“F1 can survive without Ferrari” says Mosley

Yesterday I met with Max Mosley for a long interview which is in today’s Financial Times.

He was in London briefly following this week’s world motor sport council meeting where the £40 million budget cap was voted through.

I posted yesterday on the letters exchanged between him and Luca Di Montezemolo Ferrari president. Ferrari are very angry about the budget cap plans and the ‘two tier’ system which might see two classes of car racing in F1 next year. Montezemolo’s letter hints at a possible legal challenge to the plans.

I asked Mosley whether F1 could survive without Ferrari.

“It could,” he said. “It would be very sad to lose them. They’ve been in the sport since the start, but if it’s a choice between that and a situation doomed to failure and which would collapse F1 …  We are not going to bend over backwards to keep them.”

Mosley described the budget cap move as “by far the biggest development in my time in the sport”.

He is confident though that this is a time for action, not for wait and see, as the economy struggles to recover from global recession and cars companies are losing £1 billion a month. But he accepts that it might go wrong and that this summer could see a damaging stand off between some teams and the FIA.

“If you are trying to make big changes things can go wrong,” said Mosley. “We may have a very damaging conflict, it’s possible, but we are prepared for that. We’d tough it out. We’ve got very little room to negotiate, but the message I’m getting from the board of two or three of the manufacturers is that if you can keep us in F1 so that the cheque we write is not more than €25 million, you can consider this a pretty permanent arrangement.”

In recent years the manufacturer-backed teams, like Honda, BMW, Toyota Mercedes and Renault have fuelled an arms race of costs, but the boards of those car companies take a different view, according to Mosley, especially now that the economic picture has deteriorated.

“We have contacts with the boards other than through the teams. The teams spin to the board. The CEO hasn’t got the time, knowledge or expertise to question it. But now because they are all [short of money] to throw away tens of millions on F1 is not acceptable.

“I hope and think that when a team goes to its board and says, ‘I want to go to war with the FIA, because I want to be able to spend £100 million more than the FIA want me to spend, then the board will say ‘Why can’t you spend £40 million if the other teams can do it?’ ”

Mosley believes that Formula 1 has “gone down the wrong track”, with the emphasis on endless costly developments, rather than genuine innovation.. He believes that the budget cap reverses that trend.

“The cleverest team is going to win, not the richest. It’s manifestly fair because it litterally is the one who makes the best invention who will succeed, Invention is cheap, it’s refinement that is expensive and F1 is now refinement orientated. It’s probably our fault for allowing rules to develop in such a way that refinement is the means of progress rather than invention.“

* Tomorrow I will post the second half of the interview, with some interesting observations from Mosley on Ron Dennis, an explanation of how the cap will be policed and thoughts on how long it will stay in F1.

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Mosley’s response to Montezemolo

In response to the letter Ferrari president Luca di Montezemolo wrote on April 28th to the FIA president expressing concern about having two classes of F1 car and about a possible legal challenge to the budget cap, Max Mosley wrote back the following day.

He quotes FIAT boss Sergio Marchionne, with whom Montezemolo works closely and his belief that in an economic crisis such as we are in at the moment, only an extreme response will do,
“We are just going to slam the brakes on, cut everything back to essentials. It may be painful, it may be ugly. But if we want to do the right thing for this industry let’s do it now. Today my gut instinct is to be truly Draconian.” These are Marchionne’s words.

Mosley's letter to Ferrari

Mosley points out that the car industry is in serious difficulty and that F1, as an extension of it, is extremely vulnerable. Honda’s departure was a wake up call and another manufacturer could leave at any moment.

“If we are to reduce the risk of the Formula 1 world championship collapsing, we have to allow new teams in. We also have to reduce costs drastically. The matter is therefore extremely urgent.”

Responding to Montezemolo’s legal threat over rights that have not been respected Mosley writes,
“The only radical elements are those needed to close the gap that would otherwise exist between a low-budget team and other competitors. Thus if Ferrari chooses to continue with an unrestricted budget, the new regulations will not deprive Ferrari of any rights…I do not accept that these proposed regulation compromise any commitment that has been given to Ferrari in the past, unless Ferrari would somehow argue that it is entitled to prevent new competitors from emerging at a time when the sport itself is in danger.”

