F1's flawed governance structure

If last Thursday's FIA World Motor Sport Council meeting - convened on the fringe of the governing body's Sport Conference in Munich - ended in abject failure for Formula 1's independent teams intent on forcing regulatory cost control, it marked a resounding victory for F1 and common sense by ultimately proving the utter folly of the sport's governance structure.

The WMSC meeting marked the first session in which the prevailing governance flow path had been correctly followed since the formation of F1's Strategy Group a year ago - ostensibly to streamline the decision-taking process.

However, motorsport's supreme body ratified just eight of 20-plus headline items escalated to it by the Formula 1 Commission, which in turn had been fed by the WMSC. Saliently, of the eight decisions taken, one was a total rescindment...

Briefly, the Strategy Group comprises Red Bull Racing, Mercedes, Ferrari and McLaren (constructors' champions), Williams (heritage) and Lotus (top placed 'other' team), all with one vote each; commercial rights holder Formula One Management (six votes); and the FIA (ditto), with proposals being carried by simple majority.

FOM CEO Bernie Ecclestone devised the Strategy Group concept after the previous structure of Sporting/Technical Working Groups to F1 Commission to WMSC proved unwieldy, with the Strategy Group intended to replace the TWG/SWG, in turn feeding a slimmer F1 Commission.

However, after howls of (justified) protest from disenfranchised teams, the FIA in October 2012 committed to a structure where sporting/technical committees consult to the Group, which in turn feeds a Commission on which all teams (plus sponsors, technical partners and promoters) are represented.

Decisions taken at that level - by a 70 per cent majority for longer-term changes; unanimity for immediate implementation - are escalated to the WMSC for ratification. Talk about unwieldy...

It is this return to a fully-fledged F1 Commission which provides crucial checks and balances, resulting in humiliating defeat for some of the Group's grander ideas, including bans on tyre blankets (rescinded after being myopically forced through in April), reductions in race-team staff, and overhaul of weekend schedules, including the scrapping of a Friday practice session, and postponing the other to the evening to save costs.

Christian Horner © LAT

"So we fly 1000+ personnel and 150 tons of kit to Australia, then sit out 90 minutes on a Friday to save money," said a bewildered team boss for one of the disenfranchised teams upon hearing of the suggestion.

Asked by this column during Austria's FIA press conference - the F1 Commission meeting had been held two days earlier - why various proposals bombed, Red Bull's Christian Horner explained that motions failed once the F1 Commission considered the full effects of proposals on the real world.

"Costs in Formula 1 are one element," said the man many dubbed 'Bernie Lite' after Ecclestone suggested he could be his ideal replacement, "[and] the show is another and I think that you have to be careful not to make decisions that affect the show.

"There were a lot of things that were tabled that, when put in front of promoters and other people that have a vested interest in the sport, they said, 'Well hang on a second.' You shorten Fridays and that damages the show, that damages the promoters' ability to sell tickets and put bums on seats.

"So, when you put a group in the room who all have vested interests, whether it's the commercial rights holder, the teams and the governing body, and you talk things through, then you realise well actually, while there is cost associated with it, by reducing it we'll create more harm than good.

"So, therefore, some decisions were made on Wednesday which I believe were in the best interests of the sport."

Consult broadcasters - as SG members should have done - and they were horrified by the proposal, for most pay-channels broadcast Friday highlight packages. Footage is collected during the two 90-minute sessions and edited/dubbed ready for evening broadcast.

Scrapping a session and delaying the other to 1800 (daylight permitting) would not only result in 50 per cent less footage, but zero editing time...

As an aside, one wonders why, given the broadcasters' estimated collective 45 per cent contribution to F1's annual revenues, they do not hold at least one seat on the Commission, made up of 26 members.

By implication, then, the Strategy Group had not thought through their concepts, begging questions about the SG's overall competence to devise long-term strategies. Indeed, during the last F1 Commission meeting Ecclestone is said to have questioned precisely that point.

Tyre blankets are another case in point. Consider their likely fate: sources say the ban was initially carried by a 10:8 vote by the Strategy Group despite all technical directors (and sole tyre supplier Pirelli, whose experts had not been consulted about the implications!) being against a proposal which would provide negligible cost saving, yet result in obsolescence of high-value items in all teams.

However, the 10-strong 'for' group had but five votes in the F1 Commission when the weightings of the FIA/FOM were eradicated by the Commission's single-voice procedure, while the 'against' faction numbered three.

Tyre blankets will still be used next year © LAT

Once the five disenfranchised teams (and Pirelli) added their voices to the 'antis', it was five plays nine; factor in various 'against' votes from promoters anxious that drivers would only reluctantly venture out on cold rubber, and it is easy to see how the motion was rescinded.

Blankets may well be banned in future, but as part of a switch to low-profile tyres after 2016, when Pirelli's current contract expires.

Such mathematics had clearly not been fully considered by the Strategy Group's architects when they agreed a return to the full-fat Commission. It is now, of course, too late for change, for matters are enshrined in the Concorde Implementation Agreement - the 'heads-of-agreement' document signed in July 2013 between FIA/FOM, whose contents govern the sport through to end-2020.

True, the CIA needs to be transformed into a fully-fledged, tripartite Concorde Agreement signed by all teams in addition to the other two parties, but on the one side the FIA has received financial commitments from FOM - thus having no reason to renegotiate - while on the other the independents are unlikely to agree to further dilution of their franchise. In fact, they may challenge the legality of any revisions in EU courts.

However, numerous examples of just what the Group is capable of abound, starting with double points for the season finale. This decision slid through during the confused early days immediately after switch-over from the 'goodwill' governance procedure which existed between the expiration of the 2010-12 Concorde and the inauguration of the Strategy Group in October and subsequent WMSC meeting in December.

Forced through 'unanimously' as required by the governance procedure, the contentious points bonus could not be undone without unanimity - which was impossible to reach on account of the sort of vested interests referred to by Horner. In this case FOM jibbed, hell-bent as it is on a bumper finale in Abu Dhabi's desert.

The major problem is not, though, matters which eventually reach the WMSC - for the entire F1 Commission is able to vote for them - but those that don't make the Commission, having previously been bombed by the Strategy Group. In such instances the disenfranchised teams are effectively powerless, not having a voice to vote or provide input.

Despite the FIA in January (and previously) committing to cost control by regulation, the teams and FOM used their combined votes to ensure the matter did not reach the Commission - instead substituting a number of token proposals which may save individual teams $5m (£3m) a year, assuming they are on maximum spend in those areas. It was these the FIA's usually sombre president Jean Todt recently termed "a joke".

One wonders thus how many meaningful proposals slipped through Strategy Group cracks simply because they don't suit the 'Big Six', for agendas and minutes are no longer circulated to 'unwashed' teams for fear that secrets will, horror of horrors, be shared with Joe Public via the media.

Strange, given the vastly different agendas of the sextet, that the Group believes leaks could only come from those without, not those within...

Still, after the fortnight just past it's gratifying to reflect on a structure that at least offers a 50 per cent success rate rather than one which seemed in dire danger of scrapping all Friday sessions and quadrupling points for the last three grands prix of the season.

Who knows, they may even have voted for titanium 'spark' blocks and generated vortex trails next...