Honda F1 website

JUNE 19, 2004

No agreement on F1 technical regulations for 2006

The Formula 1 team bosses seem ever further from an agreement on changes to the technical regulations in 2005 or 2006. The team principals were due to have a meeting on Friday afternoon but it broke up after a few minutes because all those involved were unable get to the right place as the right time. Five of the 10 team bosses had been in an official press conference where it was clear that finding agreement on anything is still long way off.

"I am not under the impression that the regulations have been agreed," said Jaguar's Tony Purnell. Far from it. It's a sort of fact-finding exercise at the moment. From our point of view, we're just hoping that moves to contain the expense of Formula 1 and get it back into something that meets the sort of market forces will be achieved. And I think that's the mood of everybody. And, you know, I hope we're successful in finding that formula."

Minardi's Paul Stoddart said that the recent Monaco meeting had achieved little.

"Perhaps it was played up a little bit more than that after the meeting," he said. "I certainly don't feel we went away from there agreeing anything. What worries me a little bit is we haven't seen an agenda for Monday week's meeting; and since it is so important, I would like to have seen one by now. But we've got to try to contain the costs."

"Nothing has been agreed," said Eddie Jordan. "There was a meeting in Monaco where Max told us what were the things that he would like to see and looked for an answer back from the teams. We've done that and did it almost immediately."

Ron Dennis of McLaren said that as far as he is concerned there are no regulations changes in 2006.

"There are no regulations going to change in 2006, unless it's by way of unanimous agreement between the parties that are signatories to the Concorde Agreement," he said. "That means the teams, the governing body, and the commercial rights holder. It's a simple fact. And for once I think we're in harmony as teams. We want to make things better. We want to make it better spectacle, we want to reduce cost. We're all committed to that. But it's never achieved in a public forum."

One of the things holding up a technical deal is the fact that the teams do not have any commercial deals.

"I've heard talk about a deal," said Jordan, "but there's no deal on the plate for Jordan that I know about, and I wish there was at least something that we can look at and think about and drool over."

Stoddart said that he hasn't even discussed a deal.

"I have no knowledge of it whatsoever. I don't feel that we're going to move forward with many things in Formula 1 until there is a new commercial deal, and that's just a simple fact."

Purnell said that he had had no offers and warned of "a degree of crisis coming" because of the commercian uncertainties.

"You have the technical regulations, but we're going to need some commercial regulation, as well," he said. "It happens in business, and certainly the way Formula 1 is structured at the moment - where the rich get richer and the poor get poorer - doesn't lend itself to competition because money is such an important element of this sport. So it would be lovely to think that you could come up with a commercial arrangement somewhat inspired by the sports out there where there are franchises, there's salary caps, there's things like drafts, you know, the weakest teams get the pick of the best players, things like that. That is what the sport needs. And certainly I hope the mighty forces are going to act to produce something like that and make the sport good for everybody over the next 20 years. "

Dennis said that the banks involved in the Formula One group need to wake up to reality.

"The three banks who inherited equity by way of the demise of Kirch are saddled with significant debt or equity, however you want to interpret it, on their books. And they know that the equity is reducing in value as we move closer to the end of 2007. Two of the banks have taken the prudent view of significantly writing down the value of that equity. One bank, whose involvement is currently indirectly underwritten by a government, is reluctant to write that equity down. So we have a strong desire of those three banks and the remaining shareholder to construct a commercial deal that is attractive to us enough to sign or extend either the existing agreement or a new agreement. So that there's very much a pressure on us to agree to some sort of commercial arrangement for the future. We're bound by a contract that we intend to honour and any movement away from that is going to require some pretty Herculean negotiations from a variety of people. I don't think the banks realize yet how precarious their position is. And until they do, no one's going to really move from the position they've adopted. I have an understanding of what commercial options are available to all of the teams at the moment, and the other guys, I'm quite sure, do not have as much information as they should have. That is unfortunately part of the inevitable process of negotiation, keep as many people in the dark as possible, divide and rule."