Why Ferrari is on the warpath against F1

What if Sergio Marchionne means business? What if he really is thinking of taking Ferrari out of Formula 1, given that in his opinion (but also that of Mercedes, Renault and perhaps Honda) neither Liberty Media nor the FIA understand that the end goal of racing at the highest level isn't just about making and selling a show, but is also about creating technology linked to the cars we drive every day?

We have to start taking this question seriously. It was in Bahrain that Liberty presented its manifesto for a post-2020 F1 to the teams behind closed doors, then outlined the bare bones of the proposals to the public via a press release.

Maranello's response was telling. There was no comment: the advice given by Marchionne to Maurizio Arrivabene and the other Ferrari directors was to avoid expressing even the slightest opinion - unlike Mercedes' Toto Wolff, who was diplomatic but non-committal, saying: "It's a good base for discussion."

That is not without meaning; consider it an opening gambit in which Wolff is leaving himself plenty of room for future manoeuvre. From Marchionne, by contrast, there hasn't been so much as a squeak. No hints, no observations, which is typical of the trend that began with Ferrari under his leadership of raising the shields like a Roman legion assuming the testudo (tortoise) formation instead of opening up, communicating, perhaps even smiling.

In reality, the Ferrari president is considering all the possible scenarios now that the plans are in the public domain, in outline if not in detail. And given that Marchionne is one of those high-profile players who always guesses the cards in his rivals' hands, he will have studied what move to make in the light of the options that will be on the table between now and June, when F1's rules for 2021 and beyond will be decided.

Is this a two-player game? Certainly. And one between similar cultures, too, because Marchionne learned his trade on the American continent. He is now taking on brains crafted by the same ideology, who share the same culture and, in the end, even the same goals.

Marchionne is considering all the possible scenarios now that the post-2020 plans are in the public domain

The difference is that Marchionne is really very Italian, with a degree in philosophy as well as degrees in economics and law, which makes him very sophisticated, subtle, and unpredictable whatever the negotiation he's involved in.

Withdraw - but to where?

Certainly when the word 'withdraw' began to proliferate a year ago, it was natural to think it was a pre-emptive tactic by Marchionne to gauge his opponent's reaction. Perhaps that is what it was.

Enzo Ferrari used the same term, 'withdraw', in F1's second year of life, 1951, when the rules were not to his liking. And he used it again, many times, even going so far as to build an Indycar chassis in the mid-1980s as he railed against the governing body's policy on aerodynamics and the growing commercial power bloc of the British teams organised by Bernie Ecclestone.

Was Enzo Ferrari really thinking of quitting Formula 1 to go and race in the USA? Probably not. More realistically he was tempted by a parallel adventure: the Gustav Brunner-designed 637 Indycar would have been run by Steve Horne's Truesports team, which won the 1986 Indianapolis 500 with Bobby Rahal. Ferrari invested a lot in the project, even creating a supercharged 2650cc V8 engine. And the car was duly tested at Fiorano by Michele Alboreto.

That was enough because it strengthened the threat. Ferrari didn't have long to wait for the result: after a few months, on March 17 1987, the first Concorde Agreement was signed, which fully satisfied the grand old man's expectations.

The revolutionary agreement between the teams, Ecclestone and the FIA signalled the 637's demise as a racing car, and it was placed in a corner where it sat gathering dust. Today it's on display at the Ferrari Gallery, a tribute in rosso corsa to Ferrari brinkmanship.

In the 1980s, what was then CART Indycar enjoyed a certain allure in Europe. Less so today, when the exploits over the Atlantic go mostly unreported, except when a driver from a particular nation suffers a devastating crash. It's now a one-make championship, with all the chassis built in Giampaolo Dallara's technological centre, and the engines are practically standardised too - all of which are characteristics that are light years away from every Maranello aim.

So where could Ferrari go if it was to slam the door in the face of F1? It's hard to see it the top class of the World Endurance Championship, whose fascination is limited to the Le Mans 24 Hours and otherwise doesn't enjoy popularity on the same level as grands prix. The other options are non-existent because the F1 of the Ecclestone era has destroyed all its rivals.

But before considering eventual and unlikely alternatives, Ferrari will do everything to turn the confrontation with Liberty Media to its own advantage, just as it did 32 years ago - both in terms of technology and economics.

All cars are equal, but some are more equal than others

Marchionne's threat to leave concerns F1's technical future. He won't accept a formula aimed at levelling the value of the engines, and with it the creative and technological contribution of the big carmakers. Ferrari is minuscule compared with Mercedes, Renault or Honda. But ever since the 1950s, when financing itself was truly a cause for angst, Ferrari has been responsible for its own innovations.

Enzo Ferrari was fastidious about the importance of the engine to the identity of his cars, which have been powered by internal combustion lumps in most shapes and sizes, blown and unblown, and punching with anything from two to 16 cylinders.

"Formula 1 must be free for expression, research and differentiation" Sergio Marchionne

It is a fundamental element of the brand and a Rubicon Marchionne will not cross, insisting: "Formula 1 must be free for expression, research and differentiation. To make cars that are all equal and engines that are simple and economical would mean following the path of NASCAR. Interfering with grands prix for commercial reasons is completely wrong. The noble side of F1 lies in the fact that it's a sport that's different to all the others and we can't commercialise it.

"An F1 that must take a different direction would no longer interest us and we would walk away. If they [Liberty Media] believe we're bluffing, they are playing with fire. In their position I would not risk seeing whether or not we are serious.

"I'm the first to admit F1's running costs are too high, but to put this right we can't take away Ferrari's DNA. Moreover, why is nothing being done straight away in favour of overtaking, which is what racing's all about and represents what the fans really want?"

