F1 will burst like subprime bubble

[Pup]

F1 Darwinists like Pup think that the big teams with huge financial muscle and endless resources should be allowed to do as it pleases them. Having a grid of five or six teams would not worry these people if the big teams can run more cars.

I guess the appropriate response is to paint your version of F1 as some sort of socialist racing utopia, where budgets are dispensed by the FIA Central Committee, and equality for all is guaranteed. But, being one of the three remaining socialists in America, I can't bring myself to crib from the Fox News playbook.

The thing about racing is that it is inherently a capitalistic endeavor. There's no public good to racing, at least not one that can't be otherwise satisfied through a multitude of other existing venues. So there's no moral imperative (yes, the drama, I know) to ensure the success of independent teams vs their massively funded counterparts - or vice versa, for that matter. It's all simply a matter of economics to 1) maximize the value of the sport and 2) to manage the distribution of that value among the participants in a way that grows/maintains/keeps alive the whole endeavor.

So it's a business, plain and simple. Bernie is the CEO, CVC are the shareholders, the teams are the employees, the circuits and media are the distributors, and we are the customers. The FIA is what it is - an outside regulator. Each player, with the exception of the FIA (theoretically), participates due to the value they receive and their goal is to maximize both the overall value of the sport and their personal share of it. FOTA is no more than a trade union, in every sense of the word.

Like Ciro said, F1 gains its value through the insane amounts of money that are spent. Why is F1 the pinnacle of motorsport, as we're told? Are the cars the fastest? No. Are the drivers the best? Debatable. Is the racing so downright riveting that I can't bear to miss a race? Hardly.

And yet we watch religiously. And spend the rest of the year boring each other to death about it. Obviously we do think that it's the pinnacle of racing. We've assigned the sport a value, and we've done it solely on the irrational belief that if the drivers are paid the most, if the teams spend the most, if the races cost the most to attend, and if the rich and famous think it's the best, then undoubtably it is. And to a large extent, it does become just that. A self-fulfilling prophecy of sorts, because the spectacle that results is more than the sum of its parts.

Like I said earlier - if there is a threat to the sport today, it is a threat on CVC, not the teams. The teams will spend what they spend. Most are debt free, and as long as the cost to enter the sport is reasonable (it's downright profitable at the moment), then we'll have cars on the track. If there is a problem with the teams, it will come from a the income side rather than the expense. If CVC begins to make less, then the teams will get less - and if the sport loses value to it's sponsors, there will be less of them to go around. And obviously, the more teams we have, the worse both of those problems would be.

That said, I think the teams can adjust their budgets to what they receive. CVC on the other hand has enormous debt, and if their sources of income begin to wither - if their media parters, venues, and track sponsors begin to default or renegotiate at lower rates, then they will be unable to pay the debt. Because of the structure of the loans, however, that can't happen until the loans mature. In the meantime, they can just swap their interest payments for additional debt. If that happens, the sport will find itself in the hand of the banks once again. It would make the headlines, and the banks would take a huge hit. But as far as the sport itself is concerned, I don't see how it would be affected.

[myurr]

As an aside it's more important than ever that the rules are clear and fairly judged, rather than be based upon the whim of the FIA. With budget limitations in place the interpretation of the rules is going to be more important than ever before - with FIA judgments having season long implications for teams performance. I don't have much hope.

The rule making is responsible in the first place for having clear and fair rules. Then it is the responsibility of the FIA to implement it fairly.

Lets have a look at the latest hash we had this season. It started with the FIA saying the downforce should be limited to 1.25 tons. Everybody agrees about the reduction of downforce but the teams said they don't want a fixed number and set up the OWG to work out a rule based on aerodynamic research. After two years of delay the reduced downforce configuration was applied. Only a clever guy at Super Aguri fond a loop hole in the OWG rule to bring in double deck diffusors. SA go bust and their engineers or their ideas end up at Brawn, Toyota and Williams. Now the ball is back at the FIA and it takes a decision to make the DDD legal for all. The decision is clear and the same for all.

