Inside F1's latest tyre war

Think Formula 1's last tyre war was fought in 2006, when Bridgestone and Michelin went head-to-head?

Think again. As this is written, a war every bit as ferocious as the on-track battle is ramping up, as incumbent Pirelli and Michelin look to persuade the major players of their bona fides, and that their respective approaches will prove to be of greatest benefit to F1.

The FIA has refined procedures since Pirelli was awarded the current contract. The Italian firm had already struck a long-term marketing agreement with Formula One Management, and the knowledge that Pirelli logos would be plastered across all circuits would surely have been in competitors' minds would considering the F1 tender.

Expressions of interest are now called for 18 months before the contract ends; thereafter the governing body approves candidates on safety/technical/sporting criteria.

A shortlist is sent to FOM for commercial discussions purposes, with the rights holder advising the FIA of its preference after what will surely be lengthy negotiations, and the FIA World Motor Sport Council then ratifies the successful candidate after vetting contracts.

The FIA received only two applications - Pirelli and Michelin - both of which obviously received Stage 1 approval, with an announcement of the final choice expected following the WMSC's September 30 meeting, failing which the decision could fall via fax vote or after December's world council session.

In F1's last on-track tyre war, Bridgestone won four titles to Michelin's two © LAT

As is the case with any real-life struggle, there exist both striking similarities and fundamental differences between the warring factions. The conflict is, as always, over rights and territory, in this case the 'right' to solely supply tyres to all entrants contesting the FIA Formula 1 World Championship, 'the property', for 2017-19.

That this period is out of kilter with the validity of FOM's bilateral agreements with teams and the originally agreed engine stability window (both end after 2020) seems to have been taken into account. And thus it could eventuate that a new supplier coming in from 2020 could be called upon to produce tyres to a certain specification for a single season only, then revise its products to suit '20-onward regulations.

Better, surely, to have stipulated a four-year window for this tender to enable synchronisation between commercial deals and Formula 1's tyre, chassis and engine regulations. But that is seemingly too logical an attitude for an extremely rare entity - a global business that thrives on obfuscation and confusion...

For a precedent, look nor further than swingeing changes to the engine regulations in which F1 switched from antiquated, naturally-aspirated V8s to high-tech, V6 hybrid turbos, with commensurate changes to chassis. The power units were introduced for 2014, a year after the expiration of the outgoing Concorde Agreement, which regulated (note tense) F1's commercial, sporting and technical covenants and the controversial bilateral agreements.

Any wonder that F1 effectively hung in technical and sporting limbo during 2013, and could again do so from a tyre perspective in 2020? Is it not ironic that a sport as steeped in history as is F1 - 65 years old and counting - simply refuses to learn from its past?

With its 2010 return, Pirelli helped avert a Formula 1 crisis © LAT

Pirelli has the advantage of being sitting supplier, having played F1's politics superbly during both tenures by keeping the commercial rights holder and teams (essentially) sweet. Sure, the last-named collectively jibs about coughing up a million quid each for a year's supply of rubber, but teams are only too aware that in 2010 F1 came perilously close to being tyre-less after Bridgestone withdrew, giving a year's notice. Pirelli saved the situation.

F1's financial revenue distribution structure is such that the tyre bills of major teams are effectively covered by their respective shares of Pirelli's 'bridge and board' signage, race title sponsorship and hospitality spends, which amount to an estimated £30million per annum. Thus the majors are powerful allies, and, of course, hold sway at Strategy Group level and with FOM CEO Bernie Ecclestone.

The Italian company - potentially, though, coming under Chinese majority ownership after a recent share sale - has a strategy to serve, supplying whatever its 'customers' demand, within safety parameters, of course. Thus, should teams demand hard compounds capable of lasting all season, Pirelli strives to deliver. Equally, if calls are for 10 stops per race, again it does its utmost. Red sidewalls? No issue.

Contrast that with Michelin's non-negotiable stance, recently underscored by its motorsport director Pascal Couasnon's statement that Michelin would not be interested in F1 if it would have to supply the present (antiquated) 13-inch wheel rim dimensions.

