Column Marc Limacher: Teams attempt to reduce the power of the FOM and Bernie Ecclestone

Tue, 7 October 2014, 10:02

For several weeks, the teams speech on the future of Formula 1 are a new destiny: Prevent Bernie Ecclestone to continue his adventure, reducing its power.

When Toto Wolff, leader on this issue, indicates the need to reduce the price of tickets for the Grand Prix. The boss of Mercedes AMG F1 pushes the door open. The statement came during the German Grand Prix on the Hockenheimring, partly funded by the German manufacturer. Wolff made a media announcement effect of giving evidence, to obtain the support of fans. Fans who must be the basis of the new paradigm of Formula 1.

In response Bernie Ecclestone, Singapore, has not been kind to Toto Wolff. In an interview with Autosport, Ecclestone replied clearly demand Wolff: “The problem is that we collect money for the teams. “The equation is as follows: The teams are in financial trouble, they ask for more monies to FOM, but this requires high taxes circuits and thus ticket prices for fans.

This is the symbol of what is happening right now. Currently over 50% of the money from FOM make up 70% of the budget of the teams. The teams have rejected proposals for cost reductions (ARR ceiling budget etc …) and are happy to benefit from the growth of about 8% per year in Formula 1.

The legacy of the FOTA still active

FOTA, sleep in Geneva since the beginning of the year, is still alive in people’s minds. The aim is to provide an independent Formula 1 without FIA and FOM without. The creation of the Strategic Group F1 is the first lever weakening of the FIA. Ads a new strategy on social networks, ticket prices and the third car designed especially Bernie Ecclestone and FOM. Toto Wolff tries to convince Ecclestone that social networks are the future of broadcasting Formula 1 Mister E was just wondering how he could make so much money with social networks today.

At the signing of the current Concorde Agreement, a clause was added by Mister E. A legacy of his idea of a support fund of € 50 million for small teams. This clause requires large teams to solve the problems of small. In response manufacturers have provided technology for small teams. But by releasing financial margins. The Ecclestone vision is the need for the big teams help small offering of technology at the right price.

It is in this context that the idea of the third car was proposed. As teams remain static at the situation and criticize the measure would cost between 25 and 32 million extra. In response to this proposed Ecclestone, Vijay Mallya demand more money from FOM to roll a third car. The owner of Force India becomes a spokesperson for the top teams, against the proposal. Ecclestone would aim rumored return of Cosworth, along the lines of what had made Max Mosley in 2009, with its concept of cheaper customer engine and had reduced by 50% the price of the engine manufacturers to time.

Faced with the state of emergency on CVC Capital Partners said it planned an IPO still in Singapore in the coming months. The aim of this announcement, mainly to teams and calm things down. Besides the power to Bernie Ecclestone has been revised. Previously he had to refer his projects at the four annual meetings with CVC Capital before their applications. Today it is no longer the case. Ecclestone is and then inform the board.

If Bernie Ecclestone wants to impose his new order, teams, especially Mercedes AMG F1 want to weaken the power of the treasurer of Formula 1, acting and media-using fans as a political lever. Unlike the past, it is not certain that the compromise is the answer. The situation dictates more.

Marc Limacher, BusinessBookGP editor

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