F1 Frontline with Mark Hughes

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Nico Rosberg leads away at the start of the second modern Russian Grand Prix. The German started from pole, but throttle trouble forced him to retire and allowed Mercedes team-mate Lewis Hamilton to win again. Thus the Englishman moved ever closer to a third world title…

Interesting times in Formula 1 as this is written. At Sochi, with F1 potentially facing the doomsday scenario of losing up to three teams and two engine manufacturers next year, Bernie Ecclestone turned up and attempted to put out several simultaneous fires. 

Fire one: Red Bull’s engine supply deal. “It’s sorted,” said Bernie. “It looks like we are being forced out of F1,” said Red Bull’s Adrian Newey on Monday. “Sorted,” insisted Bernie. 

If it had indeed been sorted, then it would have been at a level above the heads of Newey or team principal Christian Horner. For example, in engineering a Red Bull/Renault rapprochement Bernie would use as leverage the ‘historic payments’ (believed to be £20m per season) to which Renault, as double world title winner in 2005-06, may be entitled if as expected it bought the current Lotus team. (Actually, repurchased it from the people to whom it sold in 2009.) Carlos Ghosn and Dietrich Mateschitz would be the respective Renault and Red Bull representatives in that discussion, in which Renault’s historic money would be forthcoming if the supply to Red Bull could be continued.  

Fire number two: however, if Bernie succeeded in pulling off that feat, it would leave F1’s owners liable not only for extra millions to the Enstone team, but also significantly increased payments to the Mercedes team on account of it having secured a second constructors championship. And this on top of contracted vast payments to Ferrari and Red Bull. With CVC looking to sell, Ecclestone confirmed in Sochi he expected a deal with a new owner before the year’s end – with a consortium led by American real estate billionaire Stephen Ross the front-runner. However, the book value placed upon the sport would be lowered by the extensive increase in annual team payments. 

Fire number three: in the days prior to the Russian Grand Prix, it was confirmed that a Sauber/Force India complaint to the EU regarding the income distribution and rule-making process of F1 was going ahead. European law was potentially going to impose itself upon the sport. Surely not helpful…

Except of course, it might be very helpful indeed. If things could just be timed right, there is a sight-line between all these fires to soothing blue water. If the EU complaint were upheld, Ecclestone on behalf of the owners could legitimately say the payment contracts to the teams were frustrated – that he was no longer legally able to pay what had been previously agreed and that everything now needed to be renegotiated. In so doing, the sport’s finances could potentially become more attractive as he renegotiated downwards. But to make all that work would require Renault to be convinced that it would still be in their interests to supply Red Bull for another season at least. 

With the slow speed at which justice works, that might be feasible – ie Renault could get the historic payments until the ruling came – for someone with Ecclestone’s negotiation skills. It’s been observed that Bernie rarely has a strategy – just objectives. How he gets to that place tends to be improvised and this was a perfectly aligned situation for that approach to work. 

In an interview with Martin Brundle in Sochi, Ecclestone conceded several points that give hope for the future: that F1 needs an owner that will invest, not just take, the drivers should be left to their own devices and less controlled by teams, the current agreements “need to be ripped up”, the racing needs to be better. All of which are points we’ve been making for some time. He also advocated an affordable engine for independent teams, which is where an ‘investing’ owner may come in. 

The reality will almost certainly be somewhere between the doomsday and utopia scenarios. Something is happening. But even Bernie can’t yet be sure quite what.