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F1 Standoff Update: Mosley drops two-tier system, Ferrari takes FIA to court

Discussion in 'F1' started by jk0001, May 18, 2009.

  1. jk0001

    jk0001 F1 Veteran

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    http://www.autoblog.com/2009/05/17/f1-standoff-update-mosley-drops-two-tier-system-ferrari-takes/


    With the May 29 deadline for registering for the 2010 Formula 1 season fast approaching and the bulk of the current teams threatening to walk out of the series, FIA chief Max Mosley and F1 commercial director Bernie Ecclestone met in London on Friday with the heads of each Formula One team to iron out a deal that would allow the sport to accelerate past the standoff and into the next season. How that meeting went, however, depends on who you ask.


    First of all, both Mosley and Ecclestone confirmed that the proposed two-tier system that would have forced teams to choose between either severe aerodynamic penalties or restrictive budget caps has been scrapped. That was the major sticking point that the Formula One Teams Association and its members (i.e., all the teams currently on the grid) objected to. However, the meeting's conclusion was still described as a stalemate, given that the teams are still threatening to leave and that a substitute for the two-tier system approved by the FIA's World Motorsport Council has not been agreed upon. Mosley proposes a drastic £40 million ($60 million) budget cap to be imposed on all the teams, large or small, veteran or newcomer. While the teams in general agree that a budget cap is logical, they have yet to agree on the amount, while some of the teams are suggesting that other solutions be sought instead.

    The parties are set to meet again this coming Friday in Monte Carlo, ahead of the Monaco Grand Prix, to resume discussions. But Ferrari, for one, is hedging its bets. With Mosley insisting that the sport could do without its longest-standing team, the Scuderia has filed a court injunction against the FIA's regulations. Ferrari is believed to have been given veto power over any substantive regulation changes, a clause that the team says has not been respected. Mosley, in turn, insists that one team cannot dictate the rules of the entire sport. Other Italian sporting bodies have stepped up to back Ferrari, as organizers of Rome's proposed grand prix threaten to cancel the project in the absence of their home team, while the Italian Olympic Committee throws its weight behind Ferrari as well. Maranello's injunction will be heard in court on Tuesday, when we'll find out if the Scuderia has legal backing to its objections. Thanks to Mark for the tip!
     
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  3. RP

    RP F1 World Champ

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    Such a game. I am feelinig more confident that by May 29, every team on the grid today will be participating in 2010.
     
  4. Ambassiatore

    Ambassiatore Formula Junior

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    As predicted.The Italian will be the last man standing.

    ...besides..It was more than a stupid regulation, Ferrari and friends were right not to stand down and play along.

    Time to move on and find our team again
     
  5. RP

    RP F1 World Champ

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    Keep in mind, the two tier proposal was likely never considered as a real proposal by the FIA, I think it is a bargaining tool to attain something more valuable. At then, everyone will be wounded, no winners, but at least some stability for the next two years.
     
  6. Ambassiatore

    Ambassiatore Formula Junior

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    #5 Ambassiatore, May 18, 2009
    Last edited: May 18, 2009
    You are right Ron.

    that was the "prospect" of the regulation, and was more of a result of the Budget cap than a real text rule with two series running along, but if they dont stand together fast when they see this coming...?

    ...then they wake up and is inside the ruling like nothing happened.

    I´m kinda worried about the KERS issue more than any other ruling after this...many have been discussing the real reason to keep on going with the KERS...if they all agree, then, next year will be no KERS and development should be dented...kinda like the diffusers issue.

    Havent heard anything about it lately...that will also affect next years development greatly.
     
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  8. VIZSLA

    VIZSLA Four Time F1 World Champ
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    At this point they have more pressing things to resolve than KERS.
    As we approach a resolution it will be focused on the money. Both spending (caps) and revenue (sharing) will be paramount. The details will follow.
     
  9. tifosi12

    tifosi12 Four Time F1 World Champ
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    +1

    Ferrari has been given the right to veto FIA decisions in exchange for dropping out of the GPMA. It is questionable however whether that will hold up in a Euro court of law. Apparently Mad Max doesn't think so, which is why it is going that direction. If he would actually live by his own rules, he would have already listened to Ferrari's veto and moved on. What an absolute idiot.
     
  10. DGS

    DGS Four Time F1 World Champ

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    #8 DGS, May 18, 2009
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    Maybe that's the point of the lawsuit. If Max's obligation doesn't hold up, Ferrari is free to look at a break-away series.

    Between the diffusers and KERS, they already have a two-tier (or three tier) series.

    Add in the good tire/bad tire swap rules, and you have a track full of unequal cars on any given lap.
     
