F1 to split in two as FOTA teams announce their own world championship

2009 F1 season

Australia 2009: The beginning of the end for F1?

Australia 2009: The beginning of the end for F1?

F1 has moved a step closer to splitting in two as the eight FOTA teams have announced they are to form their own racing series.

Autosport reports that Ferrari, McLaren, Renault, BMW, Toyota, Brawn GP, Red Bull and Toro Rosso are to create their own series independent of Formula 1.

Update: FOTA press release added

This leaves next year’s Formula 1 championship with only five confirmed teams: Williams, Force India, Manor, USF1 and Campos. However the FIA is understood to have several other teams ‘in reserve’ to fill up the grid. These may include the likes of Prodrive and Epsilon Euskadi, but not Lola who withdrew their 2010 application earlier this week.

According to Autosport the teams announced:

The teams cannot continue to compromise on the fundamental values of the sport and have declined to alter their original conditional entries to the 2010 World Championship.

These teams therefore have no alternative other than to commence the preparation for a new Championship which reflects the values of its participants and partners. This series will have transparent governance, one set of regulations, encourage more entrants and listen to the wishes of the fans, including offering lower prices for spectators worldwide, partners and other important stakeholders.

Formula 1 splitting into two is the worst possible outcome of the FIA-FOTA negotiations which have dragged on for months. If this split comes to pass it will likely deal a devastating blow not just to F1, but the wider motor racing world.

We now face the prospect of a divided world championship in 2010, with neither of the two resulting series enjoying the strength that Formula 1 has accumulated in its 60-year history. At a time of such economic turmoil, it is a desperate course of action to take.

Update: Press release from FOTA:

Since the formation of FOTA last September the teams have worked together and sought to engage the FIA and commercial rights holder, to develop and improve the sport.

Unprecedented worldwide financial turmoil has inevitably placed great challenges before the F1 community. FOTA is proud that it has achieved the most substantial measures to reduce costs in the history of our sport. In particular the manufacturer teams have provided assistance to the independent teams, a number of which would probably not be in the sport today without the FOTA initiatives.

The FOTA teams have further agreed upon a substantial voluntary cost reduction that provides a sustainable model for the future. Following these efforts all the teams have confirmed to the FIA and the commercial rights holder that they are willing to commit until the end of 2012.

The FIA and the commercial rights holder have campaigned to divide FOTA. The wishes of the majority of the teams are ignored. Furthermore, tens of millions of dollars have been withheld from many teams by the commercial rights holder, going back as far as 2006. Despite this and the uncompromising environment, FOTA has genuinely sought compromise.

It has become clear however, that the teams cannot continue to compromise on the fundamental values of the sport and have declined to alter their original conditional entries to the 2010 World Championship. These teams therefore have no alternative other than to commence the preparation for a new Championship which reflects the values of its participants and partners.

This series will have transparent governance, one set of regulations, encourage more entrants and listen to the wishes of the fans, including offering lower prices for spectators worldwide, partners and other important stakeholders. The major drivers, stars, brands, sponsors, promoters and companies historically associated with the highest level of motorsport will all feature in this new series.

Note to Eds: Statement issued by FOTA on behalf of BMW-Sauber, BrawnGP, Scuderia Ferrari, McLaren- Mercedes, Red Bull Racing, Renault, Scuderia Toro Rosso, Toyota.

Read more: Max Mosley is wrong. The only split F1 needs is a break away from him

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607 comments on F1 to split in two as FOTA teams announce their own world championship

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  1. Wyzzard said on 20th June 2009, 2:03

    Fia taking actual legal action against the FOTA teams could be the best thing yet. The suit would be presented in an European Union court of law, not the Motorsport court, which I believe must be biased toward FIA.

    So Max may just get a nasty surprise. Based on the experience of past forays into the EU courts, Max might just get his bottom spanked. And, really, no pun intended there. (Alright, perhaps a small pun.)

    But, then, he may know this and the threat of lawsuit is indeed merely a delaying tactic on issuing the 2010 entrants list. He really IS in a pickle now, isn’t he, to come up with a full grid. Unlike FOTA, which will have no trouble at all fielding 20 to 22 cars. I’m sure N-Tech, Lola and others would go with them.

    And why HAS Bernie been soooooo quiet this week? Someone needs to poke him, see if he’s still breathing. (Prolly planning his escape to a South Seas island somewhere. Lord knows, without the FOTA boys in FIA-F!, Bernie will never be able to make his payments to his creditors.)

    • scunnyman said on 20th June 2009, 8:37

      I wouldn’t be too sure that Bernie is heading anywhere. He is very wiley and will be thinking of a way out of this to his benefit.

