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.
Are Ferrari 12 now races away from the end of their F1 career?
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.
allenonf1.wordpress.com 
Thanks James,
Once more a far more detailed and knowing analysis than any other site reporting the news. I don’t like Ferrari very much, but the thought of not having them there to be beaten fills me with horror. I note that you don’t even consider the possibility of a breakaway championship series .. do you think that is at a all a possibility?
Stupid stupid stupid FIA. People want to see Ferrari, Renault, BMW and so on. Not USGP1, iSport, Formtech or whatever.
I used to like Max Mosley. But I am really discouraged and dissappointed by all this. What ever good can come of going cold turkey on the big teams? From 400 mill to 40? It makes no sense.
Boo hiss to the FIA. Dont they understand that they are in the process of making F1 something else than what the fans love? I really really hate this.
I take your point, but in years past people wanted to see Tyrell, LEC, Footwork, March, Hesketh, Vanwall etc.
It’s not the version of the sport which will be able to pay off the huge CVC loans, of course, but it is no less entertaining for it.
Do you watch F1 for the colour of the car or for the racing?
It is not the case now Colin… those were good old days…
Let me state a simple example, when a kid grows up or goes to school and becomes an engineer or doctor.. he always has this ambition to work for the best company…. Lets say an IT company like Google or Cisco, they do not dream of working for a third graded company which will come and go…. This simple thing applies all the areas of life and we as fans get attached to something we follow more keenly……
I do agree f1 is more about racing but there are some companies who are history and they deserve that extra benefit… just to have 3 extra teams, how can someone just kill a sport??
Now drivers are starting to say that they will also leave if the big manufacturers… What next?? how can someone be so adamant and be a dictator? I think it is right time for FOTA to push ahead and teach a lesson to the so called “dictator – max”.
Looks like this will be my final year of following the sport that I love…..
Do they?
I want to see great racing from racers, dont care what they are called.
Teams leaving or creating a breakaway competition in an established sport is never a good thing. Fans and owners all know this and so I guess that’s why negotiation discussions will start almost immediately. Ferrari don’t need F1 but the same cannot be said for the reverse. Ferrari are a giant and what they “suggest” to the other teams could persuade them to not lodge their applications. What should have been a wonderful Monaco race weekend is now charged with anything but glamour.
I don’t understand Max Mosley. He keeps on saying things like ‘we have to finalise the rules’ and ‘keep costs down’ so new teams can enter.
Is it really worth losing Ferrari or Toyota or any of the existing teams so that they can be replaced by Campos or Litespeed?
[moderated]
Yes.
Listen very carefully to me Max, I’m the one that pays for you to play god. I go to at least one race a year, I never miss a session on TV, I buy F1 merchandise. Ok, I don’t actually support the sport single handed, but it’s the millions of “Me’s” that do. We’re the ones who hate the politics, we’re the ones that want to see the fastest cars in the world racing wheel to wheel. We’d like over taking, but as long as it’s fast and close, we’ll live with it.
I’ll be at hungary this year, but it will be the first year I won’t be wearing any merchandise. I won’t be wearing it, because I won’t buy it, it’s the only way I can protest. I’ll watch this season out, because I love this sport, as it is now. I’ll be watching Touring cars next year, because I don’t want to be part of a sport that is run Iron Fisted by the likes of Mad Max. I truly am sorry, but enough is enough. he goes, or I do, that’s the end of it now.
Oh and by the way, I’m not a Ferarri fan and never have been, but I can’t get my head around this could be the last time I see that marque tearing around the streets of monaco, I really can’t.
I hope this is a step towards a FOTA breakaway series.
Bad PR move badmouthing the new teams, but they are right. Id rather watch GP2 than no name teams and no name drivers masquerading as F1.
Ferrari would be better off putting their efforts into their cars and races.
If they don’t want to play they should go.
F1 will be better off with just only mechanical whining.
You’re kidding, they had the veto but did not use it when the rules were voted on. We had assumed it was done behind their backs, this changes things considerably and makes Ferrari look idiots.
