Teams abandon F1 over cost cap if

horner-red-bull-f1 F1 teams get taken by the b..

udget!
Liberty has set out to prepare F1 for the future. They are working on a plan to move F1 to a more economically viable situation. History has shown us the coming period will be a fraught one.

Although organisers can define rules all by themselves. New rules haven’t always been readily accepted. Au contraire, organisers and contenders have a long history of hostilities. You could even define them as ‘Feindselig’ (German “Enemy-spirited” Well.. look it up)

Will Liberty’s plans be welcomed open-armed? Not when we look at history..

In 2009 the FIA and FOTA (Formula One Teams Association) had one of their latest “to do’s”. The confrontation was started by FIA’s proposed modifications to the rule books for the 2010 F1 season. The melee was outset over the introduction of a budget cap (!! as you may have noticed, this is one of El Jefe Maximo’s favourite subjects!!) and reached a climax just before the 2009 Silverstone race: FOTA teams released their intention to form their own championship, and break with FIA.

You might have guessed already that this dispute didn’t go from “intro new rules” to “we are going to start a new championship” in 2 days time..

2008 saw the dawn of new regulations: the biggest overhaul of the rules since.. well a long time 😉 Early 2009, Max Mosley (FIA President) put a plan forward which was intended to kick in in 2010. The plan outlined to secure F1 for years to come in the (then) current economic situation. (Remember 2007, subprime mortgage problems, leading to the collapse of Lehman Brothers bank and causing the largest recession since the Great Recession of the 1930’s).

The plan proposed a budget cap 30M Euro. It came with technical and design freedom to teams who wanted to accept the new cap. A separate set of rules for teams accepting a budget cap and another set for teams NOT accepting the proposed cap. An outline for war, it later proved.

Ferrari started its opposition of the new system with a court case, but they lost on technicalities (Ferrari failed to use their “veto” in one of the FIA meetings).

FOTA members BMW-Sauber, Brawn GP, Ferrari, Toro Rosso, Toyota, Red Bull and Renault announced their withdraw from the 2010 season simply by not entering cars. Big gun Bernie Ecclestone tried to find a compromise but failed.

FOTA teams met during the Monaco Grand Prix and threatened to leave the championship if the budget cap propositions weren’t taken out. Williams, however, didn’t follow suit with FOTA a couple of days later, when they confirmed their entry to next year’s FIA championship. Williams stated that they simply wanted to race, and didn’t want the insecurity of further negotiations. This later proved to be a break in the strikers’ unity, as Force India followed, virtually ending the FOTA alliance. Most teams followed suit, and the remaining teams FIA threatened to put in front of a judge, since FIA claimed they were contractually obliged to compete until 2012.

Part of the reason for the budget cap was that in 2010 FIA wanted to open the grid up for new teams. Multiple parties were interested (also because they saw a way of competing using mentioned cap) This saw the birth of 3 new teams: HRT (Hispania Racing Team) Virgin Racing (Manor) and Lotus Racing (Caterham). (“Hang in there, Manor!!”)

FIA announced its intentions to continue ahead with the budget cap, but raising it to 45M Euro. FOTA complaints were jump-started..

The British Grand Prix formed a new apex, when 8 FOTA teams wrote FIA that they wanted a renegotiation of the new Concorde Agreement and wanting to move deadlines as they were too short.

Max Mosley stepped in, stating his readiness to be flexible, but not wanting to move deadlines, since these were put in place make sure next year’s obligations were made.

FOTA responded with releasing their intent to start a breakaway series.

Legal and media battles ensued, teams even stating they no longer wanted to talk to FIA as long as Max Mosley was its president (repeat move which we already seen during the FISA-FOCA war?)

The conflict spiked at a meeting of the World Motorsport Council with FOTA agreeing to remain within the championship and FIA President Max Mosley agreeing not to stand for re-election in October. 24 hours later Mosley rescinded and wrote a letter to FOTA.

“Given your and FOTA’s attempt to mislead the media, I now consider my options open,” Mosley wrote. “At least until October, I am president of the FIA with the full authority of that office. After that it is the FIA member clubs, not you or FOTA, who will decide on the future leadership of the FIA.”

FOTA walked out of a FIA meeting concerning future rules. FIA hit back by informing FOTA that they were not officially entered for the 2010 season and therefore were excluded from regulatory negations.

At the German Grand Prix FOTA teams declared to want to end further discussions and contiune to negotiate the terms of a new Concorde Agreement directly with CVC (commercial right holder, thereby bypassing FIA) Bernie Ecclestone simply added he had an interest in CVC and that he would be involved in the process anyway.

FOTA members filed a legal challenge since they felt being forced to start using Cosworth engines while they were close to securing other power.. This ended in a dud.

On July 15 2009, it was confirmed that Max Mosley would step down from the FIA Presidency.

The weekend of the 2009 Hungarian Grand Prix, thirteen teams met with CVC in order to start hammering out a new Concorde Agreement. On 29 July 2009 BMW-Sauber declared they were stopping with F1 for reasons of “current developments in motor sport”.

Only days later FIA signed the Concorde Agreement, effectively ending the polemic.

The new Concorde Agreement was basically a re-write of the 1998 version. Restoring powers to teams, keeping the status quo (an all of its budgetary challenges)

Will teams play hard-ball when Liberty pushes for a budget cap? Only the future will tell.. TJ13 estimate that ‘winter is coming’ and war might be pending…

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5 responses to “Teams abandon F1 over cost cap if

  1. I think you’re mixing up who can do what here. The only body that can implement a budget cap is the FIA, though it would be done in conjunction with the teams. Liberty through the Concord Agreement are the ones who pay the teams. Liberty can’t force a budget cap and the FIA can’t force Liberty to pay the teams any more or any less. May people seem to believe the nonsense that Liberty “own” F1 – they don’t. They are the commercial rights holders and nothing more.

    • Cavallino, tnx for your comment. The current triumvirate of FIA, Liberty and teams have to work together. It feels like FIA is taking the backseat on this matter: they care about the sport and spectators, but are staying clear of any “budgetary-discussion” fireworks. They leave that to Liberty, but I expect them to side with Liberty more or less silently.
      Liberty isn’t enforcing anything at this moment: they can’t and don’t have to, since the current Concorde isn’t at its end. However, with all news coming out, you might agree that they are heavily testing the water..

  2. Bruznic,
    RedBull, Mercedes, Ferrari: all 400M USD (and plus) per year. Williams, Force India etc: all below 200M USD year.. (who gave me these numbers??) Getting teams on the same (budgetary) page will be a challenge.

    • Regardless of what they say – there’s no way M-B, RB and especially Ferrari are going to agree to a budget cap. Honda and Toyota showed 10 years ago that having a budget of $100 – $200M more than everyone else didn’t guarantee success. As I said before M-B, RB and Ferrari are all multi-billion dollar a year company’s. Does anyone honesty believe Liberty is going to push them around.

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