Stefano Domenicali graduated the University of Bologne in 1991 an immediately joined Ferrari. Now the current CEO of Formula One and heading up the commercial interests for Liberty Media, he is the new Bernie Ecclestone style power broker.
And having managed Ferrari as their team principal from 2008-2014 Domenicali is the second longest standing boss in Maranello behind Jean Todt who reigned for 15 years before leaving to head up the FIA.
Domenicali learns Ecclestone skills
During his tenure leading the Scuderia, Domenicali was forced to deal with Bernie Ecclestone on a regular basis and learned to navigate his manipulative tendencies.
But its now Stefano who has to lead the sport and while his management style is different from Ecclestone’s at times he resorts to Bernie style tactics to achieve his objectives.
Liberty Media are keen to expand Formula One’s footprint and to do so require the teams and the FIA sign up for a new Concorde agreement. This binds all parties legally for the duration of the contract and lays out specific terms and conditions for a variety of possible opportunities.
The most recent Concorde agreement was signed in 2021 and runs until the end of the 2025 season.
New F1 teams row set to explode again
One of the current bones of contention between the teams and the FIA is the organising bodies desire to increase the F1 field from its current ten teams.
Team bosses have almost universally resisted this move believe they will each be out of pocket because of matters of dilution.
Speaking to f1.com Domenicali plots a tricky political path on the subject stating the sport doesn’t need more than 10 teams.
Domenicali plots political pathway
“I don’t think so, that’s a personal opinion, I need to say that. If you have a good show, 20 cars are more than enough.”
“If you have two cars or two drivers fighting, the level of attention is mega. So if you have already two teams fighting, that means four cars, it’s just incredible.
“So can you imagine 20 cars, 10 teams are at the level where there is competition on track? It would be impressive.”
Yet the FIA has pressed ahead with an invitation for new teams to apply to join Formula One with an announcement expected from th end of June as to those who the governing body believes meet its criteria.
F1 boss backs teams’ opinions
This is ticking time bomb with the teams who have no say in whether more competitors are inited to participate in F1.
Domenicali explains his position further, “I would say let’s wait and see. My ‘no’ is not against someone wants to come in, I need to clarify that because otherwise it seems that I want to be protectionist, that is not the case.
“I want to see the right one and I need to also respect the ones that have invested in F1 in the last period, because we forget too quickly the respect.
“Now everyone wants to jump in the coach that is very fast. But we need to be prudent, we need to take the right decision, that’s what I’m saying.”
Current $200m F1 entry fee to small
At present the Concorde agreement provides for the FIA to decide if new teams are fit and proper to join Formula One and an anti dilution/joining fee of $200m is required.
The teams are now arguing that despite the Concorde agreement being just two years old, the value of the entrance fee does not represent the true amount the teams should receive in compensation of the dilution of the prize fund.
Earlier this year the US professional hockey league opened its doors to a new team based in Seattle. The entry fee was $650m something a number of F1 team bosses have latched onto.
Red Bull were recently offered an alleged $800m to buy their junior AlphTauri team. Given a new team has to set up its operations which would cost no less than $200m, this has been used to justify the new anti dilution fee of £600m.
Concorde loophole for Andretti
Our of the four serious contenders to join Formula One, Andretti Motorsport is the hone causing concern for the current teams. They claim to be ready to join for the 2025 season a year before the new Concorde agreement is due.
This would mean they pay the current $200m instead of the revised $600m set to be introduced into the next Concorde agreement
“There is an evaluation going on today that involves the FIA and us to make the right call for the future,” Domenicali continues.
“This is something that is also connected to the future discussion that will happen with the renewal of the Concorde Agreement, that we need to remember is expiring at the end of 2025.”
Domenicali wants to mediate
It could be F1’s CEO also wants the new agreement between F1’s three parties to reflect that it should not be the FIA’s sole decision on the admission of new F1 teams. Because at present despite his talk of “discussion” on the matter, Domenicali knowns the power resides with the FIA for now.
Stefano goes on to make the case for the current teams and a bigger entrance fee for new competitors.
“If you look what has happened in such a short term, talking about the value of one team, that was not many years ago – I would say two years ago when the new Concorde Agreement has been signed – when there was the talk about what is the value of a team that has to come in F1, there was a number put on the Concorde Agreement that was 200 million.”
Early Concorde deal raises entry fee
F1’s chief goes on to argue at the time this amount was believed to be prohibitive for new teams, “because there were teams in the past that were sold for £1.
“Now the market is offering almost billions to teams and they are refusing that. Can you imagine that?”
Liberty Media’s CEO Greg Maffei cause some puzzlement recently when he called for discussions on the new Concorde agreement to begin and complete ahead of the 2025 deadline.
“We have several years left to run on the Concorde Agreement. But I think there’s a consensus among the teams and the FIA and ourselves that now might be a good time to try and strike while the iron is hot and renew and extend the Concorde Agreement,” said Maffei.
“There’s certainly no obligation to do that. And there’s certainly no risk if that doesn’t get done.”
But teams must agree expansion of F1
The Liberty boss then reflects on how in years gone by the Concorde agreement deadlines have come and gone with no new arrangement in place.
“I hope we have a more positive relationship, and everybody sees the benefit of going early and providing certainty for all involved.”
The carrot for the teams is if they agree a new Concrde agreement early, they can insert the new $600m anti dilution/joining fee for new competitors, thus preventing Andretti and the FIA circumventing the provision.
The stick from Liberty will be forcing the teams to agree to the expansion of the sport which at present is set at 24 events per season.
— Formula 1 (@F1) June 12, 2023