The future of F1 - My top 10 predictions ***SPOILERS***

I thought the 2010 cars were virtually the same as 2010, things like refueling change. I believe KERS is still optional. But I do believe FOTA will get its way on some important things, namely a stable realistic method of implementing new rules.

At this point, FOTA says no rules changes from 2009, FIA says unrealistic budgets caps in 2010. Both are rigid uncompromising positions.

Gotta be a middle ground, somebody has to make the first realistic move. As a fan, I would hope its FOTA.

 

No apologies needed Ron. I was being light with you as well. The "flaming comment" was just me commenting on how there are some on here who don't approve of posters using derogatory names like Alonshole, Pornomaxx, Nascrap...etc. For some reason I thought you were one who said they didn't appreciate that kind of posting and would rather a poster use the proper names instead of the derogatory ones. My bad.

 

The ACEA represents BMW Group, DAF Trucks, Daimler, FIAT Group, Ford of Europe, General Motors Europe, Jaguar Land Rover, MAN Nutzfahrzeuge, Porsche, PSA Peugeot Citroën, Renault, Scania, Toyota Motor Europe, Volkswagen and Volvo.

Google it I have no time to explain.

 

My misunderstanding, sorry.

 

http://en.f1-live.com/f1/en/headlines/news/detail/090612205814.shtml

 

Thanks Tony..

ACEA has come to the conclusion that the FIA needs a modernised and transparent governance system and processes, including the revision of its constitution, to ensure the voice of its members, worldwide motorsport competitors and motorists are properly reflected."

Yes Sir indeed, are you listening Mosley well deal with it.

Now where is that skunk Bernie..

 

Seems like the FIA's troubles are beginning to spread beyond motor sport. As I remember they did not take a stand when Max had his personal difficulties last year.
Seems like Mr E. is playing it smart by keeping his head down and his mouth shut (in public at least).

 

I thought F1 was nothing BUT politics ?

Sure seems like it.

I agree with all points except 6) and 9)

 

Actually Mosley was given some sort of vote of confidence within the FIA by a decent margin. And Bernie has come out in public telling FOTA he will take legal action if they go breakaway and try to seduce some of his contractual entities.

If I don't take emotional sides, I do not see Bernie or Max in the weak position. FOTA has found it necessary to hire some interesting support, that could be a sign either way of their position. Irrespective, I do not underestimate Bernie or Max. Not an opinion of support, just from my contractual experience, from what has been made public, FOTA does not appear to be in a good position. There are those pesky sponsor contracts, not to mention the ones with the FIA.

Surprises can happen.

 

Surprises will happen
My point was that there seems to be new external sources of pressure on the FIA.
Maybe I'm drawing too many inferences but Mr E. seems to be making only the minimum of comments to the press none of which have anything substantive to do with the FOM's end of the negotiations.
Again all those involved are feeding the press only what suits their purposes and we shouldn't be taking anything said on face value.

 

That vote of confidence was a joke. He lobbied the smaller clubs who hold a disproportionate percentage of the vote with regards to the size of their membership. Whatever sweeteners he offered them worked and he won their votes. The larger clubs, representing the vast majority of the total membership, were strongly against him, but only had one vote each.

As far as I'm concerned his current position is not legitimate.

 

Here is my prediction:

The global economy will bounce back sooner than everyone thinks, thanks to the raging bull markets and rapidly recovering BRIC countries. Investors will continue to pile in trying to cover their losses from Q3/08 driving the market up even further. Corporations will capitalize on their rising stock prices with more easy money, through stock offerings to a hungry debt market flush with government top-ups. Corporate cash will begin flowing again back in to F1 sponsorship in late 2009 after everyone agrees to a cap of $100 million. Nobody will really leave the sport except Bernie's wife who will marry Max in a ceremony aboard Flavio's new yacht that he purchased after taking his cut from the upcoming, blockbuster Alonso-Ferrari deal.

Oh ya, Bernie will travel to Russia to do a deal with Vladimir Putin but he will never return due to being mistaken for a Russian gnome. Bernie will last be seen mounted on the dash of a 20 year old Lada driven by Jackie Stewart (laughing hysterically) while circling Red Square chugging a Red Bull.

