Are we now even closer to a break away F1 series?

[motormania]

With Ferrari now losing their battle in the courts and The Spank not prepared to move on the £40million budget, I wonder if we are now close to a fully backed (by the FOTA) break away series in 2010.

Ferrari have laughed at the 7-8 new teams that The Spank says are ready to join the current F1 setup for 2010 and I for one agree with Ferrari that these new teams are a joke and that most of these teams will fail to impress.

It is now only time before BMW and Mercedes join Ferrari, Toyota, Renault and Red Bull to confirm they will not put forward a team based on The Spanks current rules.

I do not see a 2-tier championship next year, I see 2 series next year...

Cheap F1 and Manufacturer/Global branded F1

Thoughts...

Edited by motormania on Wednesday 20th May 15:38

[Plug550]

Certainly starting to look that way. Although with both sides looking very entrenched in their positions, a compromise must surely be just around the corner.

One of the bugger's going to have to blink soon.

[stifler]

I'm sure that Bernie is working hard behind the scenes for both sides hedging his bets, trying to get the best deal possible (for himself).

[patmahe]

I don't really care anymore, F1 has become so political that you read more about the off track antics than on.

I don't think F1 could get much worse in this regard, every time there is any sort of an improvement for the benefit of the 'sport' it is instantly wiped out by some scandal, crisis, illegality etc...

For example this year for the first time in years we had a significant shake up in the order of F1, we had new teams come to the fore and good racing, but what happens but the diffuser row. It never should have taken weeks to resolve that!!

If the cars are ruled legal to race by the FIA then thats it they are legal to race end of story, no legal challenges, no appeals. The way the sport is governed is a joke, so I think a breakaway group might actually improve things. It might take a year or two but the sport would probably benefit.

[paranha]

Thankyou FIM (at the moment)for the MotoGP series---just switch on(thankyou BBC)and ENJOY ALL the Biz---Real Racing!!!!!!!!!!!!! No politics.ATM.

[skinny]

2-tier is already out the window, and there is already talk that the budget might have to become flexible. bernie won't let his little empire disintegrate, and with no-name teams and no-name drivers, it would.

give it a month this will all be sorted, everyone playing to the same rules, budget cap at a compromise between FIA and FOTA with engines, team principles, drivers, and hospitality etc uncapped and a glide path down to $50m or something. There will also be something far more robust about how future rules are drawn up.

[El Guapo]

stifler said:

I'm sure that Bernie is working hard behind the scenes digging a hole to bury Max in.

EFA

skinny said:

bernie won't let his little empire disintegrate.

This is the key. FOTA hold most of the cards in the final analysis. Very few people (including sponsors and TV) would be interested in F1 without Ferrari, BMW, Toyota etc.

[belleair302]

The key is not Bernie, not the FIA, not the boradcasters and no FOTA. It all boils down to the owners of the F1 bonds....they need to repay some serious interest over the next couple of years and Bernie CANNOT make any decisions without their say so....

I think they will be sweating and lawyers will be rubbing their hands as teams walk away for a year or two.

[flemke]

belleair302 said:

The key is not Bernie, not the FIA, not the boradcasters and no FOTA. It all boils down to the owners of the F1 bonds....they need to repay some serious interest over the next couple of years and Bernie CANNOT make any decisions without their say so....

I think they will be sweating and lawyers will be rubbing their hands as teams walk away for a year or two.

Not trying to be pedantic, but I don't think you mean "owners" of the bonds. The owners would be the parties to whom the debt is owed, the lenders. They themselves might be worrying, but at present they are very unlikely to have any power at all to influence the outcome. They have no direct claim over the assets or cash flows of F1, in the same sense that a bank might hold the mortgage on one's house, but it's still one's house to make use of or alter.
F1 throws off more than enough cash to sustain itself, so the business is good - in its present form. There is a problem in that the people who bought it (the commercial rights) were unwilling to pay for it in cash, but instead set up a special company to buy it mostly with the banks' money, and that has to be repaid, on the aggressive schedule to which you allude. It is possible that they could default, just as some of its previous owners have defaulted (EM-TV, Kirch), and the ownership of that special company could fall into other hands, but the basic business is still fine.

Ironically - and this is another thing that seems to have got very little media attention - the FIA cost cap implies that F1 will be even more profitable to "Bernie" (Delta Topco, CVC, blah, blah) than it is today.
The present pool of money that goes to the Constructors seems to be around $400M. They need that to help to defray their collective operating expenses of something like $2B.
Mosley wants to cut the racing expenses down to $60M/team for 13 teams, or $780M total. If we add back the other stuff not under the cap, we're maybe at $1B.
Obviously, if the teams collectively are spending a billion dollars less money to race, they will not need as much in FOM prize money to put on the show (which show would be, if anything, enhanced by a 30% increase in number of entrants).
Certainly the commercial rights holders, and the parties to whom they owe money, must be hugely worried right now - they would be worried even without this cost cap palaver - but I'd disagree if you're saying that they are in a position of power. Judging from what one has read, they must be in a position of great weakness. They have little leverage to induce Ferrari to enter, and they have little leverage to induce Mosley to give in. They're at the mercy of both sides.

[Northern Munkee]

Not lost on me.

A clear case of forget the sport, look who younare dealing with... 'Follow the money'

Correct me if I'm wrong, are you suggesting a smaller F1, even sans Ferrari, may ultimately maybe more profitable, as it would be much cheaper to run, than profit it would lose by dumbing down? All the motivation BE (& MM increases hus powerbase) would need...

[Asterix]

One wonders if the current state of British politics is a source of inspiration for Ferrari & FOTA.

Wholesale change is necessary - not tinkering. Bernie & Spanky need to be ousted and left on the back doorstep in the rain. They need a bloody good lesson being taught to them.

