Should the FIA and the teams bail out of F1 together?

[Taxi645]

Should the FIA and the teams bail out of F1 together?



In an age where we will see an increased in self driving vehicles and a decline of petrol engines can the pinnacle of motorsport afford to be drained from resources, be poorly governed and be alienated from it's fan base? I think that question is not too hard to answer.

Most of the problems F1 is facing today are sourced from the way F1 is owned and government. It's simply can't afford to continue this way otherwise it will become extinct much earlier than it would due to natural evolution.

• Track fees?

• Traditional tracks under threat

• Race organizers being unable to fund races.

• Pay-per-view

• Small teams without finance or influence

• FIA with too little funds and influence

• Strategy group being completely ineffective

• A lack of understanding, vision or funding to properly address the issues with the technical regulations of the cars.

• No single problem being addressed at the root cause, because the root cause is blocked contracts or ineffective government structures.

All stem from the basic fact that the commercial side of things has been allowed to **** up F1 based on it's passed success. Bernie says that the technical rulebook is a house of cards that needs to be rewritten from the ground up when in fact it is F1 as whole that needs to be rewritten otherwise it will self accelerate it's own extinction as we slowly start leaving the petrol age. We can't afford to mess about any longer.


The solution?

So how to address this? The FIA and the teams should bail out of F1 together and set up a separate championship under a different name.

That way you get rid of the ineffective government structures, all the contracts and the ghosts in the closets that Bernie created. Reduce the commercial side to an entity co-owned by the FIA and the teams with the sole task of providing the FIA and teams with cash and maximizing the viewers and fan base. Set up a government structure that is effective with the FIA having majority influence and ALL teams have their say. Make sure the money gets distributed in a way that allows small teams a fighting chance for a victory, allow people to visit races for acceptable fees or let them watch on normal TV to increase the viewers and fan base to make it worthwhile for manufacturers and sponsors.

You keep this up for a few years, the F1 brand value will have crumbled, you buy it back for pennies and all is good again. Better yet, commit to this plan as FIA and the teams, threaten to walk away and reform F1 on the FIA's and the teams terms.

[Nicholosophy]

The FIA and FOM have a signed contract that gives FOM the rights to promote F1 for the next century or there abouts. I assume it is pretty water tight to stop the FIA from just taking it's bat and ball and going home.

[Taxi645]

Originally Posted by Nicholosophy

The FIA and FOM have a signed contract that gives FOM the rights to promote F1 for the next century or there abouts. I assume it is pretty water tight to stop the FIA from just taking it's bat and ball and going home.

I wonder what the terms are in that contract that prohibits them from organizing another championship?

[Nicholosophy]

Originally Posted by Taxi645

I wonder what the terms are in that contract that prohibits them from organizing another championship?

I imagine they can organise another championship but it can't be Formula 1. It's probably more around the titles of FIA World Drivers Champion.

[Mike Harte]

Taxi645, if only life in F1 world was that simple, but it's far from it.

A couple of very serious obstacles are that each team also has a contract with FOM, which they would be far more fearful of not fulfilling. This is one of the reasons that Force India and Sauber lodged their complaint with the EU commissioners.

Secondly, because of the unhealthy financial hold over the teams by the FIA and it's then commercial arm which was run by Mr Ecclestone, the EU commissioners came to a compromise deal with the FIA that no further action would be started provided that the FIA divest itself of any interest in the commercial side of F1. This happened in 2011, when FOM, and/or other entities associated with it such as Delta Topco, were granted to 100 years licence to the commercial rights of F1.

The EU rules prohibit the FIA being both the regulator and commercial manager, or having any pecuniary interest in the commercial side. This is one of the parts of the proposed sale of FOM to Liberty that is being investigated at the moment, because, unknown to the EU commissioners, FOM sold a 1% shareholding to the FIA for a nominal fee. As the FIA has to approve the sale of FOM, the FIA stand to make a profit of around $300 million, and this is deemed to be a conflict of interest.

[Taxi645]

Originally Posted by Mike Harte

Taxi645, if only life in F1 world was that simple, but it's far from it.

