Max Mosley and FOTA meet for crunch talks on F1 costs in Geneva

Standard engines, shorter races and customer components are being considered

Standard engines, shorter races and customer components are being considered

Max Mosley and the representatives of the Formula One Teams Association are meeting in Geneva today to discuss future rules that could transform the face of Formula 1.

It comes after several weeks of leaks, off-the-record briefings and the usual subterfuge that occurs whenever F1′s political tectonic plates start to shift.

Central to today’s discussion are radical changes to engines and chassis, forcing teams to use more common parts, and changes to the organisation of race weekends. Here’s a look at what the FIA is proposing, the teams’ reaction, and some thoughts on the questions at the heart of the matter.

The story so far

Max Mosley began his latest push to change F1′s technical regulations in May. At the time he was embroiled in the notorious sadomasochist sex scandal and the teams declined to meet with him. In July he sent them a letter demanding they propose future F1 technical rules or he would do it for them. He set a three-month deadline, which has now been reached.

The teams responded by forming a group to represent their interests: the Formula One Teams’ Association. More on this here: Why have the teams formed their own group and what does it mean for F1?

Mosley’s agenda

Despite Ed Gorman’s pursuit of Mosley over the sex scandal, The Times apparently remains the FIA’s preferred destination for F1 leaks. On October 9th details of the FIA’s proposals began to emerge including the following contentious phrase:

Under the new proposals there will be one standard engine specification, which each team will be able to build, but it will be identical to those of their rivals. The only difference will be the manufacturer?s name on the block.

Six days later The Times had a copy of the draft agenda for the Geneva meeting. It proposed:

  • For 2010-2012, either a homologated engine produced by one supplier, or similar engines supplied at fixed and much lower costs, or a guarantee from FOTA to supply engines for ??5m/year.
  • From 2013, a new specification of engine, to include exhaust energy and heat recovery.
  • Introduction of common chassis parts including ‘corners’ of the car (wheel assemblies and suspension), underbodies and other parts.
  • Other changes to the rules of racing to reduce costs.

Inevitably the prospect of a standardised F1 engine attracted the most attention, as it potentially represents a change to the very essence of the sport. The outcry grew louder when, on October 17th, the FIA announced it had requested bids from companies that might be interested in supplying a standard F1 engine. A few hours later, it issued a ‘clarification’, stating that teams would still be able to assemble their engines.

FOTA’s response

The same day details about FOTA’s counter-proposal began to emerge. They included:

  • Making engines last three races
  • Reducing testing from 30,000km to 20,000km
  • One car per test (two in off-season)
  • Reducing race distances to 250km / 90 minutes (from 300km / 120 minutes)
  • Making fuel loads public knowledge after qualifying
  • Offering one championship point for the fastest driver in part two of qualifying
  • Driver autograph sessions and better interview opportunities at races

FOTA was considering pressing for a ban on refuelling, but backed down after Mosley’s provisional agenda noted, “We believe that priority should be given to things which the public cannot see (e.g. telemetry) rather than visible parts of “the show” (e.g. refuelling during the race).”

The key questions

Do FOTA’s proposals go far enough?

The FIA’s proposed changes are sweeping and radical. FOTA’s are incremental and modest.

Max Mosley is talking about cutting costs to the extent that “a team can race competitively for a budget at or very close to what it gets from [Formula One Management, Bernie Ecclestone's company].” At present, Mosley claims:

one of the teams at the back of the grid cannot possibly hope to raise more than – including the money they get from Bernie (Ecclestone) – say 40 million Euro, let’s say ??30-35 million, which in the real world is a huge sum of money, but that’s the most they can raise. To compete today, they need two or three times that and even then they’re at the back of the grid.

FOTA seems to feel reductions of this scale are not necessary.

Is the need to cut costs exaggerated?

Not everyone agrees with Mosley’s zeal for cutting costs in F1, as Clive explains:

Cost cutting is given as the excuse, of course, but when it is considered that the document includes several proposals that will require the design and manufacture of new technology, as well as yet more changes to the regulations as early as 2009, one has to wonder whether there will be any saving on expenditure for the teams at all.

Clive has an excellent point: Mosley’s demand for greener technologies will force teams to spend money, so in a sense he is trying to have his cake and eat it.

Others simply disagree about the scale of the problem. And many of those people are to be found in FOTA.

Are FOTA united?

FOTA represents all ten of the teams, whether they are car manufacturers (Ferrari, Toyota, Honda, Renault), manufacturer-backed teams (McLaren-Mercedes, BMW-Sauber) or independents (the rest).

