F1 is poised to repeat its 1980s war

Forget the 2009 breakaway threat posed by teams to the FIA and Formula One Management that ultimately precipitated the departure from office of the then-president of the governing body, Max Mosley.

That was kindergarten stuff in comparison with the Formula 1 war that broke out during the early eighties between the teams collectively (well, almost) and the governing body FISA, then the FIA's delegated sporting authority.

The FIASCO war, as it became anagrammatically known, almost ripped F1 apart as races were cancelled, others stripped of world championship status and events such as the 1982 San Marino GP contested by 14 (mainly turbocharged, manufacturer-entered) cars, of which just five were left running by the end.

Certain entrants at Imola, such as Tyrrell, were members of the Formula One Constructors' Association and raced in violation of a FOCA decree - later paying heavy prices for their scabbing - while the rest were so-called (by Ferrari, who sneeringly referred to the Brit pack as garagistes, on account of their 'Meccano' approach of bought-in engines and transmissions) grandees, or manufacturer teams.

The war was sparked in the late seventies when F1 tsar Bernie Ecclestone and eventual FIA president Mosley decided F1's commercial rights belonged to the teams, not FISA, and set about transforming FOCA from glorified travel agency to F1 trade union.

The 'breakaway' 1981 South African GP has been erased from the record books © LAT

FISA president Jean-Marie Balestre (Mosley's predecessor) garnered the grandees with threats of bans from all FISA motorsport. Battle lines were drawn: FISA/grandees, mainly running turbo engines on one hand; British teams such as Lotus, Brabham and Williams operating to classic recipes of their own (oft-sub-contracted) chassis, Cosworth DFV engine/Hewland transmission, Goodyear tyres and proprietary components on the other.

Circuits and sponsors were tugged in every direction, fines levied for the most ridiculous reasons, drivers refusing to attend briefings and, for a period, two parallel world championships were on the cards.

The 1981 South African Grand Prix, for example, was run as a Formula Libre (free regulations) event under the auspices of the Ecclestone/Mosley-concocted World Federation of Motorsport banner, with the former supplying old Avon rubber to the field.

Having taken the sport to the brink, Ecclestone and Mosley realised that any peace initiative required Ferrari on board, so they approached Enzo, head of the eponymous Italian Scuderia. In January 1981 the Maranello Agreement - so-called on account of being struck in the home of Ferrari - was completed after Old Man Ferrari declared himself to be aligned with FOCA's objectives.

However, he was concerned his team could be marginalised should FOCA decide on Brit-centric regulations, and insisted on a regulatory veto should the garagistes devise strategies that worked in their favour. Ferrari's right to reject regulations has been granted through three successive presidential eras and the FIA's ill-fated cession of F1's commercial rights, which have changed hands thrice, latterly to CVC Capital partners.

As an aside, once peace had broken out, Ecclestone, as Brabham team boss, was first to break ranks with the Cosworth users - he signed with BMW to use its four-inline turbo unit, with Nelson Piquet subsequently beating Ferrari and Renault's drivers to the 1983 world championship.

Ferrari feared being politically outnumbered by British teams in 1981 © LAT

This writer put the history of said veto, previously never publicly discussed, to current FIA president Jean Todt (Mosley disbanded FISA in 1993, with motorsport now a fully-fledged pillar of world motoring's governing body). Saliently Todt was Ferrari team boss from 1993 to 2006, and CEO thereafter, so is perfectly placed to comment.

"At the time I joined Ferrari in [1993] I tried to understand what was the story behind it, and the story was simple," he explained.

"Enzo Ferrari, the founder, said he felt very isolated in Maranello to all the British teams, so he needed a protection, because he was alone. You'll remember the time we are talking, it was [1981], Ferrari was the only full car manufacturer, engine, chassis. [ED: Renault and Alfa Romeo were also full 'works' teams at this point]

"And he was fighting private teams like Williams, Lotus, McLaren, which were all using the same engine, which if I remember was the Ford Cosworth. So he got that in his discussion, by implementing [the veto]."

Two months later the Maranello covenant mutated into the first Concorde Agreement (effective 1982-87), and peace broke out despite lingering hostilities flaring up, most notable at Imola in 1982. Ferrari's veto was incorporated in that first Concorde, and carried over through subsequent iterations to the end of 2012.

When Ecclestone cut his controversial bilateral agreements, initially with the Constructors' Championship Bonus teams and thereafter the rest of the grid, the veto was approved by all affected parties - including, crucially, the FIA - and extended.

Todt faced the media in Mexico, where he spoke about Ferrari's rules veto © LAT

"When we arrived [at the point of signing new deals] in 2013 - and it was the first time that as president of the FIA, I was facing the reconsideration of the veto right," said Todt.

"I must say I was very cautious; was I as president of the FIA prepared to give that and I was surprised because the holder of the commercial rights, Bernie, was in favour of Ferrari having the veto right, and all the teams were in favour of giving the veto right to Ferrari.

"I try to have everybody in the same direction, so of course I agreed to implement the veto right into the discussion of the renewal of the [agreements] to 2020. We simply changed the wording of it to make it more precise."

Given, though, that no Concorde Agreement currently exists - only what is known as the Concorde Implementation Agreement, a sort of heads of agreement - is the veto valid?