Just my 2 cents worth.

Cheers-Colin Firth-Ontario Canada

 

It's easy to place all the blame on George W. because Dems are in power now, however if you look at the facts both parties are just as wrong and it just may be that the Dems have much more blame to take the W. Ever heard of Fannie May and Fredy Mac? Dems refused to allow further regulations against them in 2002 because Dems family, friends and constituants were given great paying jobs in the firms. Many of those jobs were made up bogus jobs that didn't even require work. Housing, unless we all forgot allready was the biggest cause of the financial bubble. Everything else stemmed from that.

 

Sorry but this "raging bull market" is just a dead cat bounce and is already loosing steam showing a top has been made. I have shorts in play now. I could be wrong this could be a pause for another run up. We better hope that is not the case because the next fall will be even more severe. If you look at the Great Depression there were six of these and this one matches up exactly with a dead cat bounce. Within the next couple of months will be another big slide down with most likely a pause at the last lows, then a further low about 25% beyond the last. No market goes straight up or down. California is less than 50 days to insolvancy. There are about 6 other states that are less than a year behind them and if Cali goes insolvent we will see another major panic.

By now means am I berating you, I am just wondering where growth is going to come from? Taxes are being raised all around the world because of a huge loss of tax revenue, and taxes are like weeds around a budding tree. Taxes are going to choke any real chance of a quick turnaround even if some real growth comes out of the woodwork.

Anyway, back to Ferrari's and this thread about F1. I truly believe that no matter what F1 has severly hurt themselves. If I was an advertiser I would seriously think twice about advertising with F1 because it is too unstable now with the fighting going on. This isn't over. Of course contracts are in play, but I doubt there are going to be very many new advertisers risking big bucks. Just my thoughts.

 

100% Correct, flew them in from far flung places and wined and dined em it was a joke.

 

Yes it was...and yes he is.

 

No worries Forexpreneur, I don't consider your opposite opinion to be berating me. We are all entitled to our owner perspective. I am sure that my reply will let loose some more pointed and berating replies

Dead cat bounce? Perhaps, but we won't know if this is the case until it happens, if it does.

Your guess is as good as mine and they are both just guesses at this point but using a widely accepted base measurement like the LIBOR spread, it appears the worst is behind us. Without a strong and confident banking system, we are on shaky ground as we saw over the past nine months.

The reality is that every day, less and less people are calling for another catastrophic collapse and that alone is a good sign since confidence drives the markets as much as fundamentals and earnings. Hell, we are even seeing less posters here on F-chat talking about buying bullets, long-term food supplies and armored vehicles, and while this isn't as global trend indicator as LIBOR, it is a subtle sign that some people are starting to loosen up on the "end of the world theories."

Personally I think another collapse like Q3 is highly unlikely. The big punch with the most damage has already been taken and absorbed. Like any good punch (speaking as a former recreational boxer here) we will feel the pain for a while to come. The big US banks had all that TARP money sitting around instead of lending it as was part of Paulson's original plan, and they just may have used this extra cash to prime the empty carb that started this rally. As much as it is dramatical to compare this to 1929, this pullback is considerably different than any previous drop-offs in the market. This one was all about reckless leverage and over-capacity and questionable financial products that created nothing but losses for holders when the musical chairs game stopped.

Looking back and comparing this shakeout of the global economy to the Great Depression is a bit of a stretch on many fronts. This is a very serious major recession, not the paralyzing depression that the over-zealous media and talking heads tried to convince us was the case as the decline was underway. Blood leads in the media and this included the business press who are known for dramatic statements built around speculation as much as fact. As a member of the media and a keen observer of the industry, I know this fact.

Now, I agree that there are some parallels to be drawn between the two downturns, bank collapses, business failures and job losses, but trying to compare the modern, interconnected world where trading is done 24/7 to the economic environment of eighty years ago is rather like comparing the Pony Express to a Blackberry. (This is where the pessimists amongst us can insert the famous 1905 quote first attributed to George Santayana. "Those who cannot remember the past are condemned to repeat it," but I just don't buy into the selective parallels between the two events as there are far too many differences.)

