FOTA trouble is good for Bernie Ecclestone

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Christian Horner, Bernie Ecclestone, Red Bull, Interlagos, 2011

Christian Horner, Bernie Ecclestone, Red Bull, Interlagos, 2011

Ferrari and Red Bull have handed Bernie Ecclestone an early Christmas present.

The news that two of F1′s richest teams have left the Formula 1 Teams’ Association in a dispute over the Resource Restriction Agreement is a potentially mortal blow to FOTA.

With discussions pending over the new Concorde Agreement – the document governing how F1 is run – Ecclestone now knows the teams won’t necessarily be presenting a united front to safeguard their interests.

Yesterday both Red Bull and Ferrari issued statements stressing the important of controlling costs. It’s hard to take that at face value when they’ve abandoned the body which is best-placed to agree on future cost reductions.

Ferrari and Red Bull abandon the RRA

On the Friday of the Brazilian Grand Prix weekend Horner expressed hope that a solution could be found to the disagreement over the RRA:

“We met this morning and it has been decided that the RRA has effectively been taken out of FOTA for the time being, to try and achieve a solution.”

He added: “I think an RRA is important for Formula 1 and I think all the teams are unanimous on that. I think the thing that isn’t quite clear is how to achieve it in a way that fits everybody’s business models, that some of the teams are different, and I think the key thing for us is that the treatment and transparency of it is consistent and obvious and probably needs to go beyond the chassis and incorporate the engine as well.

“You can’t cherry-pick, you need to look at the package as a whole. Hopefully, in discussions prior to the end of the year a solution can be found but I think that inevitably we come more under the spotlight because, as I said earlier, perhaps if we hadn’t had as much success this year then it would be less pertinent but that’s the way of the world, but from a Red Bull point of view we’re keen to find a solution and we’re hopeful that one can be found between now and the end of 2011.”

Horner had previously played down the important of FOTA, saying in a joint interview with Bernie Ecclestone earlier this year he “doesn?t spend too much time thinking” about the teams’ organisation.

Whereas Ferrari’s hostility to resource restrictions such as limits on testing is no secret, on the surface it may not appear obvious why Red Bull might be dissatisfied with the status quo.

Testing and resource restrictions have not kept them from winning back-to-back constructors’ championships plus a pair of drivers’ titles for Sebastian Vettel.

As Horner alluded to, Red Bull have been vexed by insinuations (some originating in Maranello) that they have not respected the RRA and therefore have unfairly earned their success. None of these claims have been backed up by proof, but they highlight a fundamental weakness of the RRA – the difficulty of assessing who has stuck to the cost controls.

Engine development

Beyond maintaining the existing RRA, teams faced a further challenge in incorporating the new engine rules for 2014. We may be more than two years away from the first race with V6 engines and highly complex new energy recovery systems, but development of the units began months ago.

Under the current engine freeze the RRA has little effect on engine development. But the prospect of teams building new engines for 2014 presented a complicated challenge.

The difficulty of finding a fair formula to extend the RRA to include engine development beyond the current frozen-specification V8s is plain to see. Next year four teams will be supplied by Renault, three each by Mercedes and Ferrari and two by Cosworth. On top of that, Ferrari and Mercedes have their own F1 teams but Renault and Cosworth do not.

Renault’s Jean Francois Caubet explained last week: “We want to avoid the same situation we had three or four years ago.

“I think in the cost of engines, you have fixed and variable costs. All the people are selling the engines on the variable costs, so if you control the fixed costs it will be easier.

“We agree with Mercedes to share the same philosophy with Ferrari. It is a little bit late because all the investment for the 2014 engine has started, but the problem will be after 2013, probably, to accept the RRA.”

Advantage Ecclestone

Red Bull and Ferrari’s decision to leave FOTA and, therefore, ditch the RRA, leaves McLaren and Mercedes with little choice other than to follow their lead. The only alternative would be to tie their hands by continuing to restrict their spending, which looks unrealistic.

But the impending collapse of the RRA and FOTA has ramifications beyond just unleashing a fresh frenzy of spending by F1′s richest teams.