"It is valid," asserted Todt, who likens the veto to a loaded gun to be used only as a last resort. "Ferrari have the veto right upon certain considerations, as I've just mentioned. If there is something unclear in our release, we can debate, but I don't think we should get into losing time debating some unnecessary legal matters."

Therein lies the crux of the matter and reason for the history lesson above, for immediately after Austin the FIA issued the media release referred to by Todt above, in which the governing body for the first time openly acknowledged the existence of the veto.

The long and short of it was that Ferrari had invoked its veto to block engine cost caps to the detriment of independent teams, and Red Bull, should it fail to find an engine supplier after its acrimonious fall-out with Renault. It's said to be only the third time in almost five decades that it had exercised the right, most recently when the Scuderia in 2009 rejected the Mosley administration's plans to introduce budget regulations.

Ferrari and Red Bull took on the FIA as allies in 2009 © LAT

Asked whether the teams now regretted that they had extended the veto, Christian Horner admitted they did.

"At the time of the veto, it was felt that maybe it was safer for Ferrari to have the veto than not have, that it would actually protect the teams, but Ferrari is quite a bit different in make-up from what it was then, so the veto can work in both directions," said the Red Bull team principal.

History records, of course, that a little over a year ago Fiat CEO Sergio Marchionne ejected Ferrari president Luca di Montezemolo ahead of taking over the charismatic Italian's office and leading the Prancing Horse to the New York Stock Exchange, with an IPO listing occurring in the run-up to the United States Grand Prix.

Italo-Canadian Marchionne, known within the group as the Jumpered Assassin on account of his sartorial habit of wearing a blue zipped top and his ruthless business approach, has taken to attending Strategy Group and F1 Commission sessions on behalf of Ferrari despite his global duties as CEO of the Fiat Chrysler alliance.

It is said by sources - and substantiated by others - that the word 'veto' has been heard more often in one year than in the past 40, so clearly Horner has a point when he says Ferrari is now "a bit different".

Ferrari, with Mercedes, has rejected all attempts at introducing cost controls on engines - although the accepted going price is around €20million (£16m) for a two-car annual supply, horrified team bosses speak of offers of up to €34m (£30m) - ostensibly to protect their engine business models. According to Mercedes motorsport director Toto Wolff the F1 engine operation annually loses money.

If so, this is not reflected within the company's 2014 financial results, which show a turnover of £145m and cost of sales of £126m - both sets of figures admittedly including some R&D work undertaken for main company Daimler - with £38m of the cost of sales being salaries and benefits paid to 540 employees, who earned an average of £70,000 each for the year.

Ferrari's numbers are more difficult to analyse on account of Italian accounting systems and the fact that the engine division is buried within Scuderia Ferrari, which is buried within Ferrari SpA, but if it, too, loses money the only suggestion to be made is that both suppliers restructure their respective managements.

Ferrari and Mercedes are presenting a united front over the engine situation © XPB

What was evident during the FIA press conference in Mexico, though, was the love-in between the two companies, with each speaking warmly of the other. Indeed, they sang from the same hymn sheet, and it was clear that some form of agreement on engine prices exists between them. Indeed, the FIA's alternate engine proposal is clearly aimed at the monopoly imposed by F1's two primary engine suppliers.

However, this overlooks the bigger picture: with the two manufacturers clearly aligned - and Honda controlled by the veto (that word again) it granted partner McLaren, resulting in the Japanese not even having the power to decide on engine supply to Red Bull - it has become a matter of FIA/FOM versus the three main teams.

Each in turn enjoys the support of a motor manufacturer, so have virtually unlimited resource - paid for, in part by the independent teams. "Bernie and Jean are now aligned for the first time since Jean took power," said one particularly astute observer of paddock politics, "because they have a common enemy in the Mercedes/Ferrari monopoly."

A power struggle is developing, and it cannot be coincidental that Mercedes, which last year rejected customer cars, is now in favour of the concept - with independent team bosses fearing the imposition of DTM-type structures, whereby three (or four) manufacturers control F1, with sub-contracted teams being granted franchises to operate teams on behalf of their 'masters'.

Three manufacturers supply a 24-car field in the DTM © XPB

That is how DTM fields 24 cars provided by the three manufacturers (Mercedes, BMW and Audi), and it is said that, prior to the emission scandal that engulfed VW Group, the company intended entering F1 with Audi as partner to Red Bull Racing and Toro Rosso on that basis - Red Bull is an Audi sponsor in the DTM.

Indeed, exploratory meetings are said to have taken place between German executives about Audi joining the fray in August at an Italian island resort. Forget not that Stefano Domenicali, former Ferrari sporting boss, now holds a senior position at Audi, and has put various proposals to the VW/Audi board.

In the eighties the battle was over control of F1's commercial rights, with a rag-tag collection of independent team bosses taking on a FISA run by a bunch of amateur 'blazers'; the current struggle is over control of F1, with the might of the manufacturers taking on a vastly more sophisticated enemy, namely the combination of a professionally-run FIA and cleverly-structured FOM.

Ironically, though, the war chest of the manufacturer teams is fed annually to the tune of half a billion bucks thanks to an outrageously skewed financial structure that disproportionally rewards the likes of Ferrari, Mercedes, McLaren and Red Bull.

Possibly CVC has seen it coming, for the word in Mexico was that CVC has upped its loan taken against F1's future revenues to $5billion (£3.3bn) and is ready to cut and run.

Battle lines have been drawn - the question is when does a second FIASCO hit F1?