Hard-hitting words, phrased unequivocally - very much in the character of the Maranello president. He is nonetheless continuing his dialogue with Chase Carey and with the chief of Liberty Global, John Malone, with whom he goes back a long way.

Carey has explained that the goal Ferrari should share is a budget cut, while notably increasing the revenue of the business. These are incentives for which Ferrari would be forced to give up about 40% of the €80million bonus bestowed on it by Ecclestone in his era.

But the money would still end up with Ferrari via a different route, together with the sum that would go to the engine manufacturers.

Ferrari could largely go along with this. Similarly it doesn't seem hard to find a solution to the veto over technical regulations that Ferrari has enjoyed since 2009. This was a privilege that was made formal - together with the famous bonus - when Luca di Montezemolo was threatening to organise an alternative championship and Ecclestone needed to bring Ferrari back into the fold.

In reality, this veto is today more of a philosophical concept than a serious benefit, since it has been 'reformed' (or rather 'scaled down') in recent years.

Liberty has explained to Marchionne that if a big team like his spends €400m for a season, while earning back a maximum of €300m, perhaps it would be better to consider a formula that reduces the spend to €200m, but with the prospect of winning back €400-500m in the mid-to-long term.

More to the point, F1 would finally become a business for the teams - all of them - therefore guaranteeing the survival of the small teams, which are permanently on the cusp of disappearing.

Ferrari accepts cost cutting principles, but doesn't believe in intervening on engines in the way Liberty proposes

Ferrari accepts the principle of cutting costs, but it doesn't believe that to achieve that you must intervene on engines in the way Liberty proposes.

Arrivabene and his engineers maintain that if you remove the MGU-H element, the power unit design cycle will have to begin again from scratch, with major economic investments that would frustrate the noble dream of spending less.

The show must go on - or must it?

So what can be done? Let's leave the engines as they are today, simplifying them wherever possible and standardising certain parts such as the batteries, where there is a deregulation that leads to an increase in costs.

There are many such areas of what's known as 'invisible technology' in which spending could be reduced. But according to Ferrari, Mercedes and Renault, the best route to this is by freezing development, as in the last V8 era.

What's more, if Liberty's budget cap proposals were to be given the go-ahead, Ferrari would be forced to leave part of its race team at home - and it has no intention of doing that.

If it's perhaps true that Ferrari doesn't break even on its F1 activities, we must remember that ever since the start it has raced to promote the brand, not to earn money. The second- and third-division teams, by contrast, are racing for profit.

There's nothing improper about that, but it's proof of how the aims of all F1's participants are very different.

So Ferrari will fight in the coming weeks, together with its allies, to make sure the current format isn't overhauled. Marchionne is open to any form of collaboration, but without conceding too much of the blueprint for an F1 that is slipping towards becoming a show at all costs, imitating American sports. He is aware of what Ferrari represents for F1 and of the incalculable damage that Liberty would sustain if his team was to pull out.

As Ecclestone says: "I have always considered Ferrari to be the most important part of the F1 business. The high fees I've taken from sponsors, organisers and TV companies were linked to the presence of Ferrari. And the biggest takings have filtered down to everyone.

"But without Ferrari that income wouldn't have existed and Formula 1 wouldn't have been the same."

In the business world you often hear it said that no one is indispensable. Liberty repeat the line that the core of its business is the fans.

Fine: but how would the millions of tifosi react to a championship without Ferrari, or without the company that created so many legends of this sport, along with an aura of myth? What would be the reaction of the TV stations around the world that pay millions for rights? And would the sponsors of the big circus be happy?

Marchionne knows that a championship without the red cars would be a championship devalued, and the small teams would feel the consequences.

F1 would immediately become something different; that's not to say the survivors couldn't give life to a spectacular and (perhaps) lucrative series of their own, but it would be something else, with no more of the universal appeal that grands prix have at the moment, without the interest of the big manufacturers and certainly with less interest from the public.

"If we replace the promoter and both we and the other teams invest, something could be done that is even more interesting" Sergio Marchionne

And let's not forget that, for years, young people have turned away from F1 because in the western world the social panorama has changed. European TV audiences are on the wane, along with investments from the sponsors, which now amount to just 30% of team budgets.

If Ferrari was to exit stage right, it would be a disaster for everyone, including Ferrari itself, which would have no other outlets that are so prestigious.

But Marchionne has already tried to go further: "We will try to think of something similar to F1. If we look at the economic debate, considering two thirds of the current income goes to the teams and one third to Liberty Media, there are resources out there that could be earned back. If we replace the promoter and both we and the other teams put in an investment of our own, something could be done that is even more interesting..."

We're back to the same old record. Arguments that have already been heard in the past, threats of expulsion, dreams of pastures fresh - with an endpoint that could be compromise over engines ("but making power units that cost less than €15m is impossible," booms Marchionne) and an adjustment on the financial side.

Everything else is a straightforward debate where everyone is in agreement: who wouldn't want more overtaking and a bigger influence of the driver over the car? Who can contest the fact that more money can be made on the 'social' side?

In other words, Ferrari could well walk away from F1, but it's not in the interest of Liberty to have it on the ropes - on the contrary, in fact.

If anything, if the confrontation were to get really fiery, the same Ferrari could try to force Liberty out of governing F1.

Those would be extreme measures, but they are not impossible: Marchionne is waiting to see what happens. Could we ever conceive of the Rolling Stones without Mick Jagger? The same holds true for F1 without Ferrari, whether we like it or not.

Pino Allievi is the F1 correspondent of La Gazzetta dello Sport