[profstoff]

El Guapo said:

Very few people (including sponsors and TV) would be interested in F1 without Ferrari, BMW, Toyota etc.

Very many people were interested in F1 before BMW, Toyota, Renault et al were in formula 1, in fact enough people were interested to entice those very parties to join. Manufacturer's are consistently fickle. Look at the BTCC a few years ago, one minute it's a bumper series with lots of manufacturer support, next thing they're all leaving and because it was dedendant on them, the series became a poor shadow. In F1, Ford and Honda have gone, who's going to be next. Ignoring the latest sabre-rattling, Renault have questioned whether it is worth continuing and the investment/reward raation fo Toyota must have raised questions at board level. Max is right to worry about manufacturer's leaving and has to create a series where independent teams, always the backbone of any motor racing, can compete equally.

As for the list of names disclosed that are thinking of entering next year, there are some respectable people in there who are not to be derided.

Bernie alluded to the solution after the FOTA/FIA meeting and I think the situation will be resolved with a compromise, higher budget cap phased in over a number of years. There will not be a two-tier F1.

Personally, I'm more concerened with the way the champion is being decided on number of wins next year.

[Duke of Rothesay]

Asterix said:

One wonders if the current state of British politics is a source of inspiration for Ferrari & FOTA.

Wholesale change is necessary - not tinkering. Bernie & Spanky need to be ousted and left on the back doorstep in the rain. They need a bloody good lesson being taught to them.

I can't think of anyone better than Bernie to run the commercial side of F1.
He has done a brilliant job dragging it from being a largely unreported sport to being the global phenomenon it is today.

[35secToNuvolari]

I ran across this article from a year ago about a the possibility of a breakaway series. I guess I didn't realize this thing has been brewing for so long. As an aside, the article mentions that the GPMA hired Goldman Sachs to look into "practical questions." Besides the financing, what practical questions about a breakaway series could a bank answer?

http://www.grandprix.com/ns/ns20452.html

[Derek Smith]

35secToNuvolari said:

I ran across this article from a year ago about a the possibility of a breakaway series. I guess I didn't realize this thing has been brewing for so long. As an aside, the article mentions that the GPMA hired Goldman Sachs to look into "practical questions." Besides the financing, what practical questions about a breakaway series could a bank answer?

http://www.grandprix.com/ns/ns20452.html

One practical question might be who replaces Bernie. Come the revolution FOM will probably be first against the wall.

The legal side is a minefield with the FiA 'protecting' their assets from the time of the previous threat to breakaway. One would assume, or expect I suppose, that in the intervening years the teams have been creating some kind of plan.

What irritates me about this article is the penultimate but one paragraph where is says, as if it is an established fact, that, and I quote:

"Many of the delegates who voted for Mosley did so because they felt he was the best man to deal with the current commercial negotiations."

Firstly, we know from the proud boast of one chap that this is not their motivation, and secondly that there must have been absolutely no evidence to support this conclusion.

Poor journalism. It makes you wonder how much faith you can place in the rest of the article.

[flemke]

profstoff said:

[Personally, I'm more concerened with the way the champion is being decided on number of wins next year.

That's been dropped.

[flemke]

Northern Munkee said:

Not lost on me.

A clear case of forget the sport, look who younare dealing with... 'Follow the money'

Correct me if I'm wrong, are you suggesting a smaller F1, even sans Ferrari, may ultimately maybe more profitable, as it would be much cheaper to run, than profit it would lose by dumbing down? All the motivation BE (& MM increases hus powerbase) would need...

That is clearly part of the bet: that they could maintain (other things being equal) the CRH's revenue stream if F1 cars were less sophisticated and exotic than now - so long as they still appeared to be more sophisticated and exotic than any others, and if they had full grids, the biggest name drivers, and the Formula One/Monaco/Ferrari/Flavio bull5hit factor. Some of it is substance, some of it is marketing helium, but they think that they can retain F1's elite status whilst going to a common ECU, common tyre, limited testing, and other stuff to which the public are indifferent.
If the teams were spending half as much as they are now, they would not require such a large pool of prize money for support. Who would get the savings? Smaller pool to pay out = bigger pool left for Delta Topco.

[AndrewW-G]

I wonder what the odds are that if mosely isnt re-ellected later this year, then the cap will be either delayed or restructured to suit the big teams

[flemke]

AndrewW-G said:

I wonder what the odds are that if mosely isnt re-ellected later this year, then the cap will be either delayed or restructured to suit the big teams

If Mosley weren't re-elected, a lot would change, although I doubt that much related to the cost cap could be changed in time for next season.
The FIA election is in Oct (IIRC), then a new president would need time to settle in before implementing any major changes. The potential new entrants are saying that they need to have certainty within the next couple of weeks in order to be ready to join the grid next year (although one strongly suspects that they all got phone calls from Max recently saying that he would really appreciate their making clear their immediate need for that certainty, so that he could manifest their concerns to the Paris court).

[Fire99]

35secToNuvolari said:

I ran across this article from a year ago about a the possibility of a breakaway series. I guess I didn't realize this thing has been brewing for so long. As an aside, the article mentions that the GPMA hired Goldman Sachs to look into "practical questions." Besides the financing, what practical questions about a breakaway series could a bank answer?

http://www.grandprix.com/ns/ns20452.html

You beat me to it. I was just reading up on the 1982 season with teams boycotting a race and, if I read correctly, there being one race which was effectively disowned from the championship. Then there was Lauda leading a sit in with a knees-up round a piano in a hotel.

Obviously that's all been stolen from various websites so others may be more in the know but it goes to show that Politics has been smacking the face of F1 for atleast the past 3 decades.