Last Updated on October 17 2024, 1:08 pm

Formula One has been through many growing pains since its inception in 1950 when going racing was very different from now. Most of the Grand Prix were held in Europe and the sport was held in muddy fields with little proper infrastructure.

Over time the sport has evolved through a variety of eras with one of the most important being the resolution of the enduring debate over who cold market the sport and how was this activity to be prevented from influencing the regulatory control of F1.

Around the turn of the millennium, the European Commission began to take interest in how Formula One was being run. At the time Bernie Ecclestone held positions of authority within the FIA and he controlled the commercial rights to the sport.

 

 

 

F1 separation of duties

The Commission in a 2001 report found that conflicts of interest would arrive were the financial and regulatory aspects of the sport not separated. So Ecclestone relinquished his positions at the FIA to concentrate solely on the marketing and financials of Formula One and the organisation of the race promoters.

And so the principle of separation of duties was enshrined within F1. The FIA would perform the role of the sport’s law giver enforcement team, while FOM would continue making money out of F1.

The new arrangements mollified the Eu commission who were satisfied the commercial and regulatory sides of F1 were noe completely separate.

“The proposed changes to the regulatory framework and to the commercial arrangements appear to the Commission to introduce sufficient structural remedies minimising the risk of possible future abuse,” the Commission reported.

“The new rules introduce a separation of commercial and regulatory activities in motor sport, which the FIA intends to make effective, inter alia, through the appointment as from 2010 of a ‘commercial rights holder’ for 100 years.”

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‘Chinese wall’ slips

It continued stating: “…the Commission has been assured that the FIA rules will never be enforced so as to prevent or impede a competition or the participation of a competitor, save for reasons inherently linked to FIA’s regulatory role of maintaining safety standards.”

And thus the degrees of separation were firmly established between the FIA and whoever controls FOM, the company which oversees all commercial activity.

In 2017, Liberty Media acquired FOM and the commercial rights of F1 and under their leadership the sport has grown in almost every aspect conceivable. The calendar is bigger, the number of sponsors has doubled and new races continue to express interest in joining the F1 circus.

Yet there appears to be some slippage in the Chinese wall erected by the EU Commission with demands with FOM allegedly expressing a regulatory sanction towards the end of last season.

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Andretti refused by FOM, accepted by FIA

Having had its application to join the F1 grid scrutinised for months by the FIA, Andretti Racing was finally green lighted in 2023 by the sport’s regulatory body to join F1 racing. The matter was then passed to FOM for their input.

After further months of delay, FOM issued its own report which refused the Andretti application out of hand making unsubstantiated claims and with illogical reasoning.

It was strange a organisation based in the USA and familiar with the “anti-competition” laws left itself open to challenge on what appears a cut and dry issue.

Back in 2002 when the Prost Grand Prix team folded a company by the name of Phoenix Finance attempted to rescue its assets and take the team’s place on the F1 grid. Phoenix was ultimately refused entry into the championship which saw the organisation issue legal proceedings against the FIA and FOM.

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FIA adamant over their role

Whilst Phoenix lost the case, it was established by the court that during the process the proper separation of powers had been maintained.

“Whilst the FIA is the owner and regulator of F1, FOM is the commercial exploiter,” the judgment said quoting testimony from FOM’s then-legal head, Sacha Woodward Hill, who stated, “…FIA alone determines and controls whether Phoenix (or any other entrant) can compete.

“FOM and FOA have nothing to do with deciding this: if FIA announces that an entry has been accepted and that a certain team can compete, that is the end of the matter as far as FOM and FOA are concerned.”

Come 2010 and four new teams were green lit to join Formula One. Manor (Virgin Racing), Lotus Racing (Caterham), Hispanic Racing and the never to see action USF1 project. Yet this was clearly with the approval of the F1 commercial rights owners given Bernie Ecclestone bankrolled these teams prize money which was paid from outside of the regular pot for three years.

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Haas F1 approval sailed through

Haas F1 also applied to join Formula One in 2014 and there is no evidence to support that FOM had a role in the approval process. There is unsubstantiated opinion out there that in fact Bernie Ecclestone gave his approval to the American team’s entry, yet in Geunther Steiner’s book “Unleashed” he talks only of having to make presentations to the FIA.

However, Australian publication Speedweek now reports that a secret veto has been written into the 100 year rights issued to the commercial rights holder back in 2010. Given the relationship between the FIA and FOM back in 2014 was more cordial, then the approval Fromm FOM could have been passed on the nod.

But something has changed since then as the Andretti journey towards Formula One reveals.

Speedweek also observes the apparently regulatory role being played by FOM as it was they who veto’d the Andretti application. Wherever the power of veto came from and when, is irrelevant, the fact it contravenes the EU Commission rulings is not.

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Liberty Media face billions in fines

The Andretti matter has clearly been handled differently from the failed proposal by Phoenix to acquire the failed Prost Grand Prix racing team.

So why have the EU Commission failed to come a knocking, asking questions about the agreed separation of powers. Well as with all things in the European regulatory arena, it takes forever for the 28 to agree and so the US Justice department has meanwhile stepped in.

Whilst the FIA is based in the Place de Concorde in Paris, Formula One is subject to the laws of the countries in which it races and a number of US Senators wrote to the US Justice Department before the hosting of the Miami Grand Prix. They complained the refusal by FOM to accept a new competitor into F1 was in breach of “anti trust” laws and anti-competitive.

This is a big deal in the US with the NFL recently falling foul of such rules and awarded with a $4.7 billion dollar fine. Despite the apparent lax attitude of the EU Commission, it seems it will be the US Justice System which decides whether F1 is playing by its own rules, and whether somewhere along the way since the 2001 judgement from the EU, a veto clause for new applicants has secretly been inserted in favour of FOM. A very large fine awaits.

Formula One returns the US this weekend for the first time since the US Justice Department investigation was launched, and the topic will no doubt feature during the weekend long coverage of events at the Circuit of the America’s in Austin, Texas.

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Red Bull surprising B-Spec car in COTA

Red Bull Racing are pulling out the stops in a desperate attempt to claim their seventh constructors’ F1 championship. In the all time list they sit behind Lotus (7), Mercedes (8), McLaren (8) and Ferrari (16) and for the team their focus is not purely on Verstappen’s fourth championship but on the prize money on offer in the constructors’ and the pride of reeling Mercedes lead in by one.

Mercedes first foray into Formula One ended in 1955 when following the disaster for the brand at Le Mans where one of their cars was launched into the crowd killing the driver, 83 spectators and injuring 160 more. Mercedes returned to F1 in 2010 buying the Brawn GP team who were there world champions and by 2014 they had built a mighty operation both at Brackley and Brixton.

What followed created F1 history as the silver arrows team from that season claimed eight consecutive constructor world titles. When Max won his first drivers’ championship in 2021, the lacklustre performances from Sergio Perez meant Mercedes Valtteri Bottas was the better number two driver amongst the two teams, so it was Mercedes who went on to claim the team championship that year… READ MORE