With the teams poised to negotiate a new Concorde Agreement, Bernie Ecclestone will be rubbing his hands with glee anticipating only having to deal with a weakened FOTA union.

If this all seems like history repeating it’s because it is. Past F1 teams unions – including one run by Ecclestone himself in his Brabham days – have always ended with a split.

The next step is for Ecclestone to pull his usual trick of offering Ferrari a preferential deal to stay in Formula 1, eventually leading to the capitulation of the remaining teams. And don’t be surprised if a few more items on Luca di Montezemolo’s shopping list – more testing, three-car teams – appear as well.

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69 comments on FOTA trouble is good for Bernie Ecclestone

  1. Gridlock (@gridlock) said on 3rd December 2011, 16:24

    Fair comment Keith, but i can’t help but feel that as ever there’s so much to this decision (in the context of the CA) to which we will never be a party that any comment is hard to accept. I believe Audi are out of the picture now for instance but their unannounced intents being the basis for the move to an I4 originally is a good example; only when they pulled out and the teams moved unanimously to the easier-to-work-with v6 did the i4 thinking become obvious.

    BTW you’ve substituted Renault for Ferrari in the list of engine suppliers, confused the hell out of me ;)

  2. Fixy (@fixy) said on 3rd December 2011, 16:28

    Next year four teams will be supplied by Renault, three each by Mercedes and Renault and two by Cosworth.

    I think the second Renault should be Ferrari, @keithcollantine! And there are some “important” that should be “importance”, such as:

    Horner had previously played down the important of FOTA

  3. Fixy (@fixy) said on 3rd December 2011, 16:30

    If all teams need to agree to the Concorde Agreement, then what’s the benefit of splitting up? Is it that Ferrari and the other teams have different interests in testing, and while Ferrari has been part of FOTA there has been a ban of in-season testing, and now that Ferrari are no longer there they can ask for more testing and the other teams will be forced to allow some?

    • BasCB (@bascb) said on 3rd December 2011, 18:49

      But the test ban is now part of the FIA rules, so its not sure Ferrari can change much to it, at least not short term.

      It might still be a knifes on the table, act tough negotiation tactic to get Mercedes and McLaren moving closer to what RBR and Ferrari want (tough, as RBR and Ferrari seem to have quite different expectations of the RRA).

      But if these teams leave FOTA, there really is nothing to keep Bernie from signing up Ferrari and then Red Bull to a new Concorde Agreement and then go about picking off the teams one for one until he just tells the rest they either sign up to “his” series or be out.

      • Fixy (@fixy) said on 3rd December 2011, 21:59

        Thanks @BasCB for enlightening me on the rule. What I wondered about is if Ferrari now will sign the Concorde Agreement only if they have testing back, the FOTA teams want no testing, so they should find a way in between, which would favour Ferrari anyway.

  4. cduk_mugello (@cduk_mugello) said on 3rd December 2011, 16:33

    I try not to get too involved in these discussions, because I think it’s very hard to interpret what’s actually going off beneath the surface.

    I will say though that Ferrari should only be concerned with satisfying their own interests – as every other team should be. They can’t really be criticised for acting in a way that will do so.

    • John H (@john-h) said on 3rd December 2011, 18:38

      I believe you’re advocating the ‘Gordon Gekko’ approach to business (I’m classifying F1 as a business here which it is).

      I’ve not studied economics but I’m pretty sure that approach doesn’t end up being the correct one in the long term

      • cduk_mugello (@cduk_mugello) said on 3rd December 2011, 21:19

        @JohnH

        Well it’s not really an approach to business, more an approach to international relations – that states ultimately only look after their own interests.

        If I was the boss of Ferrari, I’d only want to be concerned with the interests of Ferrari – whatever they are defined to be.

        • JerseyF1 (@jerseyf1) said on 4th December 2011, 20:45

          But it is in Ferrari’s interests for there to be an F1 Championship which attracts significant viewership and hence sponsorship. Unlike a conventional business which is looking to take an increased market share of a fixed market size, in this case Ferrari acting purely in its own interest does involve considering the continued survival of the other teams since the outcome would otherwise be an increased market share of a smaller market which may be less lucrative than a smaller share of a larger market.