Bernie has just paid up over £300M to the latest owners of part of the debt he raised to buy the F1 rights (the debt had been sold on a couple of times and then called in) plus the half of his fortune paid to his ex wife recently, taken together he must be feeling a little short of ready cash, so of course he will do anything now to preserve his major income source. Now would be a good time for the teams to re-negotiate their share of the tv and circuit money.
It’s kind of nice to see Ferrari lose their court case. Ferrari is good for F1, but I think their attitude is that they as a company are better than F1.
It seems to me that they’re not interested in a level playing field. In theory, as the prestigious team that Ferrari are, they would be able to lure the best minds to their team anyways. So while the cap is equal, you would still expect Ferrari and McLaren to be top teams.
Perhaps Ferrari see things the opposite way. Maybe they think a level playing field means that someone else might just be better than them. Maybe you could even see a Ferrari at the back of the grid. Now that would be damaging to their prestige!
I think Ferrari should really just go for it. If they can win a championship in budget cap conditions then that’s going to really send a strong message to everyone who follows F1: Everyone is working with the same amount of money and regulations and Ferrari was still the best.
LETS JUST GET BACK TO RED BLOODED RACING – I REALLY MISS THE OLD DAYS…
Hopefully Ferrari will stick to their guns.
Atleast i’ll get to see the Prancing horse in action live 2 times this year, Nurburgring, and the Season Ender here in Abu Dhabi.
Is Max so far forward looking that the rest of us cannot see the future yet. An amazing man Max.
This would all be so much easier if he would tell us all the “real” reason for creating such a sh*t storm.
Why is the sport not run as a proper business? I keep reading how F1 is only a sport for two hours on Sunday.
Is F1 really going to move forward to become a stronger brand, a bigger sport with more dollars pouring in by loosing Ferrari, Mercedes, BMW etal.
Max must see the sport in a NASCAR sort of view “bog standard vehicles with big driver names” as the way to move the sport to greater heights. Same parts in most of the cars, just different body panels.
How else could he think going from a $250 – $400 M per season teams down to $40 M ++ teams in one off season is anything but insane.
I think most would agree, including the teams, costs need to be contained but no company can just toss hundreds of millions of dollars off the budget in an off season.
Why are these new teams so important? What happens when VW/Porsche or one of the emerging car companies wants in in 2011 “oh sorry you missed the golden 2009 deadline” you don’t get in.
I think Max sees a world we do not and he will have his way no matter what kaos it creates.
He needs to be removed.
So basically we are swapping car manufacturers for millionaires who think F1 is fun?!? Nice move there Max. Not!
And what would happen to all the drivers of BMW, Renault, Ferrari, Toyota and the 2 Red Bull teams?!? Can you see Alonso driving for Litespeed?!? Kimi pulling his weight while driving for Epsilon Ehwhatsitsname?!? Massa in a Lola?!? Sad to see this mess.
Might end up having to watch GP2 for my racing fix then. If only I could watch that of course – because this year someone moved that to some obscure give-me-more-money satelite channel as well… thanks Bernie!
Does a new entrant still have to lodge a bond with the FIA (GBP40million if I recall correctly), which is then paid back to them after 2 years?
Anyway, I digress…
I must say that whilst I am a Ferrari fan, I am an F1 fan first. To this end I disagree with the FIA that Ferrari have put their interests before that of the sport.
Indeed I feel it is quite the opposite. Ferrari are trying to keep the sanctity of F1 intact, and not let it come down to the level of the lowest common denominator.
Whilst I have nothing but respect for any motor racing organisation at any level, F1 shouldn’t be an ‘everyman’ sport. It should be exclusive, and it should be hard to attain.
Teams should have to move throught the ranks as drivers, engineers and designers do and earn a right to compete.
Yes, costs need to come down significantly, but not to a level playing field. The meritocracy of F1 should remain, those that can spend more should be able to – that’s a right of being successful across the entire organisation.
A cost cap is nothing short of sporting communism, plain and simple. If that floats your boat there are plenty of other straight-jacketed series to go and watch.