True, Michelin has dropped its previous insistence that F1 tyre supply be an open competition, but any demands made by what is a supplier - a crucial one, yes, but still a supplier in the greater scheme of things - do not generally sit well with F1's controllers. That said, Michelin can afford to state its terms.

Ranked the world's second largest tyre producer after Bridgestone, with annual revenues of £20billion, it has four times the financial firepower of Pirelli, and can thus comfortably outspend the present supplier if it so wishes.

Thus it could offer FOM double the going rate, provide gratis tyres, possibly contribute to team budgets, cover the costs of test sessions and support any number of FIA safety initiatives. If F1 accepts its demands.

Michelin's last stint was influenced by the presence of manufacturer partners © LAT

However, the difference to Michelin's previous campaign between 2001-06, though, is that the company came into F1 not so much to prove its technology - as had been the case during its maiden 1977 entry, when Michelin introduced radial ply technology to a sport then still racing on archaic cross plies - but in support of its major Original Equipment Manufacturer clients (car companies), many of whom were then entering F1.

Recall that at the time Toyota, with which Michelin enjoyed a strong and successful World Rally Championship partnership, announced its entry into F1, with Renault, Jaguar (Ford) and BMW soon following suit. True, Michelin introduced its OCP contact patch/suspension geometry at the time - a key factor in Renault's 2005 and '06 titles, after some near misses with Williams - but the primary reasons for entry were competition and commercial, as costs were defrayed by OEM sales.

Indeed, it is said Michelin OEM sales increased dramatically by dint of the partnerships it struck with manufacturers, while Bridgestone concentrated almost entirely on Ferrari, with one or two subservient independents getting a look in if they agreed to tyre testing on demand.

However, Michelin was badly burnt by the 2005 United States Grand Prix fiasco. It chronically underestimated the lateral forces generated on the Indianapolis circuit's banked speedway corners, which resulted in a new low in relations after race with just six starters, and this factor, combined with a creative interpretation of measuring surface width in 2003, incurred the political wrath of the governing body.

When the FIA announced in 2006 that from '08 F1 would have a single tyre supplier, Michelin saw a Japanese name writ large on the walls in Paris and announced its withdrawal.

Since then, though, F1's commercial landscape has changed completely. Just one mainstream carmaker remains, Mercedes, and its AMG performance division is linked predominantly to Pirelli. Michelin has hitched its star to the World Endurance Championship, where it serves four major manufacturers (Porsche, Audi, Toyota and Nissan), plus a pile of brands contesting lower classes. But, F1 remains the big one.

Pirelli's willingness to experiment included testing 18-inch tyres with Lotus in '14 © LAT

Pirelli's head of motorsport Paul Hembery does not deny suggestions that his company's full season F1 tyre budget runs to around £80million - including research, development, manufacturing, logistics, marketing and hospitality, but excluding activation. Put Michelin's vastly superior financial firepower to Hembrey, and he shrugs before stating flatly, "We hope to stay in Formula 1, but not at any cost..."

Speaking in Hungary, Christian Horner, whose Red Bull Racing team won its four consecutive titles on Pirelli, believes the decision should not simply come down to whoever throws the most budget at FOM - which raised a few eyebrows given his documented closeness to Ecclestone

"I think it does go a bit beyond that," he said. "An 18-inch rim and one-stop [tyre] is going to do nothing for the spectacle of a grand prix, and I think, actually, we need to look at doing the opposite. Getting two- to three-stop races, controlled degradation, maybe more choice for teams in terms of tyres they can [use in] grands prix."

Pirelli is clearly the team's choice, in other words. And forget not that Horner sits on F1's influential Strategy Group.

Therein lies the essence of the battle between two competing companies. The FIA's remit is to ensure F1's sporting and technical health, with FOM likely to select the highest bidder on behalf of its investment fund owners. Michelin knows only too well that their objectives are not mutually exclusive, while being compatible with its stated philosophy, and has the money. Pirelli surely has a fight on its hands to stay in F1.

Clearly the next three years will define Formula 1, and as such its authorities face massive decisions. First, though, they need to decide whether F1 is a sport, a technical exercise or an entertainment enterprise raking in hundreds of millions for its commercial owners.

Only then will they make the correct choice.