So who --- up in this case? Obviously the teams because their rule proposal was ambigous and not clear. Who gets the blame? The FIA because they agree to the rule that was written by the teams. Had they implemented their own version against the teams the rule had been clear. We can learn from this example that one should not allways put the blame to the federation. If they dictate the rule they get fire. If the adopt what FOTA wants they get fire as well. In any case they get blamed.

If that were the whole picture then I would agree with you. However the FIA also gave conflicting advice to different teams, with Redbull being told a DDD would be illegal but then subsequent rulings deciding otherwise. This isn't the first time either, the FIA have made a habit of ruling one way only to then reverse their opinion or to arbitrarily change their interpretation of rules.

I would also argue that the FIA have ultimate responsibility for the rules, and even if they decide to delegate that responsibility to the teams they should vet, adjust and clarify the rules that come back from the teams.

[WhiteBlue]

F1 Darwinists like Pup think that the big teams with huge financial muscle and endless resources should be allowed to do as it pleases them. Having a grid of five or six teams would not worry these people if the big teams can run more cars.

I guess the appropriate response is to paint your version of F1 as some sort of socialist racing utopia, where budgets are dispensed by the FIA Central Committee, and equality for all is guaranteed. But, being one of the three remaining socialists in America, I can't bring myself to crib from the Fox News playbook.

The thing about racing is that it is inherently a capitalistic endeavor. There's no public good to racing, at least not one that can't be otherwise satisfied through a multitude of other existing venues. So there's no moral imperative (yes, the drama, I know) to ensure the success of independent teams vs their massively funded counterparts - or vice versa, for that matter. It's all simply a matter of economics to 1) maximize the value of the sport and 2) to manage the distribution of that value among the participants in a way that grows/maintains/keeps alive the whole endeavor.

So it's a business, plain and simple. Bernie is the CEO, CVC are the shareholders, the teams are the employees, the circuits and media are the distributors, and we are the customers. The FIA is what it is - an outside regulator. Each player, with the exception of the FIA (theoretically), participates due to the value they receive and their goal is to maximize both the overall value of the sport and their personal share of it. FOTA is no more than a trade union, in every sense of the word.

Like Ciro said, F1 gains its value through the insane amounts of money that are spent. Why is F1 the pinnacle of motorsport, as we're told? Are the cars the fastest? No. Are the drivers the best? Debatable. Is the racing so downright riveting that I can't bear to miss a race? Hardly.

And yet we watch religiously. And spend the rest of the year boring each other to death about it. Obviously we do think that it's the pinnacle of racing. We've assigned the sport a value, and we've done it solely on the irrational belief that if the drivers are paid the most, if the teams spend the most, if the races cost the most to attend, and if the rich and famous think it's the best, then undoubtably it is. And to a large extent, it does become just that. A self-fulfilling prophecy of sorts, because the spectacle that results is more than the sum of its parts.

Like I said earlier - if there is a threat to the sport today, it is a threat on CVC, not the teams. The teams will spend what they spend. Most are debt free, and as long as the cost to enter the sport is reasonable (it's downright profitable at the moment), then we'll have cars on the track. If there is a problem with the teams, it will come from a the income side rather than the expense. If CVC begins to make less, then the teams will get less - and if the sport loses value to it's sponsors, there will be less of them to go around. And obviously, the more teams we have, the worse both of those problems would be.

That said, I think the teams can adjust their budgets to what they receive. CVC on the other hand has enormous debt, and if their sources of income begin to wither - if their media parters, venues, and track sponsors begin to default or renegotiate at lower rates, then they will be unable to pay the debt. Because of the structure of the loans, however, that can't happen until the loans mature. In the meantime, they can just swap their interest payments for additional debt. If that happens, the sport will find itself in the hand of the banks once again. It would make the headlines, and the banks would take a huge hit. But as far as the sport itself is concerned, I don't see how it would be affected.

All nicely said, only that you don't address the points you quoted in the first place.

F1 isn't just a business. It is owned by the FIA which represents the organized motorists and motor sport aficionados around the world. The business side is rented out but the FIA still has the right and obligation to direct the sport in accordance with their philosophy. So an element of common good is certainly involved, it is just not a socialist philosophy rather than the spirit of welfare of all motorists. This is why we will see an increasing element of sustainability and common sense beyond just making money. Left to Bernie and Montezemolo we would not have any new teams on the grid and the rules would eternally be made to suit Ferrari. I hope that Todt will continue a course of FIA independance once he identifies with his new team.