  11. mousecatcher

    mousecatcher Formula 3

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    sounds like genius to me -- get Ferrari to come on board in exchange for a veto which doesn't actually exist. ruthless asshattery, but genius nonetheless. he's also already been using that time honored favorite negotiation tactic of asking for things that you obviously won't get, to give the other side something to focus on for "negotiations". now he looks like he's given in by removing the 2nd tier. all that's left is to figure out what the budget cap will be. (and then there's the team revenue share of course.)

    anyway, i haven't seen the agreement so i won't be so bold as to comment on whether or not Ferrari actually has a valid claim to veto power. so i think it's too early to say whether it's genius or idiocy.
     
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  13. tifosi12

    tifosi12 Four Time F1 World Champ
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    Of course I haven't seen it either, but I would assume it is watertight: It also came bundled with 100 million USD from Bernie of the TV rights pie.

    I don't know the financials of Ferrari, but given all the money/spinoff benefits that comes pouring in because they are in F1 (TV rights, sponsorship money, merchandising revenue, marketing power and exposure, trickle down technology from R&D) there is probably another argument for why it is actually lucrative for the company to stay in F1.
     
  14. Korr

    Korr F1 World Champ
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    Ya, IIRC, Ferrari's F1 effort is self sustaining and requires no funding from FIAT.

    Teams like McLaren and Williams have been losing money for years.
     
  15. mousecatcher

    mousecatcher Formula 3

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    do you (or anyone) have links to articles about team financials? i'd love to read up on it, even if it is (as i suppose) just guesswork.
     
  16. IanMac

    IanMac Formula 3

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    Hopefully at the end of all of this Ferrari's special rights will be removed, on a level playing field no team should have such privileges. Imagine the angst there would be here if it were McLaren who had those rights.
     
  17. Korr

    Korr F1 World Champ
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    I gotta wonder if all this budget cap is just Bernie/CVC leaning on Max so they can reduce payouts to the teams. CVC is under a mountain of debt and no doubt would love to have an extra $150-$200 million a year.
     
  18. of2worlds

    of2worlds F1 World Champ
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    Max claims Ferrari let the veto lapse. Ferrari just sat on their hands and didn't say anything when they had the chance before. As usual the courts will have the final say.
    One thing that was not mentioned; at the start of the friday meeting the Toyota guy wanted all the teams to boycott the meeting and walk out on Max. However the rest simply ignored him and the meeting went on like he wasn't even there...
    CH
     
  19. jknight

    jknight F1 Veteran

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    this was part of an article on crash.net

    Having already engaged in a bitter war of words with Ferrari and FOTA President Luca di Montezemolo, Mosley re-iterated his prior assertion that F1 'could survive' without the only team that has competed in every campaign since the official inception of the world championship all the way back in 1950 – but both he and Ecclestone are equally confident that it will not come to that, with the head of the governing body even going so far as to accuse the scarlet brigade of being afraid of taking on their rivals on a level playing field.

    Moreover, it has been reported that Stefano Domenicali only found out about the injunction by text message during last Friday's FOTA-FIA meeting – a situation Mosley described as almost laughable, with Ecclestone telling British newspaper The Times that Ferrari 'should have [taken the injunction out] before now – idiots'.

    “I thought that was quite original,” Mosley remarked, “to send a team principal in without informing him of his team's intentions. I think he was slightly embarrassed. The idea that they are indispensable is nonsense. It's a little bit like poor [Ayrton] Senna; he was the most important driver in 1994, but when he very sadly got killed Formula 1 went on. Lotus were very important once too; so were Brabham.


    * * * *
    If this is in fact true about Domenicali - it certainly shows what an "idiot" he really is not knowing what "his" team is doing..... definitely long past his use by date.

    Carol
     
  20. VIZSLA

    VIZSLA Four Time F1 World Champ
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    Says more about what the team thinks of him. Either that or they're so F'd up that one hand doesn't know what the other is doing.
     
  21. Modeler

    Modeler F1 Veteran

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    Luca di setting up a scapegoat to take any adverse fallout from how this all plays out, perhaps, carol.
    He's known about the injunction but has let Domencalli slip out of the loop.
     
  22. kraftwerk

    kraftwerk Two Time F1 World Champ

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    #19 kraftwerk, May 19, 2009
    Last edited: May 19, 2009
    I found this, it's a good read, I have posted it here because I'am sick of the amount of NEW THREADS about it why it all can't be kept in 1 is mind numbing to me.