  2. matt said on 20th June 2009, 2:10

    Wow, Mosely says he’ll sue fota. Funny, a couple of days ago he said they were welcome to leave. Now that they’ve taken him up on his offer he’s decided that they can’t leave, but he won’t negotiate them to participate, he’ll use force. I actually hate him for being such a ridiculous facist. He’s taken it so far as to drive them away, but apparently that isn’t enough and he thinks he can bring teams back by dragging them through court. How can he honestly believe that they will want anything to do with F1 when he does this. I can’t forgive him for doing this to the sport that I love and hoped one day to work in.

  3. mp4-19b said on 20th June 2009, 4:05

    is he really sueing FOTA? but do they have a binding contract? if they don’t they are all free to walk away after this season. Max mosley thinks the teams are some sort of bonded laborers? i’ll perhaps rephrase it, maybe he thinks the teams are his sex slaves? god damn you max!!!

  4. James H said on 20th June 2009, 4:40

    As far as I’m concerned, the FOTA breakaway series will be the new F1, and the FIA series will be the new A1 or Cart. Hopefully this might mean that we might see some beautifull cars in the breakaway?

  5. Russell said on 20th June 2009, 5:48

    Very funny YouTube video. You have to see this!
    http://www.youtube.com/watch?v=fO8TLBn7z1k

  6. The Limit said on 20th June 2009, 5:58

    Even the most ardent FOTA supporter would have to agree with Keith in that a ‘split’ is the worst case scenerio for Formula One. However, as I see it, F1 could collapse if the formula stays in its present guise unchanged.
    You basically have a governing body so far out of the loop that it is no longer funny, treating their teams
    that they govern with contempt. As far as I see it, you have the teams so angry and upset at the way Max Mosley
    is conducting himself that they are prepared to go their own way.
    I don’t believe anybody has any elusions. Splitting F1 in two would only dilute the sport rather than strengthen it, in an economic environment so volatile it is beyond belief. Teams such as Ferrari and McLaren know this only too well, but they also realise that for them to continue in F1 Mosley must be desposed of.
    The biggest fear for FOTA is that Mosley stays in power beyond 2009 for another term as FIA president, bucking the trend and defying his enemies as he did after last year’s sex scandal.
    The damage being done to this sport is almost unbelievable. The countless, almost bewildering intervention from the sports governing body has overshadowed the sport for the last two years or more in an unhealthy way.
    Its the one racing series in the world where the officials are talked about more than the ontrack action, and the president has the alure of a circus clown.
    I would love to see F1 stay F1 and for the FIA and Mosley to sink without a trace. The tragic fact is that this is not going to happen. When you have teams such as BMW Sauber and Toyota spending billions of dollars in car development, not even having their opinions heard or respected then you have problems. For all that money spent, the teams deserve the right to have a say in the direction the sport should go.
    At the end of the day, this saga is just going to run and run to the end of the season. You can bet your bottom dollar that Bernie Ecclestone is going to move heaven and earth to resolve the matter, and save ‘his’ championship from almost certain ruin.
    The best way for this to be resolved would be to elect a new FIA president and to do alot of boot licking. Mosley was a fool for suggesting Ferrari were
    unimportant to F1′s future, and for not informing the teams of the 45 million euro a year budget cap.
    They really believe that FOTA are bluffing and that they will eventually bow to their needs. They are seriously mistaken. I will certainly support a breakAway series, if it does indeed comes to pass, just to spite those who caused the split in the first place.
    The bottomline, is that this is not rocket science. Other sports govern themselves just fine, and make a profit that more than one person benefits from, why can’t Formula One?

    • Russell said on 20th June 2009, 6:08

      I’ve just been reading up on the finances behind F1GP, and it is now clear to me that the economic climate is putting the squeeze on the sport itself, causing CVC to put the pressure on Bernie to reduce costs.

      The ultimate UK holding company of CVC’s F1′s interests is an entity called Delta 3, which in 2007 collected a total income of $938m from Formula 1, partly from hosting fees the circuits pay to run a F1 race, which range from $3.75m for Italy to $37.75m for Malaysia (but also believed to automatically increase by 10% every year), which bring in a total of $329m, with a further $380m from media rights. Add in corporate hospitality, which makes $140m annually, and trackside advertising, and you get your $938m.

      On the expenses side of the balance sheet in 2007, the F1 group’s biggest single overhead is payment to the teams of 50% of all underlying profits, making them “equal participants in the success and failure of the series”, said Nick Clarry, CVC’s UK managing director in November 2008. Crucially, he added: “In a worst case the impact on the bottom line is lessened by a reduction of our largest cost item.” Therin lies the clue that drives the current debacle.

      However, and this is the crux of the problem for CVC, is that Delta 3, having doled out $469m to the teams, was left with a similar amount to pay its operating costs and manage the huge loan. In fact, it paid off just $95m of the loan principal and made $260m in interest payments.