I ask you this. Where is the depression and complete collapse of the major zombie banks that everyone (including myself) was anticipating back in November and December? There were no major runs on ALL of the banks similar to what happened eighty years ago (except the weak and over-exposed investment houses of Lehman and Bear Stearns. There are no food lines stretching around city blocks dominating the news at this stage, because we have a variety of safety nets today. Citigroup and BOA the shakiest of the big players are still around and will be for a long, long time because of intervention by the governing bodies and the return of investors who no longer see them as the walking dead due to a changing of the rules. Will we see a return to unemployment levels exceed 20% as happened in the great depression? Highly unlikely.

Never before had the world joined in lockstep to address the problems. Granted, governments threw money at the problem by propping up the banks and then stimulus funding and will have to pay for this with stifled growth for many years but finding a modern government that runs a surplus is a difficult task. Within a few years we will all forget about what happened and we will see a more tempered level of sustainable growth. John D. Rockefeller said of the Great Depression, "Prosperity has always returned and will again." That is human nature.

The BRIC countries, Brazil, Russian, India and China will lead the way forward and have already started their march to recovery. America's economic dominance has been gradually waning for decades and will continue to struggle for many years for many reasons from a decimated manufacturing base to government overspending on wars and social programs. The same can be said for England and other G-7 countries.

States like California have been sliding down the slippery slope for many years and just like the big North American autos, the credit crunch and recession only expedited their decline which was inevitable. Three years from now compare the 2012 global GDP numbers to 2007, and you will see how much the U.S.A. lost ground while the BRICs gained. This recession is simply a re-alignment of the global economy and like it or not, America is going to have to share the driving duties with other countries as we move forward.

Back to the original post. F1 can almost be seen as a micorocosm of the world's economy. Bernie saw this coming years ago and started moving the races around to the emerging markets, China, Middle East, Malaysia. I can pretty much guarantee that both Russian and India are still in Bernie's long-term vision. Where is North America on the F1 schedule? No where to be found, and even with the potential for a U.S.-based team, America just isn't of interest to Bernie any longer. In fact Mexico is probably more likely to get a permanent race than America.

Maybe for all of his greedy flaws and controlling nature, the little guy might be smarter than we think in anticipating global trends and he will make sure that everyone smokes the peace pipe after the bickering has ended. There are too many players that have too much at stake to repeat another debacle like what happened to open wheel racing in North America.

Just my perspective on a Saturday morning while having a fresh cup of coffee delivered by my bride of 22 years who says that "this is just a recess, not a depress." Aside from being beautiful she has the unique ability to see through the storm clouds and understand that better days are ahead.

Cheers-Colin Firth-Ontario Canada

 

I can't quote all you're remarks it would take a whole page, LOL. Great response, and I don't want to keep writing about the economy on a Ferrari board so if you would like a friendly exchange of ideas I can show how REAL US unemployment is already at 20% and how the last Non-Farm Payrolls were tweaked with a death-birth equation. We lost just over 1 Million jobs last month however the Government tweaked the numbers with a death-birth equation to make it look like there was only 345,000 jobs lost. This isn't the first time the US Government has lied. There were major revision of numbers and outright lies after the crash of '88. Lies aren't always bad but when one makes an investment based on those lies without duing due dillegence than it is a bad thing. Look at the Triple A ratings on bogus equity investment vehicles that caused the mess in the first place. If you and I did that we would be sitting in prison for a very long time.

We have had failed banks. Wamu (Washington Mutual) was the biggest US bankruptcy in history and that alone was equivelent to over 1,500 banks failed (A "mega" bank during the GD had a couple branches at most). The GD did not have FDIC insurance, unemployment compensation or food stamps either, that is why you don't see the food lines as bad. The food lines exist, they just aren't as large and the news isn't covering it. There are also tent cities in many major cities, but nothing like the Great Depression because we have food stamps and other resources. That is why things don't seem so bad. Yes things will get better. They always do but this is going to take the US a good 10 to 15 years to get over. Wamu was a classic run on the bank. At that point banks only had to have 10% equity (fractional reserve) yet Wamu still failed because of a run on the bank. Now banks only have to have 6% (part of quantative easing).

