For those of you who’ve not heard, eight of the ten teams currently taking part in the sport last night announced that they’ve commenced preparations for a breakaway series in what could become the greatest upheaval in the sixty year history of Formula One. Unless a compromise is found between the FIA and the teams’ association FOTA, then it’s possible that Formula One will continue sans Ferrari, McLaren and many of the other teams which have contributed to the history of the greatest form of motorsport.
So how did we get here? Well, the starting point can be debated but this row hit its current zenith when Honda sensationally quit the sport towards the end of last year. Though they were saved and became what we now know as Brawn GP, this signalled a warning sign for the sport’s governing body. Costs needed to be slashed to ensure that grid levels didn’t fall below the current twenty, a move made more necessary and urgent by the recession. Discussions on how exactly to save money left to the proposal of a budget cap, something that many of the teams (especially Ferrari) are against. They accuse the FIA of poor governance, the FIA don’t back down and we’re now as close as ever to the ruination of Formula One.
There are other factors at work aside from the obvious monetary ones. For one, it’s clear that many team principals are unhappy with the stewardship of Max Mosley as President of the FIA. They claimed about him to the World Motorsport Council and a statement released by the FIA in the last few days showed contempt for Ferrari head Luca di Montezemolo. Another statement is due from the FIA this afternoon – I’d expect more of the same.
Today’s development is not unexpected and while my pal James claims that a breakaway series is viable, I have to disagree. Split championships mean split revenues. Is it really feasible for FOTA to organise a Championship on time for next year? Aside from the logistical problems that come with organising events, the teams will have to negotiate deals with tyre suppliers, fuel suppliers etc. Who would televise the deals and, more crucially, who will pay to televise them? Formula One’s main income is from broadcasters and this will not be matched for the FOTA crowd.
I suspect a deal will be reached. Common sense will apply, concessions will be made and Formula 1 will last. Max Mosley will almost certainly have to leave his post as FIA President for this to happen, but I feel he will. The sport’s reputation will be tarnished though. Fans want close racing and great action. Casual fans will be turned off if, when they tune in to Sunday’s race, discussion is dominated by politics. The sport did not need this, and unless a deal is struck soon (this evening's impending deadline for next year’s entry list means that is possible) then the sport could take a long time to recover from this.
***
Update
The FIA statement has been released in the last few minutes and will do little to ease tensions. In the statement, which can be seen here, the governing body threaten legal action against FOTA over the breakaway series and again single out Ferrari for criticism. The statement also indicates that the aforementioned entry list will be delayed because of the legal proceedings, which hopefully is a tactic to buy more time to ensure that a deal is struck. The row rumbles on...
The FIA statement has been released in the last few minutes and will do little to ease tensions. In the statement, which can be seen here, the governing body threaten legal action against FOTA over the breakaway series and again single out Ferrari for criticism. The statement also indicates that the aforementioned entry list will be delayed because of the legal proceedings, which hopefully is a tactic to buy more time to ensure that a deal is struck. The row rumbles on...
Naturally there will be huge logistical problems of setting up a brand-new series in time for next year, but I would argue they are not insurmountable. FOTA hold one advantage: namely that they still have 9 months until the start of the 2010 racing year in which to get all their deals sorted. (Usually the entry list is not published until November, which would have given them only 4 months.)
ReplyDeleteAs you say, the sale of broadcasting rights will be the most crucial issue - who will take them, and how much they will sell for. If it is not widely televised and so does not generate revenue, then I imagine a rebel championship would founder quite quickly.
A split will be hugely damaging, without a doubt, and both sides are likely to lose out. It is my feeling, though, that the FIA stands to lose a lot more than FOTA.
I think the broadcasting is key though James, because that's the key income driver. The teams won't have the cash to spend if they don't have the income they get now. Even a bigger slice of a smaller pie won't match the income of the bigger teams. Ladbrokes say that SKY are favourites to show the series should it happen but the issue with that is that if FOTA sell the rights to SKY and their ilk around the world, i.e. subscription broadcasters, then the viewing figures will be down and the sponsors won't be happy to pay what they do now. It's Catch 22 and the only way out is to stay in F1, albeit after some more brinkmanship.
ReplyDeleteI completely agree that the broadcasting is key, although I do think it is interesting that the BBC, Germany's RTL and Sky Italia are all said to be looking very carefully at their contracts with FOM right now:
ReplyDeletehttp://en.f1-live.com/f1/en/headlines/news/detail/090620123013.shtml
http://en.f1-live.com/f1/en/headlines/news/detail/090620122202.shtml
Of course what this could mean is that it might be the broadcasters who effectively force the hands of the FIA and FOM, and induce them to agree some sort of deal with FOTA.
At the moment, though, I feel that the balance of power is edging towards FOTA. Whether their bullish stance reflects a real desire to set up a rival series - or whether they are just using it as a bargaining chip in order to force a compromise - does indeed remain to be seen, but I'm inclined to believe the former. Time will tell!
Of course the broadcasters have been looking at their contracts - they don't want to be paying whatever the fee is (about £40m per year in the case of the BBC) for what could be a devalued Championship. I think FOTA aren't completely bluffing about the Championship - I'm sure that they're setting up something at the moment. I saw an interview on SKY News with a Times journalist, maybe Edward Gorman. He claimed that a lot of preparation work had gone into a potential breakaway and that deals with circuit promoters had been made. I still think, however, that it's in their best interests to compete in F1 next year and they know that, despite a bullish public stance.
ReplyDeleteWhat is apparent, though, is that the ultimate ambition of FOTA is - one way or another - to severely limit the influence of Mosley and Ecclestone in the governance of the sport. If they can somehow manage that through trilateral talks with the FIA and FOM, then a split could be averted. But that will require all parties to agree on a common solution, and quickly - and this is why I am sceptical. A breakaway series may in fact prove easier to achieve, relatively speaking.
ReplyDeleteOne thing is for certain, and that is that the longer this crisis continues, the less time there will be to come to any agreement, and the stronger FOTA's hand will become. To come back to the original question of logistics: in terms of organising a championship in time for next year, there will naturally come a point of no return, beyond which FOTA will have no option but to break away, if there is no compromise proposal on the table.