Grands Prix get on raceday.

Bernie Ecclestone’s comments yesterday that we will be back at Silverstone next year if Donington isn’t ready have been well received by the F1 fraternity and the public and it has given some reassurance in a weekend of instability.

The weather is not as warm as predicted, it’s currently only 15 degrees, which is not going to help Jenson Button very much. He needs the track to be warmer to get the tyres working properly on his Brawn Mercedes car.

The crowd knows that Button is up against it today. Vettel and Red Bull are in such a strong position. That said, there is a 50% chance of a safety car here, based on the last 6 years, so if we were to get one of those at the wrong time it might make things interesting and give Button a chance to get on the podium. I think that is his best hope today.

Media scrum waits for Mosley

Media scrum waits for Mosley

The paddock is abuzz, as it has been all weekend. Mid morning Max Mosley arrived in a Mercedes van with Bernie Ecclestone. Notwithstanding Max calling the FOTA breakaway members ‘loonies’, the pair have been engaged in a lot of behind the scenes dialogue with the teams to try to find a solution.

Mosley is convinced that Flavio Briatore wants to become the Bernie of the new series. Time will tell. It’s probably not going to be sorted quickly, although the sponsors and TV companies desperately want it to be. I notice that the Director General of the BBC, Mark Thompson is here today, casting an eye over his corporation’s huge investment.

Personally I still believe that the key to it is Ferrari’s contract with the FIA and FOM. That is being looked at in a civil court in Switzerland at the moment. If it decides that Ferrari are free agents then a deal will surely be done.

FOTA is serious about a breakaway, but they would prefer to race in F1 if they can get the right circumstances.

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