Mark my word, I may be wrong, I don't have a crystal ball but I stronly believe we will see another panic within 90 days and the US stock markets will retest the last lows most likely by October and will most likely break those. The GD had 6 of these "rallies" extremely similar to what we have just witnessed only to have further declines each time take out the last lows. This will also cause the US Dollar to gain major strength again. I have real money on the line with my beliefs. I invest for a living, mainly currencies, but I also invest in stock futures, and tax liens.

A Depression isn't bad for everyone. I certainly do not wish for people to suffer by any means. However think of a huge recession and a Depression as opportunities. The most wealthy people in modern history started their wealth during the Great Depression.

My remarks have nothing to do with trying to prove someone wrong or trying to prove myself right. People just need to be asking real questions about what they are told from their governments and the media. They have a very bad history of lying. I am an investor by profession and an investment analyst (they go hand in hand). If people really knew how to truly read finanical reports, and to be able to read charts reality would amaze them. They say ignorance is bliss, but if your own money is on the line ignorance can be extremely costly. I don't get bailouts. LOL.

Back to the F1 news, as far as Bernie. I agree with you. He is not a dumb guy. He didn't make his Billions by being a moron. The open wheel debacle in the US was a shame and I think the wrong side won it, but IRL had a stronger business plan and had stronger financials to survive.

Oh BTW, congrats on being married 22 years. That is awesome and getting too uncommon these days. Best wishes to you and your wife.

 

Exactly.

It was a farce, a transparent farce at that.

And it was another nail in Mosley's coffin. The massive cost items he imposed like KERS, new engines, etc. The ridiculous penalties and meddling in the championship (come on, a $100mm fine for McLaren, no investigation at all of Renault or Toyota for the same things and worse things?). The heavy handed nature of the man (anything he ever said about Stoddart). He is a power drunk buffoon who has no morals or ethics and thinks he can dictate terms to much greater men than himself.

And that's what this is really about. This is his bully pulpit. This is his way of being a big man, not through hard work like Luca di Montezemolo, not through guile and business sense like Flavio Briatore, not through business brilliance like Dieter Matsche****z (sp?), not through extreme talent and and managerial prowess like Ross Brawn or Mario Theissen, not through putting years in sucessfully within a competitive organization like John Howett, and not through a track record of success and professionalism like Ron Dennis... instead, Max Mosley got his job through underhanded back-room deals that were probably illegal and definitely unethical. He's the son of a real slime of a man, and never really amounted to anything other than shorhorning himself into the role of Bernie's b*tch in the FIA.

A man like that will never, ever, ever relinquish his bully pulpit. It's all he has. He would have to be forced out through a WMSC vote to ever leave the FIA. He will never retire unless he knows for sure he cannot win an election, and in that case he'd try to put a pawn in and transition himself to another cushy job where he can pull the strings.

He'll never agree to give that up. The FOTA teams demand he does give it up.

Irresistable force vs Immovable object.

The result will be big - someone is going to have to roll over on this one and I don't think it's going to be FOTA. They have an option... they can run their own series and it would be legitimate and worthwhile. The FIA's option is to let all these no-name teams in and think they still have F1. That's a very very weak hand... if they go that route, not only will the new series be a joke in comparison to the manufacturer series, but there's almost no way Mosley could win a vote to stay in office if he just destroyed F1. Given, therefore, that Mosley's ONLY option is to work this out with the teams, that means FOTA has the upper hand. Max MUST compromise, they don't have to.

The only question is - is Mosley's ego so big that he will let F1 implode rather than deprecate himself before the FOTA teams?

I think his ego is too big. He has gotten his way for too long. He has grown drunk on his power. He thinks he can get anything, all the time. He's in denial.

Bernie is probably working quaruple overtime trying to fix this, but striking a deal with Mosley that includes anything less than total surrender of the opposing side is probably a very hard thing to do.

Max will either roll over in the next few weeks, or FOTA will be gone.

If FOTA is gone from F1, the only possible rescue would be for Mosley to be ousted in a few months, then a new leader emerges with a reconciliatory tone, and patches things up. That could very very likely happen as well.