Their budgets are estimated at ranging from $120m (Force India) to $445m (Toyota). Inevitably, they don’t share the same opinion on cutting costs.

Toyota’s John Howett said:

If we get told this is the budget for competing in this year, next year we will compete and we will do the best available job that we can within that.

That might make sense if you could halve you team’s budget and still have almost twice as much money as Force India. But the Gerhard Bergers of the grid see it differently:

If you look at GP2, and don’t get me wrong – I never want to compare GP2 to F1, and I never like F1 too close to any other series because it has to be different – but it cannot be that F1 costs one hundred times what GP2 costs. And on Sunday, when you watch the races, you sometimes see a better show in GP2.

(By ‘sometimes’ I think he means ‘always’).

Mosley’s tactics: conquest or compromise?

Mosley knows well the divisions and differences within FOTA and he has already tried to exploit them. He practices tactics of conquest rather than compromise: distract, divide and rule.

The ‘distraction’ came in the form of an attempt to stop FOTA from referring to themselves as such because Formula One is a registered trademark.

His issuing of a tender for the standardised engine contract was the ‘divide and rule’ approach. The practice of designing and building an engine is essential to why the car manufacturers are in Formula 1 – but their customer teams care only about getting cheap, competitive engines.

But FOTA seem to be wise to this. They have agreed and written down their position and instead of meeting Mosley en masse have sent two representatives to speak for them. Interestingly, both are representatives of car manufacturers: Ferrari’s Luca di Montezemolo (also president of FOTA) and Howett.

Contradictions in the FIA’s position

If FOTA’s potential disunity is its weakness, the apparent contradictions in Mosley’s proposals undermine his case for cost cutting.

For 2013 his proposal reads:

The FIA would like to see a modern high technology power train in 2013. We envisage a down-sized DI engine with exhaust energy and heat recovery, coupled to an electrically actuated gearbox.

However, we are completely open to new ideas. The only preconditions are (i) that the costs of development, maintenance and unit production for the power train must be an order of magnitude lower than is currently the case.

Would developing a new engine with exhaust and heat energy recovery really be “an order of magnitude” cheaper than keeping the same engines for another year and extending them to last longer?

On top of that, having introduced a freeze on engine specifications the FIA is now requiring that engine performance is equalised because, as Mosley explains:

When the decision was taken to “freeze” the engines, certain teams asked for and got a period of time in which to address reliability problems and re-tune for 19,000 rpm. Some teams took advantage of this period to improve the power output of their engines. This was not intended. Other teams did not improve their engines, believing performance to have been “frozen”. This has produced unfair and inequitable differences in performance.

This makes little sense as the performance of the engines had not been equalised before they were frozen. Instead of blaming some of the teams, the FIA should blame itself for being naive enough to think they wouldn’t pursue every avenue available to them to improve the performance of their cars.

According to Ron Dennis, ‘unfreezing’ the engines to make these performance equalisations will drive costs up even further:

We are a little bit mystified. All that talk about the five-year stability rule, the initiative was driven by cost-reduction and we have taken that cost reduction.

The FOTA proposal, meanwhile, contains some suggestions that seem to have no bearing on cutting costs and are demonstrably bad ideas. Their proposal to award a point to the fastest driver in Q2 is just plain awful: who wants to see F1 titles decided on a Saturday, when only a fraction of the usual audience is watching?

Could some teams leave F1?

At the beginning of the year Red Bull boss Dietrich Mateschitz announced he wished to sell Toro Rosso. The team uses the same chassis as its sister Red Bull outfit but that practice is set to be outlawed. However the prospect of allowing further standard parts may encourage Mateschitz to change his mind (and Sebastian Vettel’s victory at Monza can’t have hurt).

Would standardised engines force the car makers to quit? BMW’s Mario Theissen doesn’t like it and nor does Honda’s Nick Fry:

If you are talking about a standard engine, as in one that is identical and made by another manufacturer and they are all the same, we are very much opposed to that.

Car manufacturers tend not to give much indication of their intentions in this situation: if they’re going, they just go, as the British Touring Car Championship found out last month when Seat announced it was pulling out.

What other solutions are there?

If the problem is that F1 has become too expensive, cutting costs is not necessarily the only solution. Perhaps the teams should receive more money from FOM in the first place?

Autosport’s Dieter Rencken argued in favour of that in his column last week (sub. req.):

Increase the percentage paid out to the teams from the 50 per cent (in itself double the absolutely laughable 23 per cent the teams received between 1997 and 2005) to ensure that the revenues work to the benefit of the sport and its participants. Mosley suggested 75 per cent in June; why should the teams now accept any less?