He ends with a flourish, “We are confident (as are our accountants and lawyers) that a budget cap will be enforceable. The cleverest team will win and we would eliminate the need for depressing restrictions on technology, which the existing teams are discussing with a view to reducing costs. I hope Ferrari will take the lead in agreeing the cost cap mechanism, thus freeing its engineers to work and preserving its shareholders’ money.”

Mosley has always wanted three things; to see the playing field levelled so small teams can compete with big teams, to have full grids and he has always felt that the costs were out of control, long before the credit crunch hit the global economy.

What he has done here, along with his technical strategy guru Tony Purnell, is to take advantage of the car industry’s troubles to create a window for killing those three birds with one stone. The two class F1 is not ideal for anyone, but Mosley is calculating that no manufacturer will go for the uncapped option it because it would be unjustifiable to shareholders.

Meanwhile the five independent teams, Williams, Red Bull, Toro Rosso, Brawn and Force India all welcome the budget cap at the £40 million level because to them it means survival, profit and the chance to compete against the big boys. It’s Christmas for them.

The teams formed their association, FOTA, to represent their rights, but here FOTA is in big trouble because the five independents are on a collision course with the manufacturers, so Max has also achieved a fourth aim, to undermine FOTA.

Many people dislike his methods, but think about it this way, if F1 didn’t exist and you were Ferrari or any other manufacturer and someone came to you and said, “I’ve got a great idea for a racing series; we’ll have 17 races in key markets around the world, great TV package giving your brand a media value in the hundreds of millions per year and it will cost £40 million and it capped, so you can innovate within that figure and beat the others.”

I’m sure if you started with a clean sheet of paper, in other words, you might well go for it on that basis. But it’s hard to see the Mosley/Purnell vision for F1 because we come from an era of £200 million budgets. But why does it need to cost £200 million to win?

Shouldn’t Ferrari continue to win races? If you have something very good and you distill it to its core strengths, you end up with something sensational. So surely the 350 best people at Ferrari must be the equal or better of the 350 at any of the other teams?

One of my readers, Martin Samm, made this very valid point today,
“What I (as a member of Joe Public) want is a series of interesting/exciting races – I dont care if they spent 40 million or 200 million, as I’m sure they’ll be as cutting edge as ever regardless; engineers tend to be cunning like that!”

Martin also points out this is all happening at a time when races are being won by two independent teams, Brawn and Red Bull. Most people find this very refreshing and a good thing for F1.

It’s really hard to know which way to go on this one, because it represents a huge cultural shift in F1. You can see Ferrari’s point and they believe that they have right – and the law – on their side.

The way is clear for a summer of messy legal challenges, which would throw 2010 into chaos. Ferrari will not go quietly on this one and they have gathered the other manufacturers around them for a council of war. They make the engines, of course, so the independents are dependent on them.

That is why Cosworth is sitting on the sidelines, waiting.

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Letter from Montezemolo to Mosley

Although Ferrari is refusing to comment on yesterday’s budget cap announcement, some letters between its president Luca di Montezemolo and FIA president Max Mosley have come to light.

These show Ferrari’s concerns and hint at arrangements between Ferrari and the governing body, which Ferrari feel have not been honoured.

Montezemolo ; Legal challenge to cost cap?

On April 28th Montezemolo wrote to Mosley and other world council members,
unhappy that budget caps had been put on the agenda of a meeting which was called to hear the McLaren case.

He wrote, ” I have always been concerned about its introduction (cost cap) mainly because I consider that there are serious technical difficulties in making sure that any cap can realistically be monitored.

“There are..doubts as to whether or not two categories of teams should be created which will inevitably mean that one category will have an advantage over the other and that the championship will be fundamentally unfaor and perhaps even biased. In any event this would create confusion in the public’s mind, which would seriously lower the value of Formula 1.”

This is a view shared by all the F1 teams, that having capped and uncapped teams operating to two different sets of rules is unworkable. FOTA will discuss this at its May 6th meeting.

But Montezemolo then goes on to remind Mosley about the deal, which he signed in 2005 to commit Ferrari to F1 until 2012, the one which broke the idea of a manufacturers’ breakaway series and for which Ferrari allegedly received €100 million.

Montezemolo’s point is that under the Concorde Agreement the FIA “cannot pass or amend any regulation without it being approved by the F1 commission.”