    The meeting between the Formula 1 teams, the FIA and Bernie Ecclestone in London on Friday was billed as being an opportunity for all concerned to find a solution to the budget-capping problem. In the end, however, it appears to have turned into something rather more serious with Ferrari lawyers in France applying for an injunction to stop the FIA from going ahead with its plans. The legal argument is apparently based on an agreement that was made in January 2005 between Ferrari, the FIA and Formula One Management. A press release was issued at the time which said that “the FIA, Formula One Management and Ferrari have agreed to prolong the Concorde Agreement for the period 2008 to 2012″ and quoted Max Mosley, Bernie Ecclestone and Luca di Montezemolo all saying that the agreement would stabilise Formula 1.

    The details of this agreement have never been made public but it seems that it included not only a substantial payment each year to Ferrari, but also a veto on the technical regulations in the future. According to our sources, the document even stated that if the new agreement was not validated by all the other teams, the old Concorde Agreement would prevail.

    If that was the case, therefore, Max Mosley does not have the right to make any rules and regulations without the Formula 1 Commission being involved. This body has not met for several years.

    Whatever the details, Ferrari lawyers must believe that they have a good case.

    We hear that Mosley was relatively conciliatory in the course of the meeting. Whether or not the manufacturers will be satisfied with a compromise on the budget cap remains to be seen.

    The meeting was not attended by Ferrari and FOTA chairman Luca di Montezemolo because of the death of his father. Ferrari was thus represented by team principal Stefano Domenicali.
     
  23. kraftwerk

    kraftwerk Two Time F1 World Champ

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    #20 kraftwerk, May 19, 2009
    Last edited: May 19, 2009
    From the same guy Joe Sawards, one for you Dave (Vizsla) long but excellent read IMO.
    And to think Max hammered Mclaren for bringing the sport in disrepute what a Joke.

    ---------------------------------------------------------------------------------------------------------

    Seeing through the smokescreens
    May 13, 2009 by joesaward

    The news that Ferrari and others are not going to enter the 2010 World Championship has provided plenty of copy for the sport’s journalists. There are plenty of smokescreens to be seen through here. If everyone is going to have the same smaller budget in the future, what is the problem? It is not about job losses. As FIA President Max Mosley says, if he does nothing jobs will be lost as teams close. Is it that Ferrari enjoys an unfair advantage at the moment and wants to continue to have that? Or is it that some of the teams simply do not want anyone to have access to their financial information because they have things to hide? Could it be that some of the car manufacturers are going to use the issue to leave F1 because they cannot afford it or because they cannot be competitive? These are all explanations that are flying around. Is it about Max Mosley defending the institution of the FIA or about his own need to be powerful? Similarly, is the Formula One Teams’ Association simply a vehicle for Luca di Montezemolo or Ron Dennis to win battles?
    It is a complex business.
    But it is not new. Enzo Ferrari had a habit of announcing that he was pulling out of Formula 1 whenever he needed something that he could not have. The mercurial team boss used this tactic to good effect on many occasions, working on the theory that the power of Ferrari’s box office clout would allow him to get what he wanted. It usually worked. However, in 1964 Enzo wanted the Ferrari 250LM homologated in the GT class for Le Mans. The FIA refused and in the dispute that followed Ferrari lost his competition license. At the end of that season the Ferrari F1 team entered two Grands Prix in the blue and white livery of Luigi Chinetti’s North American Racing Team. In the end Ferrari had to back down on that one.
    In the 1980s, however, FIA President Jean-Marie Balestre tried to push Ferrari around over engine regulations and in the summer of 1985 Enzo threatened to withdraw from F1 and switch to Indycar racing. To make the point Ferrari sent his sporting director Marco Piccinini to an Indycar race at Michigan and soon afterwards “spies” spotted Indycar team owner Jim Trueman and his crew chief Steve Horne visiting Maranello. Soon after that Truesports driver Bobby Rahal and Ferrari driver Michele Alboreto both tested a March-Cosworth 85C at Fiorano. Enzo
    Enzo then hired designer Gustav Brunner to design and build the Ferrari Indycar, which was designated the 637. That car never raced but a compromise was sorted out that allowed Ferrari to stick with its engines longer than the FIA had wanted. Much of the Ferrari Indycar technology was ultimately used by Alfa Romeo in its unsuccessful Indycar programme between 1989 and 1991. On that occasion, therefore, Ferrari did get some of what it wanted.
    When Luca di Montezemolo took over as head of Ferrari he soon began to use the power that Ferrari has. As early as February 1993 he threatened to pull Ferrari out of F1, arguing that the sport needed to use technology that would be more useful in road cars. He called for restrictions on technology and cuts in costs and he got some of that as the FIA soon began thinking along the same lines. Since then it has served Ferrari’s purpose to be aligned with the FIA.
    It is worth noting that in 2004 Montezemolo gave up the day-to-day running of Ferrari, handing it all over to Jean Todt, so that he could move to Rome and run Confindustria. He returned in May last year and two months later he was the force behind the establishment of FOTA. One could thus conclude if one wanted to that Montezemolo is FOTA and that he wants to achieve what the Formula One Constructors Association (FOCA) failed to achieve back in 1980-1982 when they tried to win control of the sport. That battle was a draw, with FOCA winning the right to exploit the commercial rights of the sport, on behalf of the FIA, but the FIA retaining control of the rule-making and the policing of the sport. Since then the stucture has changed somewhat. The commercial rights devolved from the teams to Bernie Ecclestone’s private empire, while Max Mosley moved from being a champion of FOCA to becoming head of the FIA. In signing a 100-year contract with Ecclestone, the FIA recognised Ecclestone’s right to exploit the commercial rights of F1, thus cutting the teams out of the loop. They were bullied or bought off at the time but the problem was going to come back again because the split of revenues was always going to be a problem. FOTA is the embodiment of a desire to take things back to a structure which gave the teams the right share of the business. FOTA has been working quietly to improve the sport, introducing its own cost-cutting measures back in December. The FIA budget cap is perhaps a good idea but the teams all disagree on how high it should be and when it should be introduced.
    However, they know that if they are divided they will have no power at all.
    My view is that the threat to quit F1 is a sign that there are bigger issues that need to be addressed. This is an opportunity to question the way the FIA operates and the relationship that exists between the federation of the Formula One group, which allows so much of the money generated to leave the sport. Mosley says he is defending the power of the FIA as an independent arbitrator for the sport and, at the same time, trying to build a better F1 for the future. These are noble goals, but some people do not believe that this is his only motivation. Mosley may even agree with the teams on the question of the distribution of wealth (he has hinted at that before) but his view seems to be that it is better to fight one battle at a time. He talks of bringing in new teams and new technologies, which is terrific except that there is only one serious new team under discussion and I would say that sacrificing the manufacturers in order to get USF1 and maybe David Richards, Lola and whoever is not a worthy argument.
    Formula 1 is a world filled with good brains and we hope that the best will come together to find a suitable solution that safeguards the sport, preserves an independent governing body and splits the revenues fairly between all of those who are involved in the sport.
     