[rjsa]

All nicely said, only that you don't address the points you quoted in the first place.

F1 isn't just a business. It is owned by the FIA which represents the organized motorists and motor sport aficionados around the world. The business side is rented out but the FIA still has the right and obligation to direct the sport in accordance with their philosophy. So an element of common good is certainly involved, it is just not a socialist philosophy rather than the spirit of welfare of all motorists. This is why we will see an increasing element of sustainability and common sense beyond just making money. Left to Bernie and Montezemolo we would not have any new teams on the grid and the rules would eternally be made to suit Ferrari. I hope that Todt will continue a course of FIA independance once he identifies with his new team.

This isn't true. FIA is the sanctioning body for F1. The teams that race in F1 chose to be ruled by FIA. Circuits that receive F1 chose to be approved by FIA. The teams and FIA have an agreement that they will conduct a championship by the name of F1 in a contract called the concord agreement.

FIA leased it's rights for the F1 name (a trade mark, nothing else) and waived to receive it's revenues to Mr Bernie Ecclestone, aka FOM. Mr Ecclestone cashed in those early subleasing those same rights to investors, aka CVC.

FOM organises the championship. FOM provides transportation (not for free). FOM has contracts with the circuits that must have FIA approval. Drivers have to get their licenses from FIA. FOM collects money from circuits and TV contracts. And it goes on like that.

No one owns a thing. No one has to be sanctioned by FIA to have a racing series. There is only a series of contracts and if everyone leaves the building those aren't worth a penny. Hence FOTA's threats to start another racing series.

The only ones that own something are the teams, that can build cars, and the drivers, that can race.

Ferrari management isn't stupid, either is McLaren, the two big ones left. They need an extra 16 cars at least to have a championship. They won't kill everyone else, they need them.

[donskar]

Cost is real, "value" is subjective... the BS marketing firm is selling a load of crap... The "value" of Brawn's "marketing" is exactly what they were paid for it(Virgin paid about 400K per race). If the value was any more than that the BS marketing firm(all of them are BS actually) sure did miss out on a huge commission. Instead of making up imaginary numbers they should have been lining up sponsors.

The Budget cap would have in no way "taken value out" of F1... that is just more marketing BS... 18 or less car grids is what would have taken value out of F1.

A billboard facing the highway holds the same marketing "value" regardless of what the person paid to advertise their product on it, the same number of eyes fall upon it. Same for F1, the winning car holds the same number of eyeballs regardless of how much it cost to be made/developed, anyone argueing any different is a liar, most probably a professional one, in the field of marketing.

To those who might be rather new to this forum, Islamatron's style is to speak in absolutes ("all of them are BS actually"), then call names at anyone who might have the temerity to disagree ("anyone argueing any different is a liar"). His comments above, like so many others, are simply untrue.

[modbaraban]

It's true that Toyota, Bridgestone, BMW and Honda left: I think that tells us someting about car manufacturers and F1: it's the end of an era. FOTA is out.

It tells us something we already knew - F1 losing the status of the technological pinnacle. Toyota came in 2002 as the 'arms race' of F1 was near its peak. And they came to showcase their technological superiority, winning it with their massive resources. They ended up shelling half a billion per year for being average in a glamorous and overly complicated spec. series.
They can win WRC and Le Mans at a fraction of that cost and actually showcase something relevant to what they sell.

[donskar]

Cost is real, "value" is subjective... the BS marketing firm is selling a load of crap... The "value" of Brawn's "marketing" is exactly what they were paid for it(Virgin paid about 400K per race). If the value was any more than that the BS marketing firm(all of them are BS actually) sure did miss out on a huge commission. Instead of making up imaginary numbers they should have been lining up sponsors.

The Budget cap would have in no way "taken value out" of F1... that is just more marketing BS... 18 or less car grids is what would have taken value out of F1.