      When, 12-18 months ago, the teams started demanding an 80% share of all underlying profits, this set alarm bells ringing at CVC: This would mean an additional $300m annually from CVC. Were this to happen, CVC would have just $200m to cover operating expenses, service the debt and pay off the huge loan. Clearly if the teams were to get their way, CVC would not be able to even make its current loan interest payments.

      And with many tracks walking away from Bernie’s +10% annual fee escalator (e.g., Indianapolis, Montreal, Hockenheim, Imola), revenue for 2009 may decline over 2008 after surging 42 percent between 2003 and 2006. Although Abu Dhabi will pay about $45m to host the season-ending race in November, the injection of government money won’t continue. CVC are clearly heading for serious trouble.

      Add into this mix the collapse of F1 corporate hospitality this year as requests for hotel bookings fell 80% compared with last year for a race in Barcelona and by 50% for the Monaco Grand Prix. Executives don’t want to be seen living it up in Monaco while they fire staff back home.

      A default on debt covenants would put F1’s commercial rights in the hands of the institution that leant the money in the first place, RBS. This a bank that went bust in the 2008/09 financial meltdown, forcing the British government to take a 70% shareholding in it on 19 January, 2009, effectively nationalising it. This would be extremely ironic, given that the British government refuses to invest in even the British Grand Prix.

      The fear of this happening is what started Bernie, as F1 point man for CVC, down the road of cost-cutting. It wasn’t Max’s idea at all. If the teams were to lower their operating costs, Bernie reasoned they wouldn’t have any grounds to argue for 80% of a $938m pie; their current 50% split of the underlying profits between ten teams would give each team, on average, $47m or €34m, a team budget figure suspiciously close to Max’s budget cap…

      All it required was for Bernie to sow the seed of a budget cap idea with his mate Max, and CVC’s debt repayment problems would be solved. Cleverly, in a typical diversionary tactic, Max repeatedly keeps banging on and on about how the current recession means that the manufacturers must be told how much they will be able to spend, lest they go belly up. He makes no reference to the truth that it is in fact the sport that will go bust without his budget cap, not the teams. Such arrogance is typical of Max.

      However, now that FOTA has said it’ll set up an alternative championship (and one that does not come with $2.4bn of debt), CVC’s ability to make its annual debt payments would be nonexistent if 80% of F1′s established participants deserted it, as one would expect to see a commensurate fall in track fees, media rights, hospitality and advertising.

      Williams’ CEO Adam Parr has admitted it is “going to be very difficult to raise sponsorship revenues” in a 2010 FIA F1GP without the pull of the FOTA teams. He insisted that Williams did not regret sticking with the FIA series, because of the money it gets from Bernie and CVC. Obvioulsy he has not yet worked out that this money source is the first to dry up when revenues get tight for CVC, as they will do.

      Of course, ultimately, the FIA’s big mistake was allowing the sale of the commercial rights to a heavily leveraged third party in the first place. They had a right of veto over the onward sale of the rights to CVC Capital Partners and they could have used it, arguing that sale to a company which had to become so heavily indebted to buy the rights was bad for the sport. As indeed it has proven to be…

      As things stand now, if FOTA’s alternative series goes ahead, CVC is dead in the water, with the British taxpayer looking to pick up the pieces.

      • HounslowBusGarage said on 20th June 2009, 8:33

        Excellent analysis. Thanks for the insight.
        If CVC paid $2.4 bn for the rights, who received that money; was it Bernie?

        • Russell said on 20th June 2009, 9:24

          In March 2006 Bambino, Bernie’s family trust, netted $478m from the sale to CVC, but the three investment banks (JP Morgan, Lehman Brothers and Bayerische Landesbank) that owned 75% of F1 which they received by being creditors of its previous owner – the fallen media giant Kirch– – receiving the lion’s share, probably about $1.2bn. But don’t forget that Bernie also sold this in 1999/2000 to the previous owners to Kirch (who also went bust) for about £850m ($1.4bn).

          CVC also bought soon afterwards F1′s trackside advertising and corporate hospitality. These revenues flow into Irish and Swiss companies which were later acquired by CVC at an estimated cost of $350m.

          So the answer to your question is yes, over the years Bernie has received something like $2.8bn from flogging off various rights to F1. So whilst he’s been getting rich, Formula 1 has been getting a millstone round it’s neck, and now the sport can’t afford to pay the teams more than 50% of the total revenue stream, because the bankers are claiming almost as much to service the debt. So in order for it to survive we have to turn it into Formula Cosworth, something that is a long way from Formula 1 and the pinnacle of the sport.

          Clearly, both Max and Bernie have to go and have nothing to do with the FOTA champs.

      • dwp said on 20th June 2009, 11:52

        Can I quote your comments to others?

