Ferrari has lost its legal challenge against the FIA in the Paris courts.
The team had been laying the ground for the legal challenge for a while and had set great store by the outcome. Now the legal route is closed to them, they will have to try to persuade as many teams as they can to stick with them and not put in an entry for the 2010 championship by next week’s deadline of May 29th. The dreaded word ‘breakaway’ will be on the agenda.
Although Ferrari felt they had a strong case in Paris, the FIA were more confident. Courts tend to go with governing bodies in disputes like this, and the FIA carries quite a lot of weight in a French court room. The court noted that Ferrari had the right of veto as a member of the world council, but did not exercise it on April 29th when the rules were voted through.
Reaction from the FIA has been swift in coming,
“No competitor should place their interests above those of the sport in which they compete, ” read a statement. “The FIA, the teams and our commercial partners will now continue to work to ensure the wellbeing of Formula One in 2010 and beyond.”
The team bosses are meeting under the umbrella of FOTA, (Formula One Teams Association) on Friday, which is a rest day in Monaco. This promises to be a highly charged affair with so much at stake. Ferrari, Toyota, Renault and Red Bull have said that they will not enter the 2010 championships unless the rules are adapted. There is little over a week to rescue the situation and give everyone a win of some kind.
Bernie Ecclestone has already laid the ground for the post-lawsuit negotiation by saying that the idea of having a two tier F1 has been scrapped.
Now efforts will focus on adapting what the FIA has put on the table into a form which gives the dissenters a chance to say, “The rules have been changed to our satisfaction, we will enter,” while still holding true to what Max Mosley and some of the teams were aiming at, which is reducing the costs to a ‘sustainable’ level for all parties.
The FIA and it’s supporters among teams will want to move quickly now to finalise the rules for 2010 so that the new teams know what they are aiming at and can get their entries in next week. The implication I got from Mosley when I last spoke to him on this was that the existing teams would have an entry guaranteed (provided they enter by the deadline) and that the remaining three places will be given to the three teams who demonstrate that they have sufficient financial backing to do F1 properly and the technical back up and resources. But if any of the existing teams do not make an entry by next Friday, they may find another team in their space.
Today comes news that there are several other teams interested in placing an entry for 2010, including Campos Racing, alongside others who have made their intentions clear like Lola and F3 team Litespeed, which has teamed up with F1 engineer Mike Gascoyne. Knowing Mike I would be surprised if he has signed up to lend his name without seeing proof of financial backing.
In this climate it will very hard for all the potential new teams to raise funds. £40 million is the operating budget to design, build and race a car for one season, not including engines, drivers and marketing. It will cost at least that much again to set up an F1 facility. Raising debt finance to do that is virtually impossible in this market, according to one financier I spoke to recently. It would have to come from wealthy backers, like Peter Windsor’s US team or a sponsor, which again would be very hard to find.
A deal will be struck between the FIA and the teams including Ferrari. No doubt they will try to stick to the £40 million budget, but there will be latitude given in the dropping of the second tier of racing, the nature of the accountancy/checking process and the details of what is included in the cap. The engines may well stay out of the cap for longer than the one year originally proposed, the drivers salaries too.
But Ferrari’s position in the negotiations is probably not quite as strong now, coming into them as a losing litigant compared with where it would have stood had it gone directly to negotiation.
They still have the ultimate sanction at their disposal, which is to leave F1. I still think this would hurt F1 more than it would hurt Ferrari, but perhaps only in the short to medium term.
And for a guide to the importance of Ferrari to Ecclestone and the FIA, you need only consider the implications of this veto, over which the court case was fought. The team was so important to Mosley and Ecclestone in 2005 that they were prepared to give one team special powers and rights, which were denied to others. How much has the business case changed, on which that decision was based? And how far has the attitude behind it changed?
And will the other teams now seek to have those special rights removed in the interests of sporting competition, to ‘level the playing field’ ? The FIA argued in the court case that the veto was no longer valid because Ferrari had joined FOTA.
We are about to find out in the next week and what comes out the other end will be the new Formula 1.