A billboard facing the highway holds the same marketing "value" regardless of what the person paid to advertise their product on it, the same number of eyes fall upon it. Same for F1, the winning car holds the same number of eyeballs regardless of how much it cost to be made/developed, anyone argueing any different is a liar, most probably a professional one, in the field of marketing.

It's a common mistake to equate value and cost; but they aren't the same, and are not necessarily even related. If a shirt costs $50, that doesn't mean it has a $50 value to me. If it does and I have the money, I might buy it; but if it doesn't I won't. The guy next to me however might value the shirt at $70, so for him its quite a bargain. Cost can certainly affect perceived value, of course. I know a little about wine, for example; but not enough to properly value the wines offered on a restaurant's wine list, especially if I don't recognize any of those offered. So I default to the optimistic belief that the price of the wines accurately reflects their quality. That, or I'll sheepishly admit my ignorance to the waiter, in the slightly-less-irrational belief that he will point me to the best value for my money rather than to the wine the restaurant bought too much of or gets the best margin from.

An object's value is also affected by things with which it is associated. A shirt sold at Wal Mart will have less perceived value than the exact same shirt sold at Ralph Lauren. Likewise, a brand of wine will have less perceived value when advertised on a billboard in a poor neighborhood than when advertised on one in a fancy shopping district. It's irrational, but we're all victims - marketers might trade in BS, but their industry is far from being BS itself.

And it's frightfully easy to destroy value. Levi's jeans is the great example of that. They used to be considered the epitome of what a pair of jeans was supposed to be, and had everything going for them - so much so that the only real competitors they had were in the lower end of the market. Then some bright MBA piped up and said that they would all be sailing magayachts if they cut costs and allowed Wal Mart to carry their products. They did, and long story short, practically overnight their brand's value was utterly destroyed and it almost took the company with it. Today, they are considered a low end commodity product, while countless others have sprung up to fill the void at the top.

Almost every market has a structure like this. If a company wants to enter a market, it has to decide how to position itself based on where it thinks the best profits are to be found - is it low-margin, high volume; or high margin, low volume? Do you want to be Nokia, with 26% of the smartphone market; or Apple, with just 8%? (answer: Apple)

F1 is obviously one of those elite brands. It's value in that respect depends on both concrete and ethereal factors. Sure, there's the direct value of the sheer number of eyes watching, but there is also the value that each set of eyes assigns to what they see. Because F1 is considered the pinnacle of motorsport, those who participate in it - be they a sponsor, competitor, or venue - take on the same cachet. And the more elite we perceive the sport itself, the more elite we perceive those who participate. Obviously, there is a perfect synergy then between the sport and sponsors like TAG, competitors like Ferrari, and venues like Monaco or Abu Dhabi - products that trade almost entirely on their exclusivity. Then there are those who want to capitalize on the sport's ravenous competition that all that money fosters - brands like BMW or Bridgestone for example, who want their products to be perceived as technically superior. The flip side is that there are brands which would gain little from associating themselves with the sport.

Here's an interesting set of stats to ponder. Surveys of NASCAR show that 72% of the fans would 'almost always' or 'frequently' purchase brands that are associated with the sport. The same survey of F1 fans? 28% In fact, more F1 fans would 'almost never' choose the F1 sponsor (32%) than would choose it! The reason for this isn't that NASCAR fans are somehow more loyal than F1 fans, but rather that F1 sponsors are advertising to a smaller, wealthier percentage of their audience. The rest of us are just voyeurs. Someday, right?

So this is why I'm bewildered at the FIA's stance on lowering the cost of the sport. When you lower the cost and reduce the technology, you eliminate the two primary factors in setting the sport's perceived value. The same number of people might watch and attend - perhaps even more - but they won't perceive the sport and those who participate in the same way. You've screwed the sport's fundamental economy. If F1 isn't the most expensive, technologically advanced and therefore competitive form of racing, then what is it? Just another series like any other. Take it down market, and be ready to suffer a similar fate as Levi's. It would survive, of course; and the sport that emerged might be the same or even more enjoyable to many of us. But it's position as the best of the best will be threatened.

