Ah, the politics of Formula 1. Did you miss it?
Formula 1’s new owners have had a relatively smooth run of things over their first year holding the keys to the candy store, but the past week has highlighted old divisions which remain at the heart of this sport’s most complex of soap operas. The tipping point, as widely expected, has come in the form of the proposals for a new engine formula from 2020 or 2021. They had been mooted for some time and should have come as little surprise, but with first Mercedes, then Renault and lastly Ferrari stating their objection to the new path, the wheels have been set in motion for a stand-off – and Liberty’s first major political test.
If one thing is clear, it is that there are very few, if any, within this paddock who wish to see the engine regulations remain unchanged. The hybrid era has brought little to the on-track excitement of the sport, and Liberty’s prime focus is on improving the spectacle and what we know as “the show.” Aligned with this is a fervent desire to bring down costs and to open up the capability for new engine manufacturers to enter the sport. Honda’s abject failure to get on top of the formula shows how flawed the current situation is, and acts as a tremendous warning shot across the bows of anyone who might wish to enter the sport and be competitive.
Liberty’s suggested route for future technical regulations is thus to maintain much of the current rules, but remove the much maligned MGU-H and introduce certain spec parts. While not the wholesale change some were expecting, the proposals have been met with positivity from prospective entrants. The current guard are less effusive, and have decried the plans as being expensive.
But while there is no doubt that the new designs will require an initial injection of budget and expense, in the long term the affordability in the suggestion pays out. It will open the field. Which, of course, runs counter to the competitive desires of the manufacturers already present in the sport.
So as the manufacturers dig in their heels, mainly out of the politically-motivated intention to delay and delay until the lead time becomes unworkable so the status quo remains, the majority of teams who rely on securing engine supply appear to universally approve of the changes.
We thus have an impasse between the factory teams and the independents.
We’ve been here before, of course. Back in the early 1980s the FISA FOCA war was waged between what were known as the garagistes (independent teams) and the grandees (factory outfits.) Back then it was about control of the sport and the garagistes, led by Max Mosley and Bernie Ecclestone, won out. The difference this time, however, is that there is no battle for control. This isn’t one side aligning with the FIA versus another siding with Liberty. Liberty and the FIA are aligned.
What this boils down to is influence and money. The major manufacturers, who have for so long now held a position of political power that by constitutional right they never had any legitimate claim on, are intent on holding onto an authority given to them via a broken political system which had been bent and buckled by money.
Of critical importance in this fight is the fact that Ferrari, the biggest name in world motorsport, has played its only real trump card and threatened to withdraw from Formula 1 should they deem the sport’s new direction to be in contradiction to their own desires.
Ferrari have issued this threat countless times before. They did so under Enzo, they did so under di Montezemolo and they are doing so again under Marchionne. It is their biggest and only real play. But is it real, or are they simply grandstanding?
It is key to understand that, for Ferrari, this is about far more than just engine regulations. Liberty has, since its very first days in charge of this sport, made it abundantly clear that the era of Ferrari’s special status and resultant payouts are over. For decades now, Ferrari has stood at the roulette wheel and played the highest stakes game. But such is their privileged position that they’ve never had to put a dime on the table. They’ve never had to actually gamble, instead simply taking from the house with every spin of the wheel. But the casino has new owners. And Ferrari’s line of credit is done. If they want to carry on playing, they’re going to have to start paying.
Ferrari talks a big game. But would it actually make good on its threats? After all, where else would it go and race? Formula E, perhaps. But victory in the electric championship is not going to add to or embolden the lustre of the brand. A full-on assault on WEC, then, with a proper LMP1 program? Well the problem with that suggestion is the budget. The top LMP1 teams operate on finances not that far removed from the top Formula 1 teams. But Ferrari has received such a tremendous payout from its participation in Formula 1 that it can run in the self-proclaimed pinnacle of global motorsport for the princely sum of nothing. It will not spend the hundreds of millions of dollars required to go and race LMP1. Even Ferrari can’t afford to do that.
And besides, Ferrari is a publically listed company. Marchionne can make as much noise as he wants. But at the end of the day the decision is not his to make. It falls to the board, and they will never vote to remove the biggest feather in the company’s hat.
Which leaves Ferrari’s threats feeling somewhat hollow. Ferrari is the team who cried wolf. Sympathy and any belief that they will follow through with their intimidation has long ago expired.
As we’ve already concluded, the difference between this fight and the FISA FOCA war of 30 years ago, is that in this battle only one side is going to win. And Ferrari is on the wrong side of history. Liberty cannot and will not lose.
If the sport is to prosper and grow then it is for the independents that the future regulations must be written. Budget caps, fair distribution of wealth, a platform that permits everyone to be competitive; these are the foundations upon which the sport will be based. As the FIA and Liberty seem to be making clear, there is a plan, there is a blueprint and if you want to be a part of it then jump on board and come along for the ride. If not, then so long and thanks for all the fish.
The same will be true for all the sport’s contracts. Be it racing circuits that want to get out of the deals they did with Ecclestone and pay less, or broadcasters who cannot live with the drive towards the opening of digital content, Liberty is positioning itself with its feet firmly cemented in place. For any sign of weakness now will have knock-on effects at all levels.
It’s why I doubt Silverstone will get a new or better deal. Any renegotiation will lead to every circuit attempting to break contract and do a new deal. It’s why certain broadcast contracts will end. It’s why Ferrari might be pushed all the way to having to make good on their threats. Because their bluff will be called.
Formula 1 has evolved at glacial speeds over recent decades. The shake-up that is coming is long past due, and the speed with which the changes will be brought will be a shock to many. But change is essential for this sport to prosper and compete in a real world, which itself is going through a seismic shift in the fundamental concept of how we receive and enjoy almost every aspect of our lives.
Liberty is in the process of getting its affairs in order. They have the keys to the candy store and they’ve done an inventory. In so doing they’ve discovered that some of the stock is out of date, the deals with some of the suppliers don’t make much business sense, there’s damp in a few of the walls, and some kids have been getting their candy for free.
After a year running this sport, Liberty has employed all the right people to research, report and formulate a direction for Formula 1 that will allow it to prosper both sportingly and financially. Their message now seems clear.
Things aren’t going to be like they were. Things are going to change. We run this sport, not you. We will make the rules, not you.
Get on board, or go. The choice is yours.