Crash.Net F1 News

Teams ‘screwed up’ by ditching unity in financial fight

21 September 2013

F1 team bosses admitted that they had missed an opportunity to both contain the cost of competition and create a more equitable split of revenues simply because the remained rivals off the track.

With the introduction of a new engine and drivetrain package for 2014 set to raise costs considerably, especially for those teams towards the rear of the grid, the push towards making the sport more affordable for all appears to have been abandoned, leaving those in charge to lament a lack of unity when it came to negotiating with both the FIA and rights holder CVC.
Ironically, it was the governing body that had initially championed the crusade for lower financial burdens, only to propose the costly switch to turbocharged 1-6-litre engine on environmental grounds for 2014. Not resisting that move was indicative of the teams' biggest failing, according to Caterham owner Tony Fernandes.

“I've been consistent since day one that costs are too high,” the Malaysian claimed, “When I came into F1, people talked to me about costs coming down, but I don't think there's been a single year [where] it's come down. I think next year will be probably the highest year, so I think there's something fundamentally wrong.

“I don't think it's just the engine, by the way, I think the teams lost out an opportunity to get costs under control. I think self-interest overrode the sport and we are as much to blame for this problem as an engine.”

With the points table reflecting the gulf between the top teams and those in the midfield in both performance and financial terms, there was an obvious air of frustration that all eleven parties could not have remained unified when it came to fighting their corner on costs.

“We are always talking of reducing the costs,” Toro Rosso's Franz Tost sighed, “On the one hand, we must say F1 is the peak of motorsport and we should come with new innovations… but the teams are stupid enough to decide to do tests during the season.

“This is totally a waste of money because we have eight test days and, as soon as the car goes out on the track, it costs money. But the teams want to do it. On the one hand, they're complaining they don't have money, and, on the other hand, they throw it through the window. It's a little bit difficult to understand for me, but we were voted down because we were against the tests. And who wants the tests? The rich teams - as usual!”

Lotus team boss Eric Boullier, who has never made any secret of the squad's struggle to balance its finances, agreed that the introduction of new technology was in keeping with F1's raison d'etre, but shared the frustration at the selfish approach taken by the leading teams.

“It's true that F1 is costing too much money,” he noted, “I do agree with Franz [that] F1 needs technology, [as] this is the pinnacle of motorsport, [but] I think, rather than blaming engine or not, it's more about the process, about how this technology has been developed and sold to the team, which should have been controlled more.

“Last decade, car manufacturers were in this place and the lowest budget in F1 was around $250m and the highest about $400m. Today, it's not the case anymore and the smallest budget is around $60m and the highest is around $250m but still, if you want to be competitive, you need to spend some money. This is a circle: you are not attractive, you do not bring in any new sponsors…

“So, where is the balance? I think it's a complicated debate. Obviously all the teams should stick together first, which is obviously something very difficult to do, and also sit down with Bernie [Ecclestone] and the FIA and make sure the regulations are stable at least for the next few years. I think in the new strategy committee we have a chance to voice what we would like to do. That's going to be the first step, to make sure we go to a sustainable F1.”

As well as failing to contain costs, however, the schism in the FOTA ranks, prompted by differences of opinion over the Resource Restriction Agreement implemented in a bid to control spending, has also weakened the teams' ability to negotiate a better deal on revenue sharing with rights holder CVC.

“I think the teams have demonstrated that they are not capable of being able to agree a cost control, so I think the answer is to take it outside of the team's control,” Force India's Bob Fearnley added pointedly, “My view is that the teams can't agree what day it is, never mind be able to agree cost-cutting measures... I think it's up to the FIA to decide a formula, bring that in and implement it.

“I think we've had wonderful opportunities and we've collectively failed to be able to bring the deals together. There's a certain amount of greed comes in from the top teams as well and I think they have to take some of the responsibility for that, but it is F1, it's not something that's new. There's never been any equality in F1, so you have to go out there and make sure it happens for yourself.”

Fernandes, meanwhile, talked of the opportunity that was missed by not sticking together, comparing F1 to football via his ownership of Queens Park Rangers in the UK's Premier League.

“The teams had a wonderful opportunity to try and create a fair, equitable split so that the sport is sustainable,” he claimed, “I'm obviously in another sport where I think the difference between the top and the bottom is not as great as between the top and the bottom in F1. The winner of the Premier League's share of prize versus the team at the bottom is not as spread out. I think [F1] teams had an opportunity but looked at things on an individual basis as opposed to working together in FOTA and trying to find a win-win situation for everyone, [to] create a very healthy environment in a sustainable sport. We screwed it up, it's as simple as that!

“There were numerous meetings, loads and loads of meetings, loads and loads of proposals, but, at the end of the day, some teams decided to split and, when that happens, it's a divide and rule situation and the whole thing falls apart. I don't think it was anything else but that. There was lots of unity at the beginning but, one by one, people decided to do their own thing.”

With Toro Rosso amongst those to quit FOTA, Tost, as usual, took a slightly more antagonistic approach to the debate, insisting that simply giving the teams a bigger share of the financial pie would only encourage them to spend more, potentially widening the divide between top and bottom.

“Each team has got the Concorde Agreement, at least from a financial side, and, if teams do not accept it, they don't need to sign it. It's as easy as that,” he pointed out, “And, if they sign it, they have to accept it. There's nothing to complain of from this side.

“I think, first of all, the teams should try to come down with the costs. It's easy to say 'yes, we should get more money' but, give the engineers one million and they ask for two, give them four million and they ask for eight million. It's something about the discipline within the teams and, as I mentioned before, we decide by ourselves to spend the money for nothing, as I explained with the testing. If the teams get more money, they go testing even more and, in my opinion, that's wrong.”

Both Tost and Claire Williams admitted that, while the problem of the teams remaining competitive on and off the track existed, there was unlikely to be a successful resolution to the debate, leaving Boullier to suggest that there had to be tighter restrictions on spending, especially if the teams were given access to a bigger share of the revenue.

“I share the view of the other team principals that we may have missed an opportunity to just sit down with the commercial rights holder and re-negotiate something which could have been more in favour of the teams,” he conceded, “We failed. We couldn't sit down together and clearly we missed the opportunity by not taking the chance to conclude the process.

“As Franz said, the more money you get, the more money we will spend if you don't have any safeguards around you. Your engineers will always try to find out the best way to be competitive and this is why we are paying them. But, at the same time, the more open the regulations are, the more we will spend money and waste money.”