Think about it. If right now, Ferrari, Mercedes, McLaren and Renault left F1 and instead focused entirely on LeMans prototypes, spending outrageous amounts, hiring the best drivers, etc., leaving F1 with budget caps and spec Cosworth engines, would you still consider F1 to be the pinnacle of motor racing? Hardly.

Outstanding post, Pup. Very perceptive.

F1 will be the pinnacle or it will be replaced by a class that is. Humans crave the ultimate in all endeavors. Fans, sponsors, entrants gravitate that way.

I root for the underdog (usually), so I understand the romantic notion that less will be more. Let's examine the assumption that less money will guarantee more creativity: do some of us assume McLaren and Ferrari employ mediocre, run-of-the-mill engineers? Why will less money guarantee brilliant solutions? How will less investment ensure technial advances? How will (potentially) pushing F1 down closer to cheaper, less glamorous classes enhance its success and attractiveness to fans, sponsors, and entrants?

[Pup]

All nicely said, only that you don't address the points you quoted in the first place.

F1 isn't just a business. It is owned by the FIA which represents the organized motorists and motor sport aficionados around the world. The business side is rented out but the FIA still has the right and obligation to direct the sport in accordance with their philosophy. So an element of common good is certainly involved, it is just not a socialist philosophy rather than the spirit of welfare of all motorists. This is why we will see an increasing element of sustainability and common sense beyond just making money. Left to Bernie and Montezemolo we would not have any new teams on the grid and the rules would eternally be made to suit Ferrari. I hope that Todt will continue a course of FIA independance once he identifies with his new team.

I don't know what you mean about not addressing the quote.

Technically, you are right that the FIA owns the trademark to F1. But as rjsa pointed out, we all know that they abandoned any practical value of that trademark when they gave the commercial rights to Bernie.

On the other hand, your bit about F1 owing some sort of duty to the 'spirit and welfare of all motorists' has brought a tear to my eye. Really, I'm moved.

[Pup]

Outstanding post, Pup. Very perceptive.

F1 will be the pinnacle or it will be replaced by a class that is. Humans crave the ultimate in all endeavors. Fans, sponsors, entrants gravitate that way.

I root for the underdog (usually), so I understand the romantic notion that less will be more. Let's examine the assumption that less money will guarantee more creativity: do some of us assume McLaren and Ferrari employ mediocre, run-of-the-mill engineers? Why will less money guarantee brilliant solutions? How will less investment ensure technial advances? How will (potentially) pushing F1 down closer to cheaper, less glamorous classes enhance its success and attractiveness to fans, sponsors, and entrants?

Thanks, and I'll second your point as well. It's a bit silly to think that restricting budgets will somehow unleash some pent up supply of creativity; as if engineers have been hoarding their clever ideas for a day when budgets are finally capped.

You know, it wasn't too long ago when F1 was in fact losing it's position in the racing world. Group C was once just as popular, was growing at a faster rate than F1, and was manufacturer backed. Then Max neutered the series, and the manufacturers headed to F1. Thus began F1's modern era. The coincidental timing of that to the placement of F1's commercial rights into Ecclestone's hands was surely just that - coincidental.

My point being that the public perception of the importance of any racing series is largely, though certainly not exclusively, tied to manufacturer participation.

[ISLAMATRON]

Outstanding post, Pup. Very perceptive.

F1 will be the pinnacle or it will be replaced by a class that is. Humans crave the ultimate in all endeavors. Fans, sponsors, entrants gravitate that way.

I root for the underdog (usually), so I understand the romantic notion that less will be more. Let's examine the assumption that less money will guarantee more creativity: do some of us assume McLaren and Ferrari employ mediocre, run-of-the-mill engineers? Why will less money guarantee brilliant solutions? How will less investment ensure technial advances? How will (potentially) pushing F1 down closer to cheaper, less glamorous classes enhance its success and attractiveness to fans, sponsors, and entrants?

Thanks, and I'll second your point as well. It's a bit silly to think that restricting budgets will somehow unleash some pent up supply of creativity; as if engineers have been hoarding their clever ideas for a day when budgets are finally capped.