When Ferrari did its secret deal and signed up to 2012, it demanded and was granted “all rights under the previous Concorde Agreement will continue to apply until 31 December 2010, exactly as if the Agreement itself remained in place.”

The language then gets quite legal, and Montezemolo says he ‘insists’ that the FIA respect the agreement they made.

Presumably this is a coded message that Ferrari would launch a legal challenge against the cost cap. The problem there is time. It would take months and that would delay the 2010 rules being published, which would throw the series into chaos.

Ferrari would only launch an action like that with FOTA backing, but that will be hard because half of the teams in FOTA agree with the cost cap, which guarantees not just their survival but that they will be able to compete with the big boys and make a profit at the same time!

I’ll post on Mosley’s response separately.

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Flavio goes for it…big time

A furious Flavio Briatore continues to rage about the unfairness of Formula 1.

After some savage comments in Melbourne about the integrity of Ross Brawn, his former technical director, the Renault boss has now laid into the FIA and the drivers currently at the front of the field. He claims that a pecking order of Brawn, WIlliams and Toyota shows that F1 has lost all its credibility,

“The drivers in our teams are all world champions and instead there’s a driver who’s a semi-pensioner and another, a decent bloke, but he’s a kerbstone, fighting for the world championship. (A reference to Barrichello and Button respectively). I don’t know how we can say we have credibiity.”

“It’s impossible to make up the ground to those teams. In three or four races the championship will be decided and I can’t see the interest for spectators to watch a Grand Prix, when Button has 60 points and Nakajima has 50. Better to listen to radio or go and do something else.”

Briatore has won four world championships, two with Schumacher in the Benetton days and two with Alonso in the Renault days. In none of those seasons did his team have the kind of advantage that Brawn now enjoys, it was always very tight with Williams, McLaren and Ferrari. Although the mass damper on Alonso’s Renault, before it was banned, gave Renault something the others didn’t have, it did not put them well clear of the opposition, as Brawn is today.

Briatore’s outbursts have confused some of his fellow team principals. He is part of FOTA, indeed he heads the commercial working group, and yet in recent weeks his outbursts against other teams have made it look as though the spirit of FOTA unity now lies in shreds.

A close friend of Bernie Ecclestone, the pair are usually seen together most evenings at Grands Prix. Asked about Briatore’s comments this afternoon, Ecclestone said, “Everyone is entitled to their opinion.”

Flavio also sets his sights on the FIA for allowing a situation to develop which goes competely against the notion of cost saving.

“At a time when we are talking about bringing down budgets to £30 million a year, we have spent £15m on KERS and and other £10m on diffusers. So that leaves five more for travel and paying the employees!”

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Why Gascoyne will be a hit on BBC F1

Mike Gascoyne is back in an F1 paddock for the first time since he was dropped by Force India at the end of last season.

Gascoyne is working for the BBC this weekend in place of his former boss Eddie Jordan. Gascoyne has had a stop start career in recent years, sitting out after being dropped by Toyota at the start of 2006 until being picked up by Spyker in 2007 shortly before it was sold to Vijay Mallya and became Force India. He bought a large yacht in 2006 and did some fairly ambitious single-handed sailing voyages, but you could tell that he was desperate to go racing again.

Although an engineering manager and co-ordinator in the manner of Ross Brawn and  a fierce one at that, Gascoyne is keen to get back into F1 and says that he would accept a role similar to the one Frank Dernie has at Toyota, where he is not the top dog, but is able to lend his experience and insights to the team.

Given that his particular area of expertise is aerodynamics and he has a great track record in sorting out cars which do not have enough downforce, he may well find a team making him an offer as they battle to come to accommodate the double decker diffuser into their designs.

“There are new regulations, and there are some teams struggling with the new aero rules which is an area where I have done very well in the past,” he is telling people in the paddock.

I’m sure Gascoyne will be a real hit with viewers this weekend. I encouraged him to help out on ITV with insights from the pit wall in recent years and he relished the task and added some great material to the show. Quite often he was making big strategy calls which he would tell us about and then we could see the effect of them in the race. It made for brilliant TV. The wet German GP of 2007 was the classic where his driver Winklehock, was 30 seconds ahead of the field early on because of a Gazza call to pit him for wet tyres early.

He is a great communicator and I’m sure he’ll add a lot to viewers’ understanding of what is going on. 