        I tried to figure out how to link direct to your comments but can only pull up this page with too many comments for someone to wade through.

        • Russell said on 20th June 2009, 12:10

          I don’t think you can set an anchor to link to a specific comment, so your only option is to use copy and paste…

      • Martin said on 28th June 2009, 20:56

        @ Russell,…Williams’ CEO Adam Parr has admitted it is “going to be very difficult to raise sponsorship revenues” in a 2010 FIA F1GP without the pull of the FOTA teams. He insisted that Williams did not regret sticking with the FIA series, because of the money it gets from Bernie and CVC. Obvioulsy he has not yet worked out that this money source is the first to dry up when revenues get tight for CVC, as they will do.

        This is a very interesting and telling piece of info especially when you tie it to the fact that the FIA(Max) awarded Williams the contraxct to build the F2 chassis for the series, which could be a very locrative source of income for chassis and spres for the series.
        Williams should have remembered that when yu lay down with dogs, you wake up with fleas.

  7. snoopy said on 20th June 2009, 6:12

    I just did read something about tradeamarks. Bernie try to make everybody believe that he owns name ‘F1″ but he does not lol.

    In 2007 cour order says that “F1″ is not tradedmark so it can not be owned so everybody can used it as much as they want. Means Fota can have F1 race ..example FOTA F1 race and Bernie can not stop that.

    FIA is stupid if they try take FOTA to court in Europe. EU is not happy with Max and its go back to middle of 1990 allready.

    In 2000 Max even did threat that he will take races out from Europe.

    Funniest part of that was that Eu comission was blaiming FIA and Bernie about braking law of competition and that is what now FIA will sue FOTA for lol.

    This is real Soap opera

  8. Dorian Black said on 20th June 2009, 6:44

    What a laugh. Who would watch F1 if Williams is your biggest team?

    The leaders of F1 have completely lost touch.

    I hope FOTA is successful. I am sure that with good management within a few years they could easily run F1 out of business, because who are you going to watch, Ferrari vs BMW vs McLaren vs Brawn OR Williams vs Force India.

    I really hope this is a declaration of independence moment, and not just a negotiating tactic.

  9. mp4-19b said on 20th June 2009, 8:05

    “What a laugh. Who would watch F1 if Williams is your biggest team?”

    probably you have forgotton that williams were the most dominant team in the 90′s. i would certainly love them to come to the top & dominate the sport once again.
    sad that williams were cast out of FOTA. they are a legendary team, producing some of the sports greatest cars & drivers. it would be good if they jump the ship right now. infact williams have won more constructors title than mclaren. its a pity that they are not part of FOTA anymore. just for the record williams have 9 WCC to mclarens 8.

    • Journeyer said on 20th June 2009, 8:22

      While that is true, when was the last time they won a race? 2004. The last time they won any titles? 1997. The last time they finished in the top 3 was 2003.

      While they’re doing OK this year, this is not the same Williams of old we knew. They were always competitive when they had manufacturer partners (Honda, Renault, BMW). While Toyota supplies their engines now, Toyota look after their own team first before they do Williams.

      Williams may have a lot of history and tradition behind them, but sadly, they’re not as relevant as they used to be. Williams alone cannot make me watch a FOTA-less F1.

    • scunnyman said on 20th June 2009, 9:22

      Yes it would be nice to see Williams at the front again. But it would be quite hollow if all theri opposition were b rated teams.

    • F1Yankee said on 20th June 2009, 15:14

      he didn’t forget, he never knew.

  10. mp4-19b said on 20th June 2009, 16:53

    had martin brundle crashed this mclaren-mercedes, all these problems wouldn’t have arisen. so i blame martin brundle for the current FIAsco!!!

    http://www.youtube.com/watch?v=HbyuRxE0_Z8

  11. Stuart H said on 20th June 2009, 20:40

    Just a few quick points to add….
    - I think this is a good time for FOTA to overhaul the technical regs. Unfreeze current engines and derestrict aero as a first step.
    - It will be the fans who dictate which series will succeed.
    - Can we make the first step by referring to FOTA as ‘F1′ and the existing FIA F1 as ‘Mad Max’s ****** Up Formula’ or MMFUF for short.
    - Does anyone own the rights to F.1? or Formula.One? Or F0rmula 0ne (replace the letter O with the number 0)

  12. mp4-19b said on 21st June 2009, 5:54

    this is the 600th post!!!!

  13. Hey – I’m talking to a tremendous amount of site owners to discover out if they have heard nearly practically anything regarding the substantial web site engine change which is inside the works? With WP releasing 3 fairly shortly, the phrase on the road is that BE is going to make a ton of alterations that appear like WP changes. Shoot me an e-mail at as soon take heed to a single thing.

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