All your posts and all your ideas are based on the assumption that the technical rules would remain constrained when the budget was capped which we all know was not the truth. Stop bending the truth to fit your warped view of reality. When the budget was proposed the same rules package allowed for unlimited revs, double the KERS, HERS, AWD, moveable aero and several other opening of the technical regs... but clearly you ignore that because it does not help your false accusations.

[Pup]

Am I making accusations?

I think you're mistaking my argument as being specific to a particular proposal. It's not - I'm talking in generalities, as I believe we all are. I think both donskar and I were responding to this post...

Budget caps don't limit innovation. If anything, they encourage it. Can't just throw money at the problem then.. have to creatively make the most of what you have...

...which I think is incorrect. I'd love to have simpler, less restrictive regulations, which I agree would provide better opportunities for smaller teams to find clever solutions. But that effect is completely independent of any budget cap, outside of the specific proposal you mentioned.

edit: donskar, not donkster. sorry.

[WhiteBlue]

Why Ferrari is tough on the small teams
November 6, 2009 by joesaward
The other day, in an apparently idiosyncratic press statement, Ferrari poured doubts on the viability of the Manor, Lotus, USF1 and Campos Meta Formula 1 teams. The Italian team said that just because the same number of teams were sitting around the table did not mean that they had the same quality. In some respects that is a fair point but it hardly seems like something that the team that leads FOTA should be saying. Surely, it is in FOTA’s interest to talk up the new teams rather than talking them down?

“We must also wait and see just how many of them will really be there on the grid for the first race of next season in Bahrain and how many will still be there at the end of 2010,” Ferrari said.

Hmmm…

And then today Ferrari boss Luca di Montezemolo is again talking about teams running three cars. What is that all about when there are, in theory at least, 26 cars on the grid next year?

The answer is obvious if you ever study Machiavelli. And it explains exactly what is going on at a political level in Formula 1. In the same statement Ferrari hinted that the reason that manufacturers are withdrawing from F1 is because of Bernie Ecclestone and Max Mosley. Ferrari did not name names but the implication was thicker than icing on a wedding cake. The team seems to believe that Mosley and Ecclestone drove the manufacturers out of the sport in an effort to break the power of FOTA. With a group of strong manufacturer-led teams working together, FOTA was strong. With a bunch of weak new teams, FOTA is not. All it takes is one of the new teams borrowing some money from Ecclestone and he will have power to influence FOTA. In the old days that was a role that was consistently filled by Flavio Briatore but the Italian started believing in the power of FOTA and saw an opportunity to take over from Ecclestone. The end result of this was that he fell from a very great height because he got caught doing something wrong and suddenly found that he had no friends at all. It was a long drop and a painful thud at the bottom.

The chances are that some of the new teams (and perhaps even some of the older ones as well) will end up being beholden to Mr E and that, therefore, is the danger for FOTA. So, strange that it may seem, it is actually better for Ferrari and others to try to talk down the new teams so that they fail and thus do not get a voice in FOTA business. If the numbers of cars falls too far, then three-car teams is the answer…

Are you following me?

FOTA had no say in which new teams were picked for 2010. However there are ways of dealing with the weak and feeble that the Spartans employed centuries ago: there was no coddling, if a child was weak it was left out at night on a hillside. Only the strong survived. Children were treated harshly to toughen them: they were beaten, made to march without shoes and forced to go without food. To survive they had to be tough. Clearly this is Ferrari’s belief.

Watch out too for the teams moving closer to the FIA. The federation has a new boss and he has campaigned saying that he will make the sport better and stronger. This means that ultimately he will try to get more money flowing into the sport and less going out. CVC Capital Partners is taking 50% of F1’s income and is giving it to banks. They are in it for the money and they have taken plenty already. They want more. The problem they face is that at the end of the new Concorde Agreement in 2012 the teams are pretty keen to cut back CVC’s take from 50% to around 15%, which is a much more sensible figure. The only way that CVC can hope to keep its current slice of the pie is if the teams are divided and conquered and so it is fair to suggest that the primary goal of CVC and its lieutenants in the next few years will be to break the power of the teams. The teams know this and they understand the dangers. In the circumstances they need to accept the losses that happen; they need to avoid getting allied with weaklings and they need to find strong new friends.