He went on to suggest that more could be done to exploit the sport’s revenue-generating potential. I’m sure the many fans who find themselves unable to watch many sessions live would agree.

Over to you

This is an enormous and complex subject which I’ve barely scratched the surface of in this brief overview.

What do you make of these questions? Are you convinced by the need to cut costs? Is F1 in danger of over-reacting to the recent market turmoil? Would standardising engines and chassis parts dilute your enjoyment of the sport? Share your thoughts and analysis in the comments.

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29 comments on Max Mosley and FOTA meet for crunch talks on F1 costs in Geneva

  1. you cannot turn back the clock to when cosworth supplied the engines for the majority of teams – ferrari were always on their own engines of course. if williams had not decided to not allow clients to buy engines etc from the likes of mclaren you wouldnt have mad max coming up with these ideas – cut costs and have client cars – it helps to reduce costs and why not have class a/b in the same grand pix – other championship classes have it???

  2. “engine with exhaust energy and heat recover”

    Does this mean return of Turbo’s I wonder?.

  3. stevepCambsUK said on 21st October 2008, 9:56

    No i dont believe costs should be cut in F1. Bernie and Max are bleeding this sport dry, what was the point of the concorde agreements in the first place? it was my understanding that each team gets a percentage of tv rights and to make the sport more commercially viable for the teams.(ref. http://en.wikipedia.org/wiki/Concorde_Agreement) Bernie has a £2.4 Billion pound fortune and Mad Max cannot be to far behind.
    Come on FOTA get a grip and take on Bernard, give him a birthday present he wont forget tell him to stick his standardised engines where Max would ‘allegedly’ enjoy it.
    These two men need to give something back to the sport and not loose the essence of F1.
    I will love F1 allways, no question about that but i would also love a break away series where the teams are ‘free’ to design their own engines and maybe move away from the internal combustion engine. id love to see technology pushed as far as possible and not restricted. maybe ive missed the point here maybe not only time will tell……

  4. Andrew said on 21st October 2008, 10:03

    How to cut costs? Simple, wait until the teams have less money to spend. Until then, any attempt to stop expenditure in one area will just move that spending to another. If a team has the money to spend they will investigate new ideas for improving performance. I can’t see how anything other than a spec formula or a firm budget cap will change this.

  5. Not sure how you would do it but it would be good to start with what we want to see in F1.
    I have quite liked how we have seen a decent balance this year between McLaren and Ferrari cars, one is better at one circuit and one better the next, we need to extend this and get more teams and drivers competing more closely, with it being made easier to overtake. But to have the same cars or even engines seems to me would detract from F1 being the most prestigious motorsport, and part of the competition of the sport between the teams.
    So cheaper – yes – to get more teams in. (Or give the teams more money back.)
    More restricted tech – Yes – to level the field but not too much.
    Maybe Mosely’s proposals could be altered a little and made to work?

  6. They should allow the teams to build their own engines but make them build cheap and simple engines with lower power capacity. Then they should sell them a standardised Turbo

  7. Excellent article

  8. Stealthman said on 21st October 2008, 10:29

    As if engines weren’t standardised enough already…

    Although equalised performance is acceptable for me, I don’t like the Idea of standardised engines. For me, it takes part of the ingenuity out of F1. Just my two cents.

    This was a great article to read, Keith. You have explained it in a way that is easy enough to understand, yet complex enough to keep the reader interested. Thankyou for the reading experience, and the thoughts it provoked in my brain. :)

  9. diseased rat said on 21st October 2008, 10:37

    However they do it it’s clear that they need to cut costs urgently. We only have 20 cars on the grid at the moment and if we lost two teams then we’d be down to 16. A starting grid of 16 cars is bordering on the not-credible for me. A grid of 24 or 26 cars would be much better and offer something of a buffer to a team or two leaving.

    The major car manufacturers are all suffering falling sales and it’s only a matter of time until one of them decides it can not continue spending a few hundred million dollars a year on a sport.

    The only truly staunch privateer on the grid, Williams, is in trouble and who knows where that will lead. Clearly they would be helped my cutting costs.

    There is no reason for spectacle of F1 to suffer if it’s done correctly.

  10. Chalky said on 21st October 2008, 11:02

    I wonder how much Audi \ Porsche \ Mazda \ Acura (Honda) spend on competing in the ALMS?
    They all make their own engines and some even the chassis.

    I’d rather like to see a customer engine \ chassis option for teams to purchase.
    E.g: maybe Lola \ Reynard chassis and Porsche \ Cosworth \ Judd engine option etc..
    The customer bought chassis \ engine option would have less development but would allow those on a tight budget to pick it and try and tweak it themselves.

