KERS and the argument over costs

Luca di Montezemolo and Bernie Ecclestone are in conflict over F1's revenues

Luca di Montezemolo and Bernie Ecclestone are in conflict over F1's revenues

Bernie Ecclestone has changed his approach in his ongoing row with the Formula 1 Teams’ Assoication over the distribution of money in F1.

When Ferrari and FOTA boss Luca di Montezemolo first pressed Ecclestone to incresae the share of money the teams received, Ecclestone’s response was to try to embarrass Montezemolo by publicly reminding him of the multi-million dollar bonuses Ferrari receive compared to other teams.

He has now refused to increase the money the teams receive and even suggested it should be reduced. Will he now use the KERS argument to drive a wedge between the teams?

“We’ve got to give them less”

Ecclestone stated his position in the argument over revenue in F1 in an interview with the Financial Times:

We don’t need to pay more. We’ve got to give them less.

In what I call the good old days, all we had to do was have a chat with the people who had all the money… But now they come along and they’ve got lawyers and masseurs and they can never agree on anything.

[The teams] could ask for more money, but they won’t get it.

Perhaps a lot gets read into Eccletone’s words because he never uses very many of them – or because he chooses them carefully.

With potentially nine teams instead of ten on the F1 grid this year, FOM could reduce the total money given to the teams yet still increase the amount received per team. So although Ecclestone is talking tough he isn’t necessarily ruling anything out at this stage.

In his spiel about the ‘good old days’ it’s not hard to imagine that Ecclestone is rueful that’s he’s no longer able to make the kind of quick deals that work out best for him that he used to – the sort of deals that gave him a personal fortune in excess of ??2bn. It doesn’t take a cynic to imagine he’s less concerned about the speed of conducting business and more worried about getting the best deal for himself and, these days, F1 owners CVC.

Alternatively, maybe he’s just bitter he hasn’t got a masseur…

Read the full original interviews in the Financial Times (free registration required):

Is KERS Ecclestone’s next bargaining tool?

It can’t have escaped Ecclestone’s attention that FOTA is presently divided over the introduction of Kinetic Energy Recovery Systems for 2009. On Monday Flavio Briatore joined Luca di Montezemolo in criticising the 2009 innovation on grounds of costs:

We know already that for 2010, with the option of the standard KERS, whatever money we spend this year is for one year only. And in this kind of environment I think it?s completely unnecessary. For sure BMW want to do it and so we will follow because it?s difficult for us to have one competitor to develop a programme and for us not to be part of it because we could lose performance.

But at the launch of the F1.09 yesterday Mario Theissen derided the cost argument against KERS:

We agreed that the cost of KERS was quite significant, but the real thing is that when we discussed it a month ago the money had been spent already on development, so it would be the worst thing to spend money on something you don’t use. Even if you delay the introduction, no development project has become cheaper by delaying the introduction. In effect, all the teams would have developed KERS for another year before making use of it and that, in our view, doesn’t make sense.

Ecclestone may see an opportunity to prise FOTA apart over the twin issues of KERS and costs. He has said in the past he’s no fan of KERS, and his retort to the teams when they demand more money may simply be that if they can afford KERS, they don’t need any more cash from FOM.

That argument could win over a lot of teams – especially Williams. It has already opted for the comparatively low-cost KERS solution of a flywheel-based device rather than an electrical one. It has insisted its budgets are in place for 2009 and 2010 – but the very fact they were moved to make such a statement illustrates the pressure they are under. It wheeled out its FW31 on Monday with a noticeable lack of sponsors, and its main backer RBS is all over the British newspapers having seen its value fall from ??75bn to ??4.5bn in two years.

In which case, should BMW offer to drop its opposition to deferring KERS (which it has said it may not use in the first race anyway) in exchange for Ecclestone sending a bit more cash the teams’ way – even if it is only the money Honda would have got anyway?

More on KERS and costs

Advert | Go Ad-free

5 comments on KERS and the argument over costs

  1. Arthur 954 said on 21st January 2009, 13:42

    I´ve read Bernie´s interviews in the Financial Times and I think it´s all b.s. If you listen to him talk, it´s thanks to him that the sun rises in the morning. Every sport in the world today has more TV coverage than 30 years ago because of an increase in population, available money and new and better communication technologies.
    All this scheming of his puts everyone in a bad mood and now all parties involved are on the defensive.
    How many divisions do Bernie – CVC have ? Why is everyone so afraid of them ? as far as I know, it´s the teams that have the frying pan by the handle : they are the ones doing the racing. The teams should split and start another series doing things in a different way. If Bernie thinks there is one particular team that has special prestige, he can take that team and race them in the Middle and Far East, where he makes his money.
    The rest of the teams can start another series that goes back to the spirit of F1, does things in a more friendly and open way, and uses existing historical venues.

  2. Josh J said on 21st January 2009, 15:51

    I couldn’t agree more arthur. Bernie’s one and only trick is calling everyone’s bluff, now that the stakes are so high, and frankly, he has a lot less to lose than everybody else (think of all the employees that Ron is responsible for at Mclaren for example), and so everybody always backs down. I think it’s about time they just say goodbye to Ferrari and Bernie and start a proper racing series themselves- imagine how god it could be if it was organised by Ron and Frank and PAtrick and Paul Stoddart instead of Max and Bernie and Jean Todt.

    A sport is nothing without it’s history and traditions, something that the arrogance and greed of bernie has quite forgotten and/or ignored, and I just WISH someone would teach him a lesson. I’m so sick and tired of his aggressive little pathetic press releases and interviews. If most normal behaved like that in the business world nobody would even let them into a boardroom let alone do any business with them.

    I say all the old champs should band together and form a more European and American series based around proper racing tracks.

  3. Yes, I’m in agreement here. Is this preparing the way for a particularly bloody 2009 season? Are we going to see the teams calling Bernie’s bluff and not going to some races? Especially the non-media grabbing ones and the long distance ones…
    I am certain there was a comment from Max not long ago that if the teams were unhappy with Bernie/FOM and wanted to start a new series under the FIA umbrella, all they had to do was talk to him.
    Or is he just stirring it as well?

  4. Oh to be a fly on the wall and hear the truth any of these lot. The truth, an extinct concept some might say! It’s all bluff and double bluff with claim and counter claim followed by rouse and cloak and daggers slight of hand dividing allegations etc. There are so many over inflated ego’s its amazing we have what we have. Which makes me think. Who are the behind the scenes folks that really make things happen and lets hear some home truths from them for a change…

  5. Bernie seems to me to be more interested in his own $$$ rather than the good of F1, he talks only of whats best for him and the fat cat shareholders (the same type of spineless snakes that caused the credit crunch) his attitude towards the fans of F1 stinks, if i can take peoples minds back to 2005 when the farce of the Indy Grand Prix was happening, his answer to Martin Brundle about the situation was just a shrug of the shoulders and a smile from his 6ft tall trophy bimbo airhead wife, i think that says it all about Bernies Hollywood type attitude, not to mention his outrageous claim that racist taunts against Lewis Hamilton where just toungue in cheek fun. I think he needs to retire and very fast before F1 ends up as popular as watching tiddly winks.

Add your comment

Your email address will not be published. Required fields are marked *

All comments must abide by the comment policy. Comments may be moderated.
Want to post off-topic? Head to the forum.
See the FAQ for more information.