          I agree with the premise that Ferrari should only look after its own interests, but in fact it is in Ferrari’s interest to ensure the continued survival of the smaller teams.

  5. Fer no.65 (@fer-no65) said on 3rd December 2011, 17:05

    I never understood the costs reduction polity as a viable one, because I can’t see them agreeing in a way to control how much all the teams spend.

    It’ll always be very difficult to do it and it’ll never be transparent enough, as far as I can see.

    The whole RRA affair seems a bit unrealistic.

    • Maksutov (@maksutov) said on 4th December 2011, 0:07

      I can’t see them agreeing in a way to control how much all the teams spend.

      That’s the thing, it is impossible to control and, as you say, it never will be.

      The only way to control it is if teams have the agreement they had.

  6. infy (@infy) said on 3rd December 2011, 17:18

    Why so many anti ferrari opinions Keith? Times change and it could very well be Red Bull or Mclaren who get the special deals this time around…

    • Fer no.65 (@fer-no65) said on 3rd December 2011, 17:30

      it’s hard not to hate them, really.

    • AndrewTanner (@andrewtanner) said on 3rd December 2011, 19:47

      @infy I dont’ think this article is anti-Ferrari. LdM just has a terrible habit of being the most vocal, therefore giving you plenty to argue with. Plus, he’s the most obvious when it comes to pushing his own teams agenda. Like him wanting to push F1 for GT car development? Clearly, that’s not really applicable to most teams on the grid.

    • Keith Collantine (@keithcollantine) said on 3rd December 2011, 21:34

      @infy

      Why so many anti ferrari opinions Keith?

      I don’t know what you’re referring to.

    • JerseyF1 (@jerseyf1) said on 4th December 2011, 20:55

      I don’t think it’s anti Ferrari, it’s clear this is how the process has worked in the past and Ferrari has done well out of it.

      I was wondering, however, why the remaining FOTA teams (plus HRT) don’t get together with Bernie and agree to sign up early as long as certain cost restrictions are set at that time. Last time round Bernie scuppered the breakaway by signing Ferrari plus a couple of other teams. I’m sure it would work in reverse with Red Bull and Ferrari if he could collar 10 of the 12 teams giving them no choice but to sign up to the series.

      Granted the other teams lack the “historical significance” of Ferrari which was considered important in scuppering the last breakaway, but I think having any 10 teams signed up is enough to mean the show still goes on.

  7. CNSZU said on 3rd December 2011, 17:26

    The RRA is stupid, and doesn’t belong in F1. This racing series is all about who can get the biggest sponsors, the best engineers, the best drivers and put it all together in a winning package with the goal of crushing the rest of the grid. It ain’t socialism.

    • Shimks (@shimks) said on 3rd December 2011, 19:16

      Quote of the Year.

    • AndrewTanner (@andrewtanner) said on 3rd December 2011, 19:48

      You then risk alienating future sponsors if they see one team being particularly dominant. I don’t want to see the rest of the grid crushed by money. I want to see the rest of the grid crushed by talent and expertise.

      • sid_prasher (@) said on 3rd December 2011, 20:01

        I agree. Its a bit baffling that RBR will want an increase in expenditure. I think all teams want to reduce costs…the difference in opinion is likely on where to cut these costs from…

    • This racing series is all about who can get the biggest sponsors, the best engineers, the best drivers and put it all together in a winning package with the goal of crushing the rest of the grid.

      But in the current economic climate it’s a nightmare and for the sake of F1 it has to be able to attract new teams and with uncontrolled spending the likelihood of that happening seriously decreases. Although on a personal level I disagree anyway as I think talent should talk and not money but that’s never going to happen anyway.

      • Maksutov (@maksutov) said on 4th December 2011, 0:21

        But seriously. Let’s think about it. For the past 2-3 years we’ve had the RRA. How did that help the smaller teams? They were still at the back of the grid and stayed there through out the season.

        The reality is, RRA does not necessarily help the small teams. The end result is the same even if RRA was not in place. Sponsors will be there regardless.

        Also, I am not sure if many people are aware, but talent = money. If you want the best engineers and the best team, then you have to pay for it. RRA does not and cannot control that.