    You’d then need one rule to disallow the customer supplier from entering their own team.
    You either make your chassis and race with it, or you supply chassis only.

    Those with money would make their own. Those without would buy a customer chassis \ engine. The more that buy a certain customer chassis may help it’s development, but all improvements would be available to all.

    It should help those cut cost and increase the grid size.

  11. I don’t agree with standardisation. Part of F1 is the teams striving for those extra 10ths, not just the drivers.

    As for the possibilities for increasing revenues… how many F1 fans would jump at the chance to buy a box set of dvds across the decades? Or pay to subscribe to a dedicated F1 channel on TV. EG here in NZ there is a Rugby Channel on Sky that costs extra. You could still show qualifying and race on free to air, but all the practice sessions/interviews/technical shows/old races the rest of the time. The media distribution and coverage of F1 is embarrassing and given Bernie’s constant quest for more cash, it’s baffling there is a whole market barely being tapped.

  12. Anonymous said on 21st October 2008, 11:24

    Possibly the easiest and most effective cost-cutting measure would be to get rid of the $48 million bond that is required to compete.

    Engines should not be standardised, Formula 1 is not a spec series. If Mosley wants to improve fuel efficiency, reduce engine capacity/cylinders and bring back turbos.

    Also, good article.

  13. Personally I can’t stand Mosley, all his comments are usually part of some political manoeuvring. If they really do want to bring in standardised engines it is more to do with forcing the manufactures out of F1. Although the badge would be different can you imagine a Ferrari Cosworth or even a BMW Mercedes?

    What happened to the engine freeze to cut costs? The argument that performance needs to be equalised doesn’t work with me. This sort of problem was obviously going to happen when they froze engines. If you stop teams from changing their engines, then the teams who had the most powerful engines when the freeze happened are always going to have the most powerful engines. The argument that some teams have improved engines by the back door just means the FIA didn’t police the rule well enough. I know Renault initially said they had fallen back because of this but they didn’t look that bad in the last couple of GPs.

    What happens next year when some teams have significantly better KERS units than others? Will Mosley than say they must be equalised? He has said in the past that the good thing about allowing F1 teams to develop KERS was that you would get different approaches and because of the rate of development and innovation in F1 the car industry as a whole would be better off. This would not be the case if teams had to use a standard unit.

    For years now Mosley has been justifying new rules on the safety and cost cutting front. Could someone please tell me if the FIA can introduce rules for any reason they want or can it only be specific reasons such as safety?

  14. Adrian said on 21st October 2008, 13:12

    Fantastic article.

    For me the best way to cut costs for independant teams would be to let them buy chassis and drive-train, though perhaps only if they’re from seperate suppliers.

    If you want to standardise parts, then how about parts that really don’t interest the majority of fans (and I’m one of the people who is fascinated by the small detail changes we see through the season). I’m talking about the safety cell, fuel tank, wing endplates, wing support struts, car floor, wheels, brakes, steering wheels, servos, fuel pumps – the list goes on. I know the engine and drivetrain is a big expenditure, but all the little parts would surely add up.

    Want to save money even further, cap driver salaries – if they want to get sponsorship to boost their earnings then that’s fine (it raises the image of the sport as well afterall).

    As well, why not limit aero development throughout the year, so at the beginning of the year teams develop low, medium-low, medium and high downforce aero packages and are only allowed to make 1 change to each package during the season.

  15. Oliver said on 21st October 2008, 13:21

    The FIA needs to show some respect to the teams and stop taking unilateral actions. While I do agree there is a need for costs to be reduced, it cannot be tied to equalizing performance, by that I mean standardized cars and engines.
    KERS apart, the rules for 2009 will go a long way towards reducing costs as there will be very little scope for performance improvements aerodynamically. KERS itself is an expensive proposition to the teams, big or small, and will continue to be expensive for some time to come.

    On the issue of engine performance equalization, I think its very wrong to unfreeze the engines because the manufacturers where given enough notice of the freeze and what was expected was that they re-tune for 19,000 rpm limit. I would expect any normal engineer to reposition the power band to meet the new regulations, otherwise what was the point of asking them to re-tune. Its a serious issue, because its possible for those teams allowed to rework their engines, to now hide massive performance gains by using non optimized inlet trumpets during any FIA inspection, then changing to optimized trumpets during races. The only option will be to allow everyone re-tune.

    Finally, If we are going to standardize everything, why then have a more expensive version of GP2? Lets just go ahead and adopt the chassis and engines of GP2 and be done with it.

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