May 15, 2009

FIA Blinks?

After today's failed meeting between the FIA and FOTA, and Ferrari's subsequent threats to lower the legal boom on the Federation, is reporting that Max Mosley is confirming that the "two-tier" (aka "Salary Cap") system is being abandoned, but only if all the teams agree to the $60 million dollar limit.

Which is better, I suppose, than having the two-tier plan, but not by much.  Talks will continue in Monaco on Friday, May 22nd, which is an off-day during the GP of Monaco race weekend.

Ferrari has filed an injunction with a French court to stop any attempt by the FIA to put a cap in place.  So, really we're still where we were before the meeting today, which took place without Ferrari President (and FOTA chairman) Luca di Montezemelo.  He was forced to withdraw from the meeting due to the passing of his father overnight... and our best wishes go out to the di Montezemelo family.

Where do we go from here?  The longer it takes, the more likely armageddon occurs.  Let's hope for a resolution next weekend.

Posted by: Wonderduck at 07:53 PM | Comments (10) | Add Comment
Post contains 182 words, total size 1 kb.

1 "The original idea was that new teams coming in would probably end up as mobile chicanes--much too slow--if we didn't give them some assistance."

Er, has he checked the 2009 leaderboard lately? ;p

It's not that he doesn't have a point, though. How many F1 teams operate at an actual profit? Not too many, I'll wager. That's okay when they're associated with car companies who are happy to spend some cash to get some advertising, and some -really- high-end performance trials, hoping that some of the technology will be something that can be adapted to their regular markets. But... that's less okay when sales are down everywhere and the super-high-end performance research looks like a fat target for cuts.

If there are additional teams that are willing to race under the cap (and Pete named three), that changes the situation a little. If F1 can field a full bracket even with teams breaking away, the chances for a breakaway championship go down significantly; this is especially the case if the dividing factor is purely "we want to throw tons of money at our cars" instead of a perceived technological disadvantage. If you're a race team who wants to make the jump to F1-style racing, which league are you going to sign on to? The one run by Ferrari, or the "real" league with a spending cap that your backers can afford?

The real question is, what are the other teams telling F1? You wouldn't expect them to come out and say "hey, if we don't get a cap, we're gone," as that would be a little bit humiliating, and nobody wants to come out and admit financial weakness. On the other hand, would we be seeing a push for instituting a cap if some of the teams hadn't been bucking for it? (Maybe, with these yahoos...)

But if F1 management is caught in a "damned if we do, damned if we don't" situation, it can probably face down Ferrari. Or rather, it probably has to; if Ferrari gets their way, half of F1 drops out because the money dried up, and Force India qualifies because there were only ten cars in Q3... what's left of F1?

Posted by: Avatar at May 16, 2009 02:46 PM (vGfoR)


...would we be seeing a push for instituting a cap if some of the teams hadn't been bucking for it?

Yes.  This is all Mosley's idea.  The only teams I've heard say anything favorable about the cap aren't actually in F1 at the moment: USF1, Lola, and Super Aguri (!) have been all for it. 

F1 is NOT a sport for the poor man.  Never has been, and shouldn't be.  You want to join a tour with a salary cap, get in IndyCar.  GP2 has fixed costs, maybe them?

Look, it's quite simple.  I'd really like to own sportscar, but I can't afford a Bugatti Veyron.  Should I be able to force Bugatti to lower the price to $30,000 (instead of $1 Million)?

Of course not.  If I want a sportscar for $30K, I'm not gonna get a Veyron.  If teams want to be in the premiere motorsports series in the world, they should be able to spend as much as they want.  If they don't want to spend it, they're in the wrong place.

Posted by: Wonderduck at May 16, 2009 06:22 PM (UdB9M)

3 You mean "the only ones talking about it in public", right? Of course the teams that aren't in can talk.

But if your team is worried, and your financial guys are talking to sponsors who want to pull out, or who DON'T want to pull out but are on the bubble themselves, financially speaking, are you going to start complaining in public? Where the rest of your sponsors can hear you and start thinking "maybe we need to do a deal with someone else next year"? Wouldn't it make more sense to put a quiet word in the ear of the guys upstairs?

Don't get me wrong, you've been following F1 a lot more closely than I have, and you might be right; they might be pushing this cap purely because everyone involved is a freakin' idiot. But Pete has a good point too - if it's important enough to them that they're willing to buck Ferrari... to buck Ferrari right out of the league... then there's got to be something driving it, right?