Looking into the crystal ball, I see the teams and the FIA working together to win the sport back from the financiers…

Convoluted? No, just business.

Saward certainly picked up some interesting points there. It is logical that the FIA and FOTA share an interest in cutting CVC's share of the FOM profits. Fifty percent sounds pretty outrageous. 15 looks nicer indeed.

The FIA has the power to screw CVC's exit strategy by their veto and letting that intention leak to financial circles will go a long way towards rectifying a very unpleasant currrent situation.

The explanation for Ferrari's opposition to new teams sounds somewhat lame. Ferrari do not want to compete the hard way but by every cheat or secret vetoed rule they can get. So the FIA is well advised to kepp filling the grid with independant teams and make sure they have an independend engine supply. It looks like this is developing rahter nicely.

[WhiteBlue]

Why Ferrari is tough on the small teams
November 6, 2009 by joesaward
The other day, in an apparently idiosyncratic press statement, Ferrari poured doubts on the viability of the Manor, Lotus, USF1 and Campos Meta Formula 1 teams. The Italian team said that just because the same number of teams were sitting around the table did not mean that they had the same quality. In some respects that is a fair point but it hardly seems like something that the team that leads FOTA should be saying. Surely, it is in FOTA’s interest to talk up the new teams rather than talking them down?

“We must also wait and see just how many of them will really be there on the grid for the first race of next season in Bahrain and how many will still be there at the end of 2010,” Ferrari said.

Hmmm…

And then today Ferrari boss Luca di Montezemolo is again talking about teams running three cars. What is that all about when there are, in theory at least, 26 cars on the grid next year?

The answer is obvious if you ever study Machiavelli. And it explains exactly what is going on at a political level in Formula 1. In the same statement Ferrari hinted that the reason that manufacturers are withdrawing from F1 is because of Bernie Ecclestone and Max Mosley. Ferrari did not name names but the implication was thicker than icing on a wedding cake. The team seems to believe that Mosley and Ecclestone drove the manufacturers out of the sport in an effort to break the power of FOTA. With a group of strong manufacturer-led teams working together, FOTA was strong. With a bunch of weak new teams, FOTA is not. All it takes is one of the new teams borrowing some money from Ecclestone and he will have power to influence FOTA. In the old days that was a role that was consistently filled by Flavio Briatore but the Italian started believing in the power of FOTA and saw an opportunity to take over from Ecclestone. The end result of this was that he fell from a very great height because he got caught doing something wrong and suddenly found that he had no friends at all. It was a long drop and a painful thud at the bottom.

The chances are that some of the new teams (and perhaps even some of the older ones as well) will end up being beholden to Mr E and that, therefore, is the danger for FOTA. So, strange that it may seem, it is actually better for Ferrari and others to try to talk down the new teams so that they fail and thus do not get a voice in FOTA business. If the numbers of cars falls too far, then three-car teams is the answer…

Are you following me?

FOTA had no say in which new teams were picked for 2010. However there are ways of dealing with the weak and feeble that the Spartans employed centuries ago: there was no coddling, if a child was weak it was left out at night on a hillside. Only the strong survived. Children were treated harshly to toughen them: they were beaten, made to march without shoes and forced to go without food. To survive they had to be tough. Clearly this is Ferrari’s belief.

Watch out too for the teams moving closer to the FIA. The federation has a new boss and he has campaigned saying that he will make the sport better and stronger. This means that ultimately he will try to get more money flowing into the sport and less going out. CVC Capital Partners is taking 50% of F1’s income and is giving it to banks. They are in it for the money and they have taken plenty already. They want more. The problem they face is that at the end of the new Concorde Agreement in 2012 the teams are pretty keen to cut back CVC’s take from 50% to around 15%, which is a much more sensible figure. The only way that CVC can hope to keep its current slice of the pie is if the teams are divided and conquered and so it is fair to suggest that the primary goal of CVC and its lieutenants in the next few years will be to break the power of the teams. The teams know this and they understand the dangers. In the circumstances they need to accept the losses that happen; they need to avoid getting allied with weaklings and they need to find strong new friends.

Looking into the crystal ball, I see the teams and the FIA working together to win the sport back from the financiers…

Convoluted? No, just business.