The only possible solution will involve a big loss for Mosley. There's no other alternative.

 

The way i look at it, there's a chance of a breakaway series now. Luca and FOTA are refusing to budge, and with both Luca and Alonso at Le Mans this weekend is something to consider. Luca was quoted saying that if Ferrari quits F1, there's a high chance we'll see a Ferrari team in Le Mans.

IMO, Max is in a very tight corner here.

 

I disagree.

The situation in 1982 was vastly different.

I think the most likely outcome is that FOTA refuses to change their conditions, Max is forced to either exclude them or at least not include the new podunk teams so slots are left open for the real name teams. Then, Max will never get re-relected, a new person will come in, agree to a realistic governance process within F1 and reasonable budgets, and pull the big name teams back into the F1 fold this fall.

I think that if Max tries to stay on in the FIA, a breakaway series is possible, maybe even likely. If he gets ousted, it's highly unlikely.

 

I predict Bernie gets everyone back on track and gets Max to agree to let the teams have there way.

He will make the teams promise to reduce costs and in return they can have a new leader of the FIA in October.

 

I am still waiting to hear specifically how a breakway series is likely. Who will come up with the money to put on the series? Who will organize and run the series? How will the current sponsors react to the downtime before a new series gets underway? So far, I have not heard nor read anything that suggest the FIA contract with Ferrari and Red Bull has been breached by the FIA, have you? So how will the legal issues affect the new series?

Specifics Michael. Details as to how each element will be addressed. Excuse me if I missed it, but I still have not seen from you how you would bring new teams to F1 if there were no budget limitations? I just heard Porsche is now possible losing money, that's like saying Ft. Knox is empty. Their just aren't any major corps going racing in the next 5 years, let alone going into F1.

I don't see a breakaway series as possible. I totally agree with Andreas (tifosi12). I have been very specific with my reasons as to why not, so I would appreciate the same from you. If it were possible, you would have heard concrete information by now. The guy from MotoGP seems to shadow Mosley's personna, so I think that was all PR hype. BS in otherwords.

At this point, I believe when some mature individuals on both sides prevail, there will be some form of budget caps, or serious properly timed cost reductions, whatever you want to call them, to be spread out over the next 3-4 years. And there will be some sort of committee including team principals that review proposed rules changes and implement them in a more reasonable fashion and time frame, which will prevent any more crazy actions by Mosley or his successor. Ferrari and Toyota will not get what they say they want, unlimited budgets. FOTA's current proposals, and the FIA's current proposals are both crap, there is a median, and that is what you will see.

If there is no compromise, then the blame is equally shared by FOTA and the FIA. Ecclestone has been one that has pushed some of the new teams to enter F1, so it appears at this point he is prepared for the worst so he will not side with FOTA. He knows that the sport needs new teams to fill his 20 car minimum grid requirement, and that will not happen unless there are budget restrictions. So Bernie will push FOTA to agree to budget caps, but I doubt if he lets them have their way 100%.

As for Mosley leaving, he was supposed to announce his intentions this month, June. If what I suggest in the above paragraph is the final result, then neither FOTA nor the FIA are the winners, but then neither will appear to have lost. Its then 50/50 that Mosley will go. With proper rules in place to prevent the head of the FIA from imposing rules without team input as has happened over the last 10 years, then it really does not matter what Mosley does. His power will be substantially reduced. If he were to leave, which I hope he does as the FIA badly needs new ideas, I doubt if it takes more than two years before his successor will develop a Balestre/Mosley personality. It takes a big ego to deal with 10-12 other possibly larger egos.

 

All of those questions are irrelevant... about where the $$ will come from, etc. The market for the biggest car companies racing the fastest cars is over $1 billion a year in direct revenues, not including the soft revenues to the participants in the form of exposure and sponsorship. If you include those revenues, you're looking at perhaps $2 billion a year. The cost to run the races is perhaps something like $5mm per race. For a 20-race calendar, that's $100mm. That's only a small portion of what these teams spend on R&D every year. Who will pay for it is a non-issue. As for downtime, there doesn't need to be any. As for sponsorship contracts, nobody knows what those contracts entail but they are paying for exposure, and if the teams are racing, they are getting exposure - again, a total non-issue. As for the contracts you mention, again, a non-issue. There is no way the FIA is going to compel Ferrari or Red Bull to compete in Formula 1. It's just not going to happen. And even if there were lawsuits flying both ways, it would just be a distraction and wouldn't affect the fact that there is $2 billion sitting out there for the big-name teams to go capitalize on. That will trump everything else.

