This time last year chaos reigned in Formula One. The Caterham cars were not shipped directly back from Russia and there were accusations made that Colin Kolles and his janitor director of the company were stealing Caterham’s intellectual property with a view to starting a new F1 team Forza Rossa. The FIA had ‘scrutinised’ Kolles start up plans and he had been given the green light to go.
Asan aside, the staff at Caterham were not happy, and one reason was because since the promotion of the janitor, the toilet facilities had gone to pot (that is actually true). Caterham eventually collapsed along with Marussia, though a brief sojourn beyond the notion that ‘hope springs eternal’ saw a crowd funding mission, deliver one last hurrah for the green goddess F1 cars.
Force India were also in financial trouble as the 2014 season drew to a close. Their once billionaire owner began to realise his business empire had crumbled and he was about to be evicted as Chairman of Diageo – the company who had kindly bought his family spirits business. Diageo accused Mallya of fraudulent accounting prior to their acquisition of the spirit’s business. Oh and also Vijay was now wanted for tax fraud in India and his personal A320 aeroplane had been impounded.
Then top it all, we had threats from Lotus, Force India and Sauber that they would boycott of the US Grand Prix and the other remaining two races. They were demanding Bernie resolve the unfair distribution of cash amongst the teams and their threat was serious enough for both Ecclestone and CVC’s top dog, Donald McKenzie, to give some sort of verbal assurances that action would follow.
One year later and… chaos still reigns in Formula One. Red Bull say they have no engine for 2016, despite still having a legally binding contract with Renault for a 2016 engine, Sauber and Lotus are strapped for cash and the latter is being chased by the British government’s tax collection bureau and living on borrowed time awarded by a London court judge.
One thing has changed. Force India and Sauber have reported the sport of Formula One to the EU commission. Again the matters of reference are, illegal governance – the F1 strategy group is in breach of a previous EU ruling that states the sport’s regulatory body must be independent from any commercial influence. The contracts Ecclestone drew up with each team when the Concorde agreement collapsed are also under scrutiny for allegedly being anti-competitive and unfair.
During the Sochi weekend, Bob Fernley was questioned about Force India and Sauber’s formal complaint to the EU. The complaint has been a long time coming, and is clear evidence that certain teams backs are against the wall again and they have nothing to lose.
“If they do decide to investigate, I think it will be quite rapid that Formula One will feel the effects of the EU,” Fernley revealed. “We can’t stop it, that is absolutely correct. So there is no question of that.
“They’ve [CVC, Ecclestone, FIA] had a year to be able to make the right approaches, to be able to put something in position that had been promised if you like after the Austin Grand Prix. The only way it can work now is for CVC to be accountable to a body that has the power to be able to bring them to task.”
“I think 12 months of opportunity to correct things, or at least to be seen to be moving in the right direction, is more than enough time. And clearly that hasn’t happened and we need to refer it to a body that has the powers to look into it independently.”
The EU have previously investigated Formula One and made a direct and clear ruling on the sport’s governance and commercial bodies. If you wish to understand this historic position more, read TJ13’s article written last November. F1 and the EU article 82
What did happen to that crowd funding money? Did the people get that back?
It was all spent getting Caterham to Abu Dhabi, as I recall. Anything that was left, most surely would have been hovered up by the Administrators or (possibly) tipped into the tiny pot that was marked ‘creditors’.
The fastest way to improve the racing in F1 is to even out the financial distribution. It’s hard to imagine that Force India or Lotus wouldn’t be fighting for wins given comparable budgets and engines to the big teams. The collection of people that are the FI team, I believe, are the best TEAM in F1. Mercedes, Red Bull, Ferrari and McLaren. in a pure team sense, have a very poor speed out for dollars in ratio. Hopefully the EU can do something to level the financial playing field.
Of course, if the EU decides on fair money distribution Red Bull will probably quit anyhow, without all the extra development money they’d have to share wins with more teams.