Saward certainly picked up some interesting points there. It is logical that the FIA and FOTA share an interest in cutting CVC's share of the FOM profits. Fifty percent sounds pretty outrageous. 15 looks nicer indeed.

The FIA has the power to screw CVC's exit strategy by their veto and letting that intention leak to financial circles will go a long way towards rectifying a very unpleasant currrent situation.

The explanation for Ferrari's opposition to new teams sounds somewhat lame. Ferrari do not want to compete the hard way but by every cheat or secret vetoed rule they can get. So the FIA is well advised to kepp filling the grid with independant teams and make sure they have an independant engine supply. It looks like this is developing rather nicely.

[timbo]

The explanation for Ferrari's opposition to new teams sounds somewhat lame. Ferrari do not want to compete the hard way but by every cheat or secret vetoed rule they can get. So the FIA is well advised to kepp filling the grid with independant teams and make sure they have an independant engine supply. It looks like this is developing rather nicely.

That way they should hail Toyota's exit. Are you expecting any of new teams to be tougher competition to Ferrari than Toyota on track?

[gcdugas]

Max said he would run again but this ruffled the feathers of FOTA as an actionable breach and most teams hadn’t signed a thing at that time. Then Toyota signed the new Concorde Agreement when Max was at his nadir. Soon after that Max got his puppet/clone Jean Todt to run. In a swift aggressive move Max unilaterally inserted the Lola team to preempt Sauber/Ferrari and further dilute FOTA. Toyota’s departure has more to do with Todt’s victory and the continuation of the hostile tactics of the old guard power structure than anything else.

The modus operundi of the Max/Bernie power structure, now Jean/Bernie power structure, is to rob the teams of any determinative voice by hostile means. By design they are diluting FOTA with weak teams who are dependent upon Bernie’s checks for survival. These new teams, and Cosworth will live under the capricious whims of Bernie/Jean. They are born slaves with no hope of ever gaining independence because their entire existence will be metered by Bernie’s checkbook. Bernie knows he can starve a team by slow paying and he knows he can further enslave a team by financial advances like he did with Williams. Only the manufacturer teams had the muscle to stand up to this corrupt tyrannical regime. And that is why they must be driven out.

It is too bad that long ago Bernie subscribed to Max’s adversarial governance philosophy. F1 could have been much greater if they just took a cooperative approach such as we see in NASCAR. Even though the France family rules it in an unchallenged way, they only hold onto 15-20% of the money after a generous distribution. They make sure ticket prices are within reach of the fans. The track owners aren’t starved. The fans aren’t shielded from meaningful contact with the teams and drivers. NASCAR is a spec series and with push rods and carburetors they make no pretense of being technology oriented. But NASCAR knows that good relations with the teams, with the manufacturers, with the fans and with the media are all vital to the health of the series. Bernie and Max have no regard for any of this.

F1 is sadly killing all its claim to technology with specs that regulate 99% of the car. LMP is rightfully the new home of automotive technologies. F1 is losing the plot because of Bernie’s greed and Max’s power lust.

FOTA made the same mistake as did the GPMA. They wimped out and now F1 may soon die because of it. Is that a drastic statement? Well let us examine it. In two or three years time half the grid will be Cosworth kit car teams. The std. ECU will remain. 99% of the chassis is regulated. Standard tires will remain. There may even be another push for the so-called "world" engine. KERS, if it is to be used, will be standardized. Renault will surely leave F1 before long and go on to LMP with Peugeot, Porsche, and Audi. F1 will be of limited interest to engineers and real racers. Even now F1 is a "cut flower". It looks vibrant but it really died when it was snipped from the stem. What we see now are the first few petals browning at the edges. Soon more petals will fall off and all will see its lack of sustainable life.

F1’s prestige is rapidly fading with endless court cases, scandals and disputes. Not to mention abandoning key markets like North America, France, soon to be GB after leaving Austria in 2004. Japan is now not represented in any meaningful way once Bridgestone leaves next year. Pay no attention to those empty seats. LMP on the other hand is experiencing a revival. But, hey… nothing is wrong. Move along now.