  24. VIZSLA

    VIZSLA Four Time F1 World Champ
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    Well that explains why Domenicali was blind-sided at the meeting.
     
  25. VIZSLA

    VIZSLA Four Time F1 World Champ
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    I am shocked, shocked I say, to hear someone claim that some of this bickering might be about money!
    We all know that all parties involved have only the good of the sport in mind and are willing to put personal interest and gain aside.
    Excuse me now as I have to join the other monks in prayer.
    :)
     
  26. regaliaconcours

    regaliaconcours Formula Junior

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    Good minds, maybe? Tremendous ego's, definitely! I'm betting on the ego's to F things up for a while! Afterall Concorde and money distribution is still on the horizon and neither side is going to hand the other anything easily. The only real question here is how united is FOTA? If they are truely ONE Bernie and Max will have no other choice but to cave. The very BIG difference betwee the manufacture teams and the lesser independent teams is that they actually sell cars to the world, and the reach they have because of this gives them a tremendous amount of power when it comes to large corporate sponsorship money. Without these teams F1 is a second rate series. Even if the racing were great, the major corporate sponsors would not care in the least because the world wide reach would no longer be there for them. Perception is EVERYTHING and for the corporate giants the perception would be that F1 is NOT the same without the manufacturers present.
     
  27. kraftwerk

    kraftwerk Two Time F1 World Champ

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    Yep I knew that though.

    LOL I bet you are!!... too true, say a prayer for me mate..;)

    Yep, Seems to me this could get worse before it gets better, someone has to back down, and your right to ask about how united is the FOTA, but it seems :One could thus conclude if one wanted to that Montezemolo is FOTA and that he wants to achieve what the Formula One Constructors Association (FOCA) failed to achieve back in 1980-1982.
     
  28. tifosi12

    tifosi12 Four Time F1 World Champ
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    You have a point, but I disagree (because I am wearing red tinted glasses after all):

    Ferrari does have a priviledged position within F1 simply because they have been in it for all these years (which is also why they shouldn't just foolishly drop it because they have bad year). And their veto power is currently the only thing stopping Mad Max from raping the manufacturers (remember how nice it was when his mind was on the real thing instead? but I digress...:)).

    And don't misinterpret the Ferrari right: It is simply a veto to block a decision. Doesn't mean they have a special right to anything else (although sometimes it sure likes like that <cough Fuji 08>).
     

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