F1 cost row
Structural change in Formula 1 is on the horizon. As the cost/income equation continues to get wildly out of kilter, there are smoke signals suggesting both a legal challenge and that the governing body might be recognising that it needs to act. “It’s a joke what the teams have suggested,” said FIA President Jean Todt on the matter of F1 cost controls. “The budgets are in the hundreds of millions and they are suggesting things that might save two million.” This is not ordinarily the way the consensual Todt would choose to express himself in his current role.
Todt is referring to suggestions that came out of an unproductive and at times ill-tempered meeting at Bernie Ecclestone’s Biggin Hill offices on May 1. Essentially the big teams don’t want a cost cap and the small teams do. But even if the big teams could be talked into accepting a cost cap, it would be such a big number that it would be irrelevant to the small teams. As the strategy group (comprising the six big teams) outlined suggestions, the small teams knocked each of them down as meaningless to them. The areas where (small) savings can be made for teams with 700-800 people do not apply to those with a staff of 200-250.
The big teams insisted they retain the rights to spend as much as they see fit: if that ends up sending some of the smaller teams bankrupt in trying to compete, then so be it. History is littered with dead F1 teams, they pointed out. Yes, said one of the small teams, but history is also littered with many dead drivers and thankfully F1 didn’t think it was a good idea to keep killing them.
So the big teams got exasperated, challenged the small teams to come up with some suggestions of their own and the small teams pointed out that they do not have a forum to make suggestions – that since the strategy group was staffed with only the big teams they felt unrepresented. At which point a principal from one of the big teams said, “Well, go and form your own club. You can call it the In The Shit Club.” At which point any meaningful discussion largely broke down.
We are back 100 per cent to self-interest and, therefore, to the two things in this discussion that have always been obvious: 1) Cost limits are just one part of the equation, with income distribution on the other side – and that might be an easier subject to tackle. 2) Any change to the numbers in that equation must be imposed by the governing body.
On the first matter, the general principle of the successful teams getting more favourable terms is obviously only ever going to exaggerate the differences between them and the others. The budgets required to be successful are now so big that it’s no longer possible for a small team to burst through the glass ceiling and instead they are caught in a situation where they are fighting for their existence. At least three, maybe as many as five, teams are currently struggling to survive. In a sport that generates such vast revenues, that’s wrong. The payments need to ensure every current team can survive. It’s also wrong that the sport’s owners take such a significant slice of the revenues – and, as we all know, that goes back to Max Mosley granting Bernie Ecclestone a 100-year money-printing licence a few years back. This ended up with Bernie in a Munich court as he got involved with all the money leeches who attached themselves to the sport, but who’d had no previous interest in it.
On the matter of enshrining cost caps into regulations, it was until a couple of months ago the FIA’s intention to do exactly that from 2015. But it surrendered this notion amid uncertainty over whether it had the legal mechanism to impose the cap against the big teams’ wishes. Now, some of those in the smaller teams are implying a legal challenge if the FIA does not impose the cap. In Spain Sauber’s Monisha Kaltenborn implied that, because of an agreement signed last year by all the teams agreeing to the idea of a cost cap in principle, then there could be a legal problem for any team now standing against that being imposed. “[The smaller teams] haven’t threatened anyone… it’s more for other [teams] to know what they’re doing or not, and assess the legal effects of that.”
Deadline for publication of the 2015 sporting regulations, in which any cost cap would have to feature, is June 30. Todt could probably do without having the complication of the European Union being involved in an F1 dispute and has called for teams to come up with something acceptable to all. When Max Mosley was in these situations, if he didn’t receive anything he considered adequate, he’d impose something draconian and negotiate back from there. Maybe, for once, Todt will have to take a leaf from his predecessor’s book.