Posted by: Avatar at May 16, 2009 09:43 PM (vGfoR)


I think, Av, that it's very telling that NONE of the teams currently on the grid have said a thing in support of the plan.  Even Farce India, who'd probably benefit the most from it, has said nothing.  Ditto Williams, who financially is probably the weakest on the grid...

You'd think that if you LIKED the plan, you'd say something, right?  Particularly considering the flak it's gotten.  I'm actually not opposed to the idea, just don't call the result Formula 1.

The only team I don't expect to ever say anything one way or the other is McLaren.  They surely hate the plan, but considering the way they've been treated by the FIA recently, they're surely walking on eggshells.

Posted by: Wonderduck at May 16, 2009 10:55 PM (UdB9M)

5 Don't discount the possibility that what's driving this is Mosley's ego. That kind of thing has happened before in professional sports.

Posted by: Steven Den Beste at May 16, 2009 10:57 PM (+rSRq)


I'm sure it is, Steven.  He's trying to recover some of the luster lost from the Nazi Hooker Episode... if he succeeds in shoving the cost cap through, he'll be making the rebel teams back down (or back out) and showing who the true power in F1 is.

Too bad the true power SHOULD be with the Teams, not the governing body.  Oh, don't get me wrong, there should be rules, and the FIA is perfect for that, but they need to be run by the teams before being made law, and that's NOT what happened here.

Posted by: Wonderduck at May 16, 2009 11:13 PM (UdB9M)

7 How the heck can I fail to take ego into account? ;p

I dunno. There are sports that have done very well with salary caps (football, for example), but they're not quite the same as an expense cap; you can't "make" better football players by paying more, you just bid up the ones that are already there. Not really an analogous situation.

And like I said, I specifically expect that the teams that like the plan would shut the heck up about liking it, at least in public. If you're in favor of the cap, and it doesn't go through, what are you saying? That you don't have the financial chops to compete against teams that can throw $100 million/season into their cars? That you don't have confidence that you can run against that kind of competition? Why not just say "we are going to lose FOR SURE" while you're at it? Especially since we're in the middle of this season, and a next-season cap isn't going to help anything for months.

CEOs don't say "our stock price is going to tumble" even if they're pretty sure it is. In the same fashion, I wouldn't expect even Force India to come out and say "we don't have the finances to be competitive on the track," even if we know it's true.

It's probably significant that they're saying that there will be no refueling next season - not only that, but that they said that the reasoning behind the decision was that they wanted to save the money on transporting the fueling rigs. Seriously, if that's true, it's an example of the sport directly removing a decision that's of no small strategic importance purely for financial reasons. That's not something you'd do if everyone's finances were nice and healthy...

Posted by: Avatar at May 17, 2009 05:00 AM (vGfoR)

8 Av, Formula 1 has done the "no refueling" thing before, as recently as 2003.  Oddly enough, I don't have a problem with that particular rule change, either for economic or safety reasons.  There's been a lot more seasons run without refueling than with, historically.

They may be saying that they're cutting refueling out to save the teams money on moving the rigs, but guess what?  The FIA, not the teams, pays the transport costs for the fuel rigs, and they've got no money problems at all.

If you're in favor of the cap, and it doesn't go through, what are you saying? That you don't have the financial chops to compete against teams that can throw $100 million/season into their cars?

Good thought, but wrong scale, Av.  These days, F1 bottomfeeders have a budget of $100 million/season.   The big budget teams like Ferrari or McLaren or Toyota, they're in the $400 million/season range.

So yes, you ARE saying that you can't compete with a team that spends HALF A BILLION DOLLARS a season... and nobody would blame a Force India for saying that at all, because they obviously can't.  All their improvements over the offseason brought them from four seconds/lap slower than the polesitter to... one-and-a-half seconds/lap slower.  It's an improvement, sure, but they're still more than a minute behind by the end of the race.

So, yes, I still would expect a team to come out and say that they're in favor of the cap.  If nothing else, it'd level the playing field for all teams.

I'd hate it, but it would do that.

Posted by: Wonderduck at May 17, 2009 06:56 AM (hlGBx)

9 McLaren was hit with a $100 million fine last year, and paid it with no visible signs of distress.

Posted by: Steven Den Beste at May 17, 2009 07:09 AM (+rSRq)

10 Good lord. If the scale's that disproportionate, no wonder people are unhappy about the cap.

Posted by: Avatar_exADV at May 17, 2009 12:38 PM (pWQz4)

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