F1 – Peace Deal Brokered

doveYesterday, Max Mosley sent out a letter describing in detail why he felt it was in the FIA’s best interest that he stand for re-election when his 4th term as FIA president ends in the fall. This despite his spankgate pledge to stand down from his position when his term expired.

However, it looks like Mosley has again reconsidered. According to Autosport’s sources, Mosley, Luca Di Montezemelo and Bernie Ecclestone last night had meetings which have resulted in a deal.

At this point, it sounds like the following has been agreed upon:

1. Max Mosley will not stand for another term.
2. A new Concorde agreement will be signed lasting until 2012.
3. The FOTA breakaway series will be called off.
4. A reduction in costs has been agreed. From Mosley’s comments it sounds like they will phase in a budget cap over the next two years.

Mosley said,

“There will be no split. We have agreed to a reduction of costs. There will be one F1 championship but the objective is to get back to the spending levels of the early 1990s within two years.”

Clearly a split in the top tier of motorsport would have been devastating. The legal implications alone would have been astronomical. Starting a new series would have required massive investment and time was not in FOTA’s favor.

On the other hand though, FOTA had all the power in these negotiations. F1 without Ferrari could not exist. Even beyond that, F1 suing Ferrari would have been a PR nightmare that would have only further tarnished F1’s dwindling image. Beyond the Maranello outfit, the possibility of eight teams not returning to the championship next year would have destroyed F1, the FIA and the FOM conglomeration. The commercial viability of the sport would have disappeared overnight.

We can only surmise that this has been the same deal that the teams have had on the table for a few weeks now, but the FIA was unwilling to agree to terms. Also, we will have to wait and see if any details come out regarding this “new” Concorde agreement. This may have been the first time that Bernie has been willing to come to the table as well.

In the end though, it looks like the teams have achieved the goals that they were hoping for. A new Concorde agreement that fully details the governance of the sport, a new FIA president who doesn’t continue to bring the sport into disrepute, and a phased in budget cap.

Clearly, Max Mosley’s governance of the sport since the universal Concorde agreement expired was a major sticking point with the teams. Max has made increasing attempts over the last few days to demonize FOTA and make a case for why he should keep his job. This only lead many in the media to assume that the teams were making their inclusion in the 2010 FIA F1 championship conditional on his removal from office.

Maybe FOTA felt this was a fair turn for Mosley because it was also widely regarded in the media that Ron Dennis was pushed out of any involvement in F1 under similar duress from the FIA, taking the spear for his team who was under threat for exclusion from the championship.

We will keep you updated on this story as it unfolds. The World Motorsport Council is meeting at this time and we should hear more about this deal after the meeting is over. Further, FOTA has a meeting scheduled for tomorrow, which should add some good Flavio quotes.

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