In a follow up to my previous post about the FIA and FOTA failing to reach an agreement over the proposed 2010 regulations that will see a voluntary £40m budget cap introduced, I thought I would take a moment to try and decipher Ferrari’s angle on this affair. Without doubt Ferrari are to Formula One what Manchester United are to the Premier League – Ferrari are a big organisation that command a huge following and generate a lot of money and put a lot of bums on seats. But there is more to them than you think…
Ferrari is also a car company that produce luxury sports cars. Of note, they are quite the exception to the general automobile industry at the moment as it was recently reported that profits at Maranello are only very slightly down on the same period twelve months ago. Where the entire industry is panicking and closing down factories, Ferrari are actually still making a fair amount of money.
But this aside, Ferrari are also an older company and have competed in every year that Formula One has existed. From the first season in 1950 right through to the most recent race, Ferrari have been there, mostly in their famous Rosso Corso colour. There were one or two races when the team changed to blue, but that is because of another dispute many years ago.
So one could argue that because of their ability to generate money, their history and most importantly because of their own desire, Ferrari should remain in Formula One. The two are very closely associated, and although Ferrari has in the past and could in the future participate in a different form of motor sport, Formula One will still likely be considered the pinnacle, and therefore attractive to the top brands.
There is another reason why Ferrari may want to remain in the sport as well. You see, while Stefano Domenicali* was at Heathrow earlier today discussing the budget cap matter with FIA president Max Mosley, Ferrari lawyers were applying for an injunction in the French courts to stop the FIA from pushing through its new rule. The reason for it happening in the French courts is because the FIA are based in Paris. The reason for Ferrari starting this process is even more interesting.
It was stated recently by Bernie Ecclestone that Ferrari do get special treatment in the sport. It turns out that should Ferrari win the constructors title, they get an extra £80m on top of what other teams would get should they win the title. This preferential treatment didn’t cause the stir among the other teams that would normally have been expected, indicating that it is common knowledge inside Formula One.
And now it has become apparent that Ferrari also have the right to veto any future technical regulations. In other words, they have to okay them before they happen. As Ferrari are seeking an injunction, one can presume Ferrari believe this process was not followed by the FIA when they announced the introduction of the budget cap plan. Joe Saward of Grandprix.com has mentioned this agreement regarding the vetoing of rules on his personal Formula One blog, and as it is new to me, I thought I would share a little with you.
The legal argument is apparently based on an agreement that was made in January 2005 between Ferrari, the FIA and Formula One Management.
The details of this agreement have never been made public but it seems that it included not only a substantial payment each year to Ferrari, but also a veto on the technical regulations in the future. According to our sources, the document even stated that if the new agreement was not validated by all the other teams, the old Concorde Agreement would prevail. Joe Saward.
Joe goes on to say that during the course of the meeting, Max Mosley was willing to raise the budget cap and introduce a “a glide path”, which presumably means a sliding scale whereby the cap would decrease by a set amount each year. However, the meeting apparently didn’t get much further than this as Ferrari and Toyota brought up the legality of the introduction of the rule and refused to back down on this point. They wanted the 2010 regulations cancelled in their entirety.
We can therefore presume that Ferrari believe they have a strong case; an organisation like Ferrari wouldn’t just go to the courts on a whim. However, the fact that Ferrari have this power in the first place is interesting enough. Despite all the possible points one could discuss right now (feel free to in the comments), this does show that Ferrari do want to stay in Formula One. A team wouldn’t bother wasting money on seeking an injunction and enduring the possible embarrassment if it wasn’t granted if they wanted to leave.
Max Mosely believes the same as well, stating as much to Autosport after the meeting. However, Max also believes that Ferrari won’t go through with their threat of leaving the sport and expects them to lodge an entry, either before the deadline or after. From what I can work out from all the quotes and new insights into Ferrari’s position in the sport, it would seem quite the opposite. Yes, Ferrari do want to stay. But if it cannot be done on their terms, then they will leave.
Needless to say, Formula One just got a whole lot more intriguing. Politically, anyway.
*As a footnote to this post, it should be noted that Ferrari Team Principal Stefano Domenicali was representing the team today instead of FOTA and Ferrari President Luca di Montezemolo. Although Luca was meant to be present, his father passed away yesterday. I would like to extend my condolences to the Cordero di Montezemolo family at this sad time.