Although his BBC stand in role has been planned for months, the timing couldn’t be better as the team has the unenviable task this weekend of explaining the diffuser decision and it’s ramifications and Gazza is just the man to sum it up in layman’s terms.

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Bernie signs new F1 music deal

F1’s commercial rights holder Bernie Ecclestone isn’t here in Australia, he’s back in London doing deals.

One which broke cover this weekend was a deal he’s been working on for ages with Universal Music group, the biggest recorded music outfit in the world. They own dozens of the labels you grew up with like Polydor, Decca and A&M.

According to a joint statement the concept is called “F1 Rocks” and it is a series of multi-artist live music events from the Grands Prix. That part isn’t new, after all the Who are playing here tomorrow night and good old Status Quo have been getting repetitive strain injury at Silverstone for years.

What is new is the blending in of ‘stars of movies, sport and fashion’ with the rockers and the racers. The whole thing will be packaged into a digital content stream which fans can enjoy around the world.

The deal makes a lot of sense on both sides. F1 is desperate to get more ‘celebs’ to the races, bizarrely that kind of glamour is thin on the ground. Remember the hoopla when the Beckhams came to Silverstone with Honda, well they want that kind of buzz and energy all the time and this is the latest idea on how to achieve that. TV networks expect to see stars and glamour associated with F1 and it hasn’t really delivered on that in recent years.

And for Universal the attraction is clear. The only way to make money in music these days is live events and this will add a new revenue stream for the artists on Universal’s books.

Its shows how the web is changing F1 and the expectation of what is possible. Bernie has always been very suspicious of the internet, because he thinks it’s really hard to protect his rights in such and unregulated free-for-all. But this deal will, I’m sure, be the first of many as F1 looks to open up new revenue streams and drag its business model into the 21st century.

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Three commanding presences

An exhilarating hour spent in the pit lane during the first practice session. Strangely unfamiliar for me as it’s three years since I was last down there, having had to yield my pit lane pass to Steve Rider back in 2006. I used to live in the pits, back in the day, knew every nook and cranny, had eyes in the back of my head for cars coming in, going out, mechanics rushing. It takes me 20 minutes to get used to the rush and the energy.

I quickly get used to it again. The energy is always astonishing. You can feel the drivers who are on it, Massa is very aggressive straight away, Raikkonen looks committed.

The Red Bull mechanics were under pressure. Vettel stopped out on the track early on and they were unscrewing the floor of Webber’s car as I left the pit lane.

But what really caught my eye was three commanding presences in the pit garages.

At McLaren, Ron Dennis dressed in black, standing on his own in the middle of the garage. The mechanics move around him, respectfully, leaving a wide space around him. He looks very serious, has his aggressive face on. No longer the team principal maybe, no longer central to activities on the pit wall, but still a huge presence in the garage.

Next door at Ferrari an equally serious looking Michael Schumacher. An adversary of Dennis for many years, now a fringe player in a way, as a consultant to Ferrari, but they’ve built his part up a bit this weekend. With the switch to slick tyres and other new rules his eye and judgement are valued. He’s taking the role seriously, moving across the garage to inspect Raikkonen’s rear tyres when the car comes in from a run. He studies, them, runs his finger across the ruts and blisters. A young Bridgestone engineer, prodding his temperature guage into the tyre finds a stony faced seven time world champion grilling him about the tyre. Schumacher, like Dennis, is a competitor. No longer directly competing, maybe, but still engaged, committed.

Down the other end of the pit lane is the Brawn garage. The decoration is sparse, no frills, the cars sponsorless for the moment. If you didn’t know better you’d think you were looking at the Minardi of today. But these guys are the team to beat this season. And the reason is Ross Brawn, Schumacher’s old ally from Ferrari. His name is above the door, he’s more engaged than he’s ever been and he’s been smarter than everyone else in preparing for this year. Or is that craftier? Actually it’s both. Brawn cuts a massive figure on the pit wall, a radio on each hip, his face impassive.

Some work on the footwell of Button’s car is taking longer than expected, Brawn comes off the pit wall to inspect the work. The mechanics are aware of his presence, but not intimidated by it. Unlike his old colleague Schumacher and his rival Dennis, Brawn is competing directly, he’s at the heart of what is happening.

