F1 Soap Box – The Gathering Concorde Storm

If you thought the last round of Concorde Agreement talks were wild and wooly, with a threatened breakaway series and posturing galore from FOTA, well aren’t you in for a treat in the coming months. Some strange forces are aligning as we hear more details about the supposed News Corp interest and with Ferrari sounding off about their displeasure with the current state of F1 and the future technical package.

The Timeframe and Players
The current Concorde Agreement expires at the end of this season, so this means the teams are starting to gear up for the negotiations. As was seen in the last round, FOTA will play a major role in the discussions, but there are two competing interests among the teams. FOTA wants what is best for all the teams and will attempt to keep a unified front in their negotiations with the FIA and CVC/FOM/Berrnie. But while Ferrari is part of FOTA, they deal from a position of strength in these negotiations and may take whatever deal is best for them, even if it throws FOTA under the bus.

It is an accepted fact that Ferrari is very important to F1. Acknowledging this fact, Bernie has made sweet deals in the past with Ferrari, knowing that if Ferrari falls in line, then all the other teams will have to do the same. But maybe this current round of negotiations will not see the same effect. One could argue that Ferrari has fallen on hard times over the past few seasons and the fact that they have been surpassed on the track by Red Bull and McLaren has to consistently be eating away at their fanbase.

As far as the other major player, the FIA is moving forward with their plans for a smaller engine in 2013.  This despite Ferrari and Bernie’s continued disapproval  of that plan.  Other members of FOTA like the new engine regs, so it will be interesting to see what part this plays in the Concorde negotiations.

Bernie’s Opening Play
Not sure what Bernie’s motivations were when he made the statement that the two primary things that get people interested in Formula 1 are Ferrari and the unique screaming engine noise. Clearly, Bernie is not happy with the future direction of the technical package with the 4 cylinder engines in 2013, but one would think it bad form to be trumpeting Ferrari’s prominent role among the teams, right before the Concorde negotiations get underway, unless his goal was to try and point out to FOTA that Ferrari isn’t going to act in their best interest.

Not Bad Old Man, But This is How its Done
But certainly the plot has thickened in the last couple weeks as talk that EXOR / News Corp is apparently in the early stages of forming a committee to explore whether they should gather a task force with the intent of possibly approaching investors to see if they are intrigued by the idea of buying control of the commercial rights to the sport from CVC, Bernie or the other US banks that own shares. They sound pretty certain of themselves, don’t they? But making this all the more interesting is that EXOR has strong ties with FIAT and Ferrari.

Ferrari has been making bold statements to the press the last few days about the future of F1. They have attacked the current technical package because it is so aero dependent. They have attacked the future technical package because the tiny four cylinder engines have no relevance to the products they put on the street. And they are attacking CVC/FOM because of their lack of promotion for the sport. When news of the EXOR interest hit the papers, Ferrari made the following statement.

“All we can do is repeat what has already been said so often in the past. Ferrari stresses the importance of ensuring the long term stability and development of Formula 1.”

Ferrari, Red Bull, McLaren and Mercedes will be meeting with News Corp next week to start discussions about their proposed buyout of the commercial rights. CVC holds the majority stake and has said that the commercial rights are currently not for sale, but the teams may be using News Corp to underscore their desire to see the commercial rights holder invest more money back into the promotion of the sport, not just use it as another investment on their books. If the teams make enough threats, maybe CVC will prefer to sell the rights instead of giving in to the demands made by the teams. Or, they could just give in to the teams and pump some of their money back into promotion.

What threat could the teams impose on CVC? Well, they could decide not to sign a new agreement. Ferrari has already signaled that they are not interested in continuing in F1 if some of their demands are not met. And now it appears that they are using their FIAT influence to make sure that their demands are heard. It’s a pretty blatant strong arm tactic, but you can’t call them the bad guys. I’m pretty certain they learned these negotiating techniques from Bernie and Max.

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