        • Mike (@mike) said on 4th December 2011, 1:54

          And how big have the gaps been?

          The RRA won’t effect it much, but this, combined with everything else that pulls the top teams back will help the smaller ones.

          talent = money

          That’s obviously wrong.
          Examples,
          Toyota had money, not that much talent.
          Torro Rosso has talent (punching above their weight) but not so much money.

          • Maksutov (@maksutov) said on 4th December 2011, 13:34

            That’s obviously wrong.

            talented people normally end up going where the most money is, that is the reality. it is up to individuals to recognize which are the most talented.. but having more money certainly helps.

    • Fisha695 (@fisha695) said on 3rd December 2011, 20:24

      I agree with scrapping the RRA. This is Premier Level International Motorsport, it should be a “Rich mans game” and you should be able to spend & do as much as you can to win.

      If you can’t spend that much or you don’t want to spend that much then stick to the Developmental Leagues and Spec Leagues.

      And the only thing that is driving sponsors out of the sport or “encouraging” them not to enter the sport is the stupid and outdated livery rules about both cars having to have the same livery & sponsors.

    • cduk_mugello (@cduk_mugello) said on 3rd December 2011, 21:21

      @CNSZU

      I think you summed it up perfectly. This is the premier class of motor racing, not go-karts. It’s why I think unlimited testing should be re-allowed

    • Keith Collantine (@keithcollantine) said on 3rd December 2011, 21:44

      F1 fans arguing for unlimited spending and testing in F1 are like turkeys voting for Christmas.

      Don’t come crying to those of us with more sense when one manufacturer prices the rest of the competition out of the sport. We’ve seen it happen before, not just in F1, and it’ll happen again unless sensible measures are taken to control costs.

      It’s easy to put on your rose-tinted spectacles and say ‘it should be like it was in the good old days’. But what you’re arguing for would only damage F1, certainly in the current climate.

      • snowman (@snowman) said on 3rd December 2011, 21:46

        “F1 fans arguing for unlimited spending and testing in F1 are like turkeys voting for Christmas.”

        Classic :)

        • Adam Hardwick said on 3rd December 2011, 22:34

          I agree to an extent. I agree to a limit to spending, but I feel that the allowance should be spent where teams wish, and that aerodynamic and performance limitations should be replaced with an explicit liability for driver safety. This would level the playing field, and ensure that the sport would remain the realm of those who can send a car/ driver safely round a track as quick as they can.

      • Magnificent Geoffrey (@magnificent-geoffrey) said on 3rd December 2011, 21:51

        For a number of reasons, I agree.

      • Hairs (@hairs) said on 3rd December 2011, 22:28

        Excellently put, Keith. We have had some of the best racing in decades lately, and it’s in large part down to the teams agreeing to approach the sport in a more fair manner, where one team cannot out-spend, out-test, and out-politick the competition (as Ferrari did at the turn of the century). Where instead of having two number 1 drivers from the same two teams fighting it out every year, we have multiple drivers from multiple teams fighting for position, and actually having a chance of winning. Vettel has blitzed this year but that’s down to him, more than any other factor (Webber is eminently beatable in the same car, after all).

        If you want to get back to the “best in the world” philosophy, loosening the mechanical and electrical restrictions on the regulations, and tightening the aero regulations, would have a much more interesting effect on car development, and advantages would be gained more by clever ideas and problem solving instead of “who’s got the best CFD cluster and wind tunnel”

      • US_Peter (@us_peter) said on 3rd December 2011, 22:48

        ^THIS^ is in fact the comment of the year! @keithcollantine FTW!

        I can’t imagine why any fan would wish for that kind of disparity. Haven’t we learned by now that that doesn’t work in F1?

      • Maksutov (@maksutov) said on 4th December 2011, 0:31

        unless sensible measures are taken to control costs

        Can you clarify, what are some of these sensible measures that can be implemented with a RRA?

        The only realistic and sensible measure to control resources is the “rules”, on what you can and cannot have mounted/implemented on the car. This like test ban is now part of the FIA rules. So the RRA is not necessary. It can not be policed and therefore it only causes mistrust and confusion between teams.