Just leave my sport alone.
IMHO, the current debacle can be traced to a flaw in the thinking that occurred after Max/FIA appeared to identify: “Hmm, crikey, F1 might be in a bit of trouble what with a mismatch between current budgets and general economic circumstances…could we end up with no teams because the costs look too high?”
On the face of it, this isn’t too shaby an insight and I don’t think it’s that too controversial for them to think that way. It must be that this is what they thought, otherwise why did they get involved at all?
The flaw, though, was that they thought (like so many misguided administrations…) intervention and control of the market was the key, rather than leaving it to the market to decide. Such flawed thinking pretty much always results in unintended consequences.
The market – the teams and manufacturers – were responding to this anyway (that’s because it was their own money that was being spent, funnily enough) by saying to themselves and each other, “Let’s find a way to spend less”.
It is self-evident that the FIA’s intervention hasn’t worked – it has not created the circumstances that it sought, that being (assuming that we can rely upon the FIA being rationale in all this) a healthy, competitive championship at the pinacle of world racing attracting the leading brands and competitors in the world.
Where do we go from here? Well, this has clearly got very little to do, now, with agreeing a solution to the economic principles of the sport, it’s about what Max enjoys most – position, power and control. So, the best politician(s) will win.
What a mess.
I’ll simply follow Ferrari with my money and tv time:) Who knows, perhaps they’ll find a series with tv-time not in the middle of saturdays and sundays during hot summer and prime beach time..
This whole thing is about power and money – that is obvious. Max wins anyway – if new teams come, they come on “his” terms and know right away “who is in charge”.
If Ferrari and all the rest of “old” teams give up and stay – from now on they know “who is the boss here”.
Max keeps control over F1 one way or the other. He loves fight as Berni once noticed and he knows he can not lose in this situation. Unless there are some others at FIA that can stop him – but it seems there are not.
In my personal opinion he is a man obssesed with power [moderated] – if he is not stopped and is able to continue with his control over this sport this will be my last season with F1. I do not want do watch any show that is in such hands.
Adam
Ok so Ferrari RedBull Toyota Renault BMW all leave there drivers go to such and such a team, then lots of engineers and other staff are left no where and who supplies engines to other teams…. Ferrari supplie engines to Torro Rosso who currently under RedBull but havent they got to buy there own rights and build there own car next year?? Renault supplie RedBull so no real loss as both are threatening to leave, Toyota supply Williams and thats a team who want to run under the buget cap and stay next year to my knowledge?
But yeah what im trying to say is if the Manufacturers go then we lose engine suppliers and viarous other components ie KERS. Can Cosworth and Mercedes supply the rest of the field?
So now we’re in the position we should have been in weeks ago if Ferrari hadn’t thrown their dolly out of the pram. Hopefully the teams can still negotiate a slightly higher cap or more items exempt, but I dont have much confidence.
On the subject of the cap, surely not all the teams need to go right up to it. Say they made the cap 60mil, the new teams could still come in at 40mil and be competetive surely?
An article published on the Times website with an interesting take on the Ferrari stance –
http://www.timesonline.co.uk/tol/sport/formula_1/article6313337.ece
So you and a few of your friends create a great product, set up a company and spens years maketing it, moudling it. You all spend trillions of dollars over many decades making this company and product into a world class product worth a fortune.. life is Rosy…
But then, a few other greedy people look at your company and say, ‘ I would like a piece of that cake! ‘ but the current shareholders say, ‘ Hmm how can you prove to us your quality, knowledge and experiencein this sector, and also to buy a share of our company it will cost you a lot) after all if you become an equal shareholder, you will want an equal share of ou profits, and i has taken us decades to create this level of profit.
The new greedy people realise they can’t meet these demands… they go to the chancellor ofthe exchequor and say, ‘ can’t you fiddle the rules to force the original owners to allow us to be shareholders?’ the chacellor winks, taps his nose, and says leave it with me….
The original owners, now find their original company is now de-valued, decades of work undermined….
The only re-course they have, pick themselves up, dust themselves off, and start all over again…
Good luck to them, their quality will see them through.