Yes, you're right. That said something must be done, because the way it is now F1 is like a sick cow that the farmer tries to keep milking in an environment that will keep becoming increasingly hostile.

Originally Posted by Mike Harte

A couple of very serious obstacles are that each team also has a contract with FOM, which they would be far more fearful of not fulfilling. This is one of the reasons that Force India and Sauber lodged their complaint with the EU commissioners.

Right, but most of those contracts end around 2020 do they not? That's about the right time to get an alternative championship in place.

Originally Posted by Mike Harte

Secondly, because of the unhealthy financial hold over the teams by the FIA and it's then commercial arm which was run by Mr Ecclestone, the EU commissioners came to a compromise deal with the FIA that no further action would be started provided that the FIA divest itself of any interest in the commercial side of F1. This happened in 2011, when FOM, and/or other entities associated with it such as Delta Topco, were granted to 100 years licence to the commercial rights of F1.

The EU rules prohibit the FIA being both the regulator and commercial manager, or having any pecuniary interest in the commercial side. This is one of the parts of the proposed sale of FOM to Liberty that is being investigated at the moment, because, unknown to the EU commissioners, FOM sold a 1% shareholding to the FIA for a nominal fee. As the FIA has to approve the sale of FOM, the FIA stand to make a profit of around $300 million, and this is deemed to be a conflict of interest.

In that case the FIA and teams should come to an arrangement where the teams own the commercial rights (and set up a new entity to manage it) but the arrangement with the FIA stipulates terms for a fair financial deal between the teams and the organizers with an acceptable fee for the FIA for overseeing the championship. This is only useful if in the agreement it is written that the commercial rights can't be sold to a third party otherwise it will be the same blood sucking tragedy it is now.

That way the FIA set's the rules (also financially) within they are willing to organise the championship and get a decent fee for it, while the teams own the commercial rights. That way you can avoid too much money being bled away from the sport.

I don't know if this is possible within EU law or in any case and yes I'm oversimplifying this, but I do think that the problem is urgent enough that continuing this way is not a viable option. Just saying it is complicated so we keep on going will end the sport prematurely.

[S griffin]

Of course it's not going to happen, so they should try working together to restructure F1 from inside

[Taxi645]

Originally Posted by S griffin

Of course it's not going to happen, so they should try working together to restructure F1 from inside

Why would the commercial right holders surrender their stake unless they are forced to do so? I think the FIA and the teams should look for ways to create leverage to stop resources from leaking out of the sport and to reorganise the sport on their terms.

[S griffin]

Originally Posted by Taxi645

Why would the commercial right holders surrender their stake unless they are forced to do so? I think the FIA and the teams should look for ways to create leverage to stop resources from leaking out of the sport and to reorganise the sport on their terms.

I meant the FIA and the teams should work together, but they need to make sure FOM with their vested interests have less influence, as you said

[Moneyseeker]

F1 will end up as FE or maybe F1e, all the big car makers see EV as the future. No new car makers will enter F1 (as it currently stands) look at the support FE is getting from major manufacturers for what is still a fledgling and developing championship.

FOM really wants city centre races close to fans and with the likelihood of city government support and close to business centres and sponsors which F1e would deliver. They will be short sharp races (which I suggest FOM also wants) and very fan friendly with easy to build activation and fan support.

In 25 years time, we won't see any races at 'circuits' miles from anywhere, Silverstone, etc will be housing.

All IMO of course!

[GT6]

Originally Posted by Moneyseeker

F1 will end up as FE or maybe F1e, all the big car makers see EV as the future. No new car makers will enter F1 (as it currently stands) look at the support FE is getting from major manufacturers for what is still a fledgling and developing championship.

FOM really wants city centre races close to fans and with the likelihood of city government support and close to business centres and sponsors which F1e would deliver. They will be short sharp races (which I suggest FOM also wants) and very fan friendly with easy to build activation and fan support.

In 25 years time, we won't see any races at 'circuits' miles from anywhere, Silverstone, etc will be housing.

All IMO of course!

Well not sure the fans will be that keen on electric racing, just because car manufacturers in the west see that as a solution to all their problems does not actually mean it will happen, certain kinds of people will love the green cause but motor racing fans are not really that way inclined and without fans no sport will last long