      • cduk_mugello (@cduk_mugello) said on 4th December 2011, 0:41

        @KeithCollantine

        Why is it you have to get so personal when you disagree with others? There’s simply no need to be so obnoxious.

        This isn’t about rose-tinted spectacles, or you having more sense than everyone else. And as yet I’ve never come crying to you.

        ..when one manufacturer prices the rest of the competition out of the sport. We’ve seen it happen before..

        Please enlighten us with less sense than you when this has happened in the recent history of F1. Off the top of my head, I can’t remember one manufacturer forcing every other constructor out of F1.

        • Mike (@mike) said on 4th December 2011, 1:58

          I can’t remember one manufacturer forcing every other constructor out of F1.

          Ferrari years 2000-2004.

          :D I believe that counts?

          • During those years, i think the biggest spenders were Jaguar… Ferrari and McLaren didn’t spend a whole lot different amounts during those years. If you could get numbers, it will be actually quite close. They were close second and third, closer than many would like here on a very pro McLaren forum. Williams, were 4th largest spenders during those years.

          • EDIT: What Ferrari did have, and unquestionably so, was a testing advantage with a track right at factory and another, not so very far. This is what actually sparked a whole bucket load of rule changes, which sought to negate the advantage Ferrari had.

        • Keith Collantine (@keithcollantine) said on 4th December 2011, 9:28

          @cduk_mugello

          Why is it you have to get so personal when you disagree with others?

          No idea what you’re talking about. I haven’t made any personal remarks towards anyone.

      • PieLighter (@pielighter) said on 4th December 2011, 14:46

        @keithcollantine – Comment of the year!! we should start a campaign for the rest of the day to get Keith to make that COTD in tomorrow’s roundup, because otherwise, if he did it without being asked, he would be accused of that disgusting b- word with 4 letters.

    • MahavirShah (@mahavirshah) said on 4th December 2011, 7:45

      But would F1 be cost effective anymore. It may come down to a situation where unrestricted spending may force most of the teams out. Bernie’s series might become a 4 or 5 team arrangement of 3 cars each on tracks that provide no good racing.

  8. Eggry (@eggry) said on 3rd December 2011, 17:29

    Next year four teams will be supplied by Renault, three each by Mercedes and Renault and two by Cosworth

    I think it(Renault) should be Ferrari after Mercedes, Keith.

  9. verstappen (@verstappen) said on 3rd December 2011, 17:31

    I don’t know, but I have à feeling that there’ll be some surprising outcomes from all this.
    I hope not three- or customer car teams…

  10. Eggry (@eggry) said on 3rd December 2011, 17:42

    so a priority issue is engine developing? If what I understood is correct, Ferrari, Mercedes, Renault all agree with engine development and RRA should be sorted out. also Is it the reason why Red Bull leaves from FOTA because they’re now developing new engine with Renault Sport F1 which is not F1 team but actually making Renault-branded engine? That makes sense.

    However I think this disagreement would favour Ferrari’s interest as Keith said. If there’s disagreement, Bernie can deal with Ferrari himself excluding other teams and then impose it to others. The only way to prevent Bernie(or Ferrari?) is strong alliance of all teams or except Ferrari but as we know it already failed due to RRA…

  11. manik56 (@manik56) said on 3rd December 2011, 17:55

    What a European thing to do. Bickering, fracturing, and weakening. No one sees the greater good. At least no one is going to die from this stupidity.

  12. snowman (@snowman) said on 3rd December 2011, 17:59

    “Red Bull have been vexed by insinuations (some originating in Maranello) that they have not respected the RRA and therefore have unfairly earned their success.”

    The highly respected German auto-und-sport has printed some pretty big accusations against Red Bull. If even they are half true I don’t blame Ferrari for pulling the plug. It seems Ferrari and Mercedes and to a lesser extent McLaren have stayed within the RRA where as Red Bull haven’t in many areas. Horner knows nothing can be proved because Red Bull Racing won’t let themselfs be audited.

