FEBRUARY 20, 2009

The state of F1 politics at the moment

It has been many years since the teams were truly a force in Formula 1 politics. They have been divided by the different demands on them and by the fact that some of them were given incentives to break away from the rest of the pack. By dividing the teams F1 boss Bernie Ecclestone and FIA President Max Mosley were able to conquer them and the team bosses seemed unable to find any common ground to form an alliance to protect themselves.

However, in 2005 there were the first signs that the teams were finally beginning to understand that they had to work together if they were to have any political power to move the sport in the direction that they want to see it moving.

It was not dissimilar in some respects to the work that Ecclestone and Mosley did in the 1970s when they were representing the teams and trying to force the race promoters to standardise prize and appearance money so that everyone had a better chance. They argued that as the actors in the F1 drama the teams should be getting more of the revenues. The FIA was also claiming that it should have a share of the money and this culminated in a period of conflict known as the FISA-FOCA War during which the Formula One Constructors' Association (FOCA) battled for control with FISA, the sporting arm of the FIA at that time. In the end, FOCA won the right to sell the television rights and FISA agreed to take a percentage of the profits. The deal was formalised in 1981 in a contract which became known as the Concorde Agreement, which recognised the FIA as the supreme rule-making body and owner of all the F1 commercial rights, including TV and radio broadcasting, but leased these rights to the teams. This gave Ecclestone a package to sell to the TV station and as the sport's popularity grew he gradually took personal control of those rights.

One of those involved in the formulation of the Concorde Agreement was Ferrari president Luca di Montezemolo, now the head of Fiat and Ferrari. He understands that in ordre to have power the teams must work together and in recent months, since the foundation of the Formula One Teams' Association (FOTA), much work has been done to try to use the team's influence to steer things in the right direction, but trying to work with Ecclestone and Mosley, rather than in opposition to them. Having said that the desire of FOTA to get a bigger share of F1 revenues will ultimately lead to conflict with Ecclestone unless he feels that he has to back down. Holding the teams together is the key issue at the moment but FOTA will give details of its programmes soon in a press conference in Geneva on March 5.

Luca di Montzemolo, the FOTA president, will make a speech in which he will unveil FOTA's plans for the future of Formula 1. These ideas have been formulated in the recent meetings with the aims of making F1 commercially sustainable, environmentally friendly and compellingly attractive for spectators, TV viewers and internet consumers in the years ahead.

All the current F1 team principals will be present at the event to answer questions.

The teams say that the first priority at the moment is cost-cutting.

The existence of FOTA is, by definition, a challenge to the status quo and it is no secret that FOTA wants Ecclestone and his partners in the Formula One group to reduce their share of the revenues so that the teams make more money. They are using the very same arguments that Ecclestone and Mosley used back in the 1970s. The FIA's position is interesting. It is legally-contracted to the Formula One group with regard to the commercial rights of F1, and the terms of these agreements are not public information. What we do know is that the FIA has a right to veto a change of control. It is not clear whether the federation has the right to withdraw "World Championship" status and confer that elsewhere in the open-wheeler world.

Having said that, the federation must be well aware that if the teams one day decide to leave en masse and start a new championship, because no deal can be struck with the Formula One group, it will be obliged by its agreements with the European competition authorities to sanction such a series. The idea of a split is utterly illogical if one considers what has happened in US open-wheeler racing in the course of the CART-IRL battles. However, the FIA has allowed that to happen in rallying. The FIA World Rally Championship has been challenged in recent years by the Intercontinental Rally Challenge, which is promoted by the TV station Eurosport. IRC is currently attracting more manufacturers because it is cheaper and is seen to be closer to the traditions of rallying. The WRC, for example, has adopted a rotating 12-round calendar which means that each event is held only once every two years. This has led some of the most famous events to do deals with to the IRC. This year's WRC, for example, kicked off with the rather low-key Rally Ireland while the IRC ran the Monte Carlo Rally, the most famous event of all.

IRC also has the Safari Rally, San Remo and the RAC. The Tour de Corse, the Swedish Rally and the New Zealand Rally are all off the WRC calendar this year while new events in Poland, Norway, Cyprus and Portugal have been included.

It is possible that the WRC will win the day if it adopts the IRC rules as the value of the World Championship tag would then be the deciding factor for the manufacturers, which like to be able to advertise that they are world champions.

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