Three huge characters, authors of much of the sport’s recent history, competing in their different ways on day one of a new Formula 1 season

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Irvine world champion under FOTA points plan

Here we go again. Another round of ‘what ifs’, this time based on the proposal put forward by FOTA for revising the points system this season. They suggest that the winner should be receive greater reward (12 points) and that the podium finishers should gain more relative to the rest.

So the mathematicians have been working out what different championship outcomes we might havd had in the past if this system had been in place.

The biggest difference is that Eddie Irvine would have won the title in 1999 and Damon Hill would be a double champion, with victory in 1994 as well as 1996.

Felipe Massa would be the defending champion this season.

The feedback so far seems to have been reasonably positive. I think there is a general feeling that the driver who wins the most races should be the champion and most fans seem to welcome a plan which rewards going for the win.

The FIA will vote on this proposal on March 17th at its world council, which promises to be quite an event, with all the stuff FOTA put forward this week up for approval as well as whatever Max Mosley has up his sleeve.

There are some suggestions that budget caps are still being put forward within FIA circles as a possibility and these may well be up for a vote on the 17th too.

Many F1 teams, including Ferrari, do not like the idea of budget caps.

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Lunch with Max Mosley…a busy year ahead

Today I went along to a lunch thrown by Max Mosley for a small group of journalists at the Poissonerie de l’Avenue, in South Kensington, London.

The talk was, predictably, about the need for urgent cost cuts, the medals system, prospects for the season ahead, the future of the British Grand Prix, evidence of who set him up in last year’s sex scandal and his own future.

On this last point I got the clear impression that he intends to stay on for another term. He has to make his decision by June and as he explained, they have a complicated system whereby prospective candidates have to draw up a list of people for the key jobs. This is a system he initiated in 2005 as it would give him early warning of anyone plotting to stand against him. Wily old fox.

Anyway as he talked about it and was saying that he wasn’t sure whether he wanted to do it all again, he made it clear that all the key people want him to run for another term.

I would have thought that he is most unlikely to walk away from the job now as the next three years are absolutely critical to the future of F1, with the Formula One Teams Association providing a strong united front for the first time ever and Bernie Ecclestone and CVC very anxious to get everyone signed up beyond 2012 to protect their income stream.

Mosley: In 2010 costs will really come down

He looked very fit and full of energy, much more so than at times last year. He’s going deaf, though and clearly had problems hearing some of the questions. He wasn’t playing for thinking time by asking for a repeat, he was genuinely straining to hear. As always he was bitingly sardonic in some of his answers and particularly scathing about the stories put about last week that former RBS chief exec Sir Fred Goodwin might stand for FIA president this summer.

On cost cutting and the rules for 2010, he was very firm. He said the target is to get budget right down, as I wrote in my posting on Honda this morning, to around £50 million. He added that it is regrettable that people will have to lose their jobs in that process, but F1 teams are not in the social service business, employing people for the sake of it. To get budgets down from £300 million to under £100 million cannot be achieved by continuing to employ 1000 people in a team.

He wants to see costs come down so much that a team can run for £50 million and be competitive. He feels that the boards of the main car companies are keen to see costs brought down dramatically and that it needs the FIA to do this because the people who manage the teams on behalf of the manufacturers would not go far enough fast enough.

What he did not say, but I have gleaned privately, is that the FIA has a package to present to FOTA of areas of non-compete, which are very extensive, along the lines I wrote about in my Honda story this morning. Ideally the FIA would like FOTA’s agreement on this package, but they do have the option of ramming it through the world council in March or June under the force majeur rule – in other words arguing that the situation is so desperate in the motor industry that these measures must be taken now or else the whole survival of F1 will be threatened. That will be a major flash point with FOTA.

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Nigel Stepney breaks cover

No sooner did I mention in a post earlier today that Nigel Stepney, former chief mechanic at Ferrari and the man behind the McLaren/Ferrari spy scandal of 2007, was working for an engineering firm in Essex, but a picture of him pops up in a media mail out by Superleague Formula, the racing series based on football teams.

As you can see, Nigel (on right) is working for Gigawave, who supply on board cameras to the series. The Superleague media people are having a bit of a laugh here because the photo above is prominent in their mail out, but is not captioned! And nowhere does it mention Stepney’s name.

Or maybe they don’t know..

Does this count as working in motor sport?

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