    • hays33d (@hays33d) said on 3rd December 2011, 18:21

      What is the evidence that Ferrari and Mercedes have been true to the RRA? Because journalists aren’t checking & focusing on RBR or they can’t get information from those other teams? No team is being audited (nor is likely to consent to it). If we are going to speculate, I speculate that Red Bull is getting the attention because they are winning and that all the big teams are cutting corners on the RRA because it is unenforceable. Winning brings the scrutiny. It doesn’t mean everyone else is playing by the spirit of the rules in a system that is flawed due to the lack of enforcement.

      As soon as Ferrari or Mercedes allows an audit, thus taking the high road they are promoting they have taken, I’ll believe they aren’t violating the RRA.

    • Keith Collantine (@keithcollantine) said on 3rd December 2011, 21:38

      @snowman Can you give any more details?

      I mean, accusing the world championship-winning team of cheating to claim the title is about as serious as it gets in F1, so I think we need something a bit more substantial than “so-and-so has accused them of it and I believe them”.

  13. AndrewTanner (@andrewtanner) said on 3rd December 2011, 19:50

    Honestly, I can see something being resolved. Perhaps not the FOTA situation, but something in the guise of the RRA.

  14. Prisoner Monkeys (@prisoner-monkeys) said on 3rd December 2011, 23:24

    I’ve always thought the RRA was a bit of a joke, to be honest. Every year, the teams comb through the technical regulations, looking for loopholes that will give them the edge. It’s how we got double-diffusers, F-ducts, flexing front wings and all manner of other aerodynamic trickery. And when they do find one, they spend the rest of their time trying to safeguard their ideas whilst getting everyone else’s ideas banned for being illegal. The Resource Restriction Agreement was just another document that the team could publicly get behind and honour, but privately delve through, looking for loopholes and trying to get everyone else in trouble over it, just as they do with the technical regulations. In the end, it’s all for show – a way that the teams can present themselves as being fiscally-responsible in a nightmare economy, when in reality they spend as much as they can, knowing full well that spending more means better on-track performance.

  15. HoHum (@hohum) said on 3rd December 2011, 23:32

    F1 is a development sport, it is as much about the constructor as it is about the driver, there should be no place in F1 for any team that cannot afford to test new developments at their local track. Even if you disagree you should think carefully about how much money is actually saved by making untested carbon fiber nose cone/wings for both cars + spares only to find they don’t work and a new different design will have to be manufactured for the next race and the next and the next add-infinitum, compared with spending 1 day at the track testing half a dozen prototypes in identical situations.

    • Dizzy said on 4th December 2011, 0:53

      there should be no place in F1 for any team that cannot afford to test new developments at their local track.

      Then you would be left with only about 5-6 teams as it isn’t just the newer 3 that don’t have the sort of cash avaliable to test every week.

      Plus don’t forget that one of the things that helped Ferrari get there years of dominance was the fact that not only could they afford to test every week but also had there own private track right next to there factory while other teams had to pay to rent a track to test at.

      I think another problem with bringing back a lot more testing is that you then get less running during race weekends through practice.
      Something we often saw Pre-Testing limits/ban is teams would turn up at a race weekend with some new development & because they had spent a few days before the weekend testing they saw no need to run much during practice.

      I remember been at Silverstone during Friday practice in 2004 in which hardly anyone ran because not only had they tested there new parts but most had also done that testing at Silverstone a week or 2 before so didn’t even need to run to change car setup.

      I would end by saying that something else to recall about testing is that the bigger teams can afford to test more so if you have a Mid-Field team like Force India or STR that can test but not as much as the biggest teams you then give the biggest teams a massive advantage.

      One of the great things the testing ban has done is bring the field closer together, When we had testing the gap between 1st-10th would be 2-3 seconds, Now its 1-1.5 seconds which has generated more on-track competition & better racing.

      • HoHum (@hohum) said on 4th December 2011, 23:29

        In response to point 1, do you really think the back half of the grid contribute to the quality of the racing? If you do that could easily be solved by allowing successful teams to supply customer cars.

        point 2. Who really cares if the cars do or don’t use the practice sessions?

        Point 3. There is a difference between regular testing, eg. 16 hours over 2 days between races and unlimited testing either of which would be preferable to no testing which as I explained is a false economy and finally Ferrari is not the only team located near a race track.

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