Ron, you put forth a set of circumstances that was just silly... it was a worst-case based on every bad rumor coming true and every positive rumor not coming true, and as such it wasn't worth getting into a big theoretical pissing match over something that simply wasn't going to happen. As for attracting new teams, the solution is very simple... new teams will come if the costs are lower. FOTA wants to lower costs. Problem solved. That's it - nothing else needs to be said about the specifics of it. They have the same goal, so it's a non-issue. Mosley's assertion that it must be so drastic ($50mm/yr) is laughable... it's also patently false. Putting a mechanism in place that WILL cause 8 teams to leave F1, and claiming it's to stop teams from leaving F1 is asinine. It's totally implausible and frankly it's f-ing stupid. It's not about that at all - it's just a BS power trip for Mosley. FOTA can tell him how to cut custs, he could hammer it out with them. That's all he had to do... work it out with FOTA and hit that sweet spot where costs are low enough that FOTA is happy, and low enough where new blood comes in. Max trying to dictate how that comes about is, again, f-ing stupid. He doesn't know anything about controlling costs. His pet projects have been the most expensive things the teams have ever had to do.

But he pushed too far - it's no longer about costs. The cost aspect is a non issue. It's about governance. FOTA isn't going to let Max keep the reigns the way he has before. One of two things must happen... Max loses his control, or he loses the FOTA teams. There's no other alternative. No negotiation, no working out deals. One or the other, nothing else. Max is screwed.

They probably don't even need to worry about a breakaway series... it's not all that hard to do if they decide to. Put together a rules structure, arrange tracks, TV coverage would be easy, let the tracks keep $$$ from trackside ads and ticket sales, instead of the tracks paying $20mm to get them to come, maybe they tell them they will come to race for free... tickets cost $200/ea instead of $800/ea. The teams split the TV revenues, making way more than before. Tickets are cheaper. Tracks make $$ - every track wants them to come and race there. Non-issue. It's not like there is some massive framework that the teams couldn't replicate. They don't need to start yesterday if they want to pull it off for next year... it can happen easily without much trouble.

But I'm sure it doesn't need to. FOTA has won... Max is screwed. They have taken a hard line. They haven't budged one millimeter on their position, which is governance changes. Max tried playing hardball, tried being reconciliatory, tried pushing them, herding them, belittling them, cajoling them, pleading them, etc. He's changed his terms a few times, the teams have remainted steadfast. Either Max rolls over and gives up, or he loses the FOTA teams. If he loses he FOTA teams, he will never be able to win re-election... problem solved. A new president comes in, takes a reconciliatory tone, brings the FOTA teams back in, the '10 season goes on like nothing happened, but Max played chicken and lost. Alternatively, Max rolls over now, FOTA rejoins F1, and Max is rendered powerless. FOTA wins. Or, Max exludes the FOTA teams, they form a breakaway, Max gets re-elected, then we have two series. Very unlikely, but that will happen before FOTA capitulating will happen.

It has nothing at all to do with budgets. The teams are saying clearly - it's abuot governance. Budget issues could be hammered out in an afternoon, non issue. It's about governance. It will only ever be solved when either Max gives up power to FOTA, or he gets booted from office.

FOTA's only blame would not subjecting themselves to the crazy whims of a moron (Max). Nobody would blame them - they would blame the FIA. Again, this whole situation has NOTHING to do with budget caps. Caps are a total non-issue. It's about governance.

It matters a ton what Mosley does... he is either going to be cut off at the knees and rendered impotent, in which case he can stay. Or he is going to get ousted. Or if he stays, and retains power, FOTA won't be in F1 next year and will run a breakaway series.

FOTA has already won - Max's only choice is to roll over and voluntarily give up all his power, or get ousted from office.