[…] Ferrari to rally teams’ support after losing in court – James Allen on F1 "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?" (tags: ferrari law fia FOTA BudgetCap 2010 maxmosley bernieecclestone) […]
I think FIA’s position on this is rather hypocritical. It has been the teams all along who have tried to bring the cost of F1 down all the time. FIA, on the other hand, with all their constant rule changes have forced the teams to spend more in order to adapt to new regulations. The last (and perhaps the best) example of this is KERS: many of the teams have spent millions to develop the technology and now it appears to be all for nothing since FIA would like to have a universal supplier for KERS for the next season (or at least so I heard). Add to that FIA going back and forth with tires (slicks or not, multiple suppliers or not), fueling, electronic aids etc. and it becomes easy to understand why teams are spending so much money: they have to keep on completely redesigning their cars all the time!
Teams do not want to spend money any more than they have to, that is why they have agreed on many cost cutting procedures among themselves. However, in the end it should be up to each team/business to decide how much money they can afford to spend to compete in F1. If FIA wants to keep the cost reasonable, then the regulations should be such that the teams don’t have to spend hundreds of millions of euros to succeed. An arbitrary budget limit is not the way to solve the issue.
I do not think Ferrari would act as strong as this if they did not have the backing of majority of the teams. The teams must have some worst case scenario planning in the last FOTA meeting.
I believe the people running the teams are more professional than Max and the FIA. They have studied this problem carefully and they have ready alternatives if the FIA stand firm on their ground.
Imagine F1 with non-car manufactures. We will have teams such as isport-cosworth, lola-cosworth and etc. A big value of F1 will be lost.
The manufacturers are likewise not stupid, they will not be in a racing series which they cannot afford to pay. FOTA has been working to ensure that the manufacturers remain. They have made their cost cutting suggestions and they even went to the extent of conducting surveys to know what the viewers want in F1, all of which were ignored by the FIA.
It seems to me that the FIA are acting recklessly in this matter which is of great importance. Arrogance and pride has now taken over.
A breakaway series will happen and the series with the more prestigious teams will be able to get the best drivers in the world and eventually will triumph. Meaning this is the end of F1.
I do not think having a competing series will have the same effect as what happened in america when CART and IRL split up because the Indyar series was not the premier racing series world wide. Moreover, nobody followed the teams with such a passion as F1.
Wherever this F1 teams race, and whatever this new series is called the fans will follow their team. After all the teams are the stars of the show.
What we need now is for the teams to stay united and start their own series which should be the new pinnacle of motorsport with a sanctioning body that is better organized than the FIA.
James I noticed you raised the point of finance for these teams.Max has said all along that the only reason for these changes is the perilous state the the manufacturer’s teams and the probability they will leave at any time.But what of the new teams 40mill is a huge amount especially when you dont have a large backer like a car manufacturer behind you isn’t it more realistic to assume that it could well be these new teams that fold when one of there sponsors leave,s after all that has been what has happened in the past.”History Repeating”
James, I read in an article and now for the life of me cant find it to link back to, that the FIA cant make these types of changes …
They can only change the rules if Safety is an issue and thus the reason the FOTA was formed, to deal with these rules and issues…
According to the article if all the teams say no then the FIA wouldnt have a leg to stand on ?
Would you be able to Confirm ?
Darren
“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.”
I quibble slightly with you here James. There is obviously some truth in what you say insomuch as there is a lot of money to be gained/lost on Ferrari’s involvement. I think the real aim of the 2005 agreement is the same as the budget-cap, the diffuser ruling and the two-tier system and that is to divide the teams.
I don’t think for one second Max or Bernie are concerned with “the interests of the sport” right now. It is all about self preservation and a united FOTA is a threat to their sovereign rule.
Article 2.2 of the tech regs and Appendix 5 of the sporting regs.
These seem to have been blatantly ignored by the FIA.
Darren, this might shed some light on it:
http://www.pitpass.com/fes_php/pitpass_news_item.php?fes_art_id=37912