Formula 1's cost-cutting conundrum

Just as fuel has become the new on-track battleground, so cost control continues to dominate Formula 1's political landscape, with seemingly no end in sight for this contentious topic.

Indeed, an issue that should by rights have been dispensed with in 2009 when the 2010-'12 Concorde Agreement was embraced by F1's three player groups - governing body the FIA, commercial rights holder Formula One Management and the teams' collective acting under the FOTA umbrella - continues to rumble along whenever two or more team bosses meet.

The 2010-'12 covenant made acceptance of prescribed cost control a condition of entering the Formula 1 World Championship, while no such agreement currently exists.

It can be no coincidence that in Spain the FIA invited delegates from Caterham, Force India, Marussia, Sauber and Scuderia Toro Rosso to attend the Friday press conference, for the quintet constitutes the "disenfranchised" group - receiving neither bonus payments nor sitting on F1's select Strategy Group.

While the invitee list for Monaco has yet to be published, it seems a racing cert that the favoured sextet will this Thursday (note) face the media, with the list due to be published today, Tuesday.

Four of the five were in unequivocal in their demands for cost caps as agreed by all teams in January - since rescinded by the Strategy Group - going as far as suggesting that the make-up and structure of the Strategy Group could run counter to EU Commission provisions, as first exclusively disclosed here 18 months ago, then repeated here.

The last-named team, namely Toro Rosso, is, of course, an anomaly, for Red Bull's feeder outfit invariably walks the furrow ploughed by big sister Red Bull Racing regardless of its own circumstances, although, to be fair, team boss Franz Tost has occasionally voiced opinions that run counter to the official line.

That said, although the Austrian professes to being against budget caps solely on (lack of) control grounds, the fact that both STR and RBR are pushing for the FIA to regulate F1's cost base through sporting and technical provisions rather than blanket limits, points to both teams singing off hymn sheets printed at the drinks company's futuristic HQ in Fuschl Am See, Austria.

Todt was not impressed with the teams' ideas © LAT

The 'Independent Four', though, wrote FIA president Jean Todt an unambiguous letter, calling on the governing body to uphold an unanimous January 23, 2014 decision to present "cost reduction and cost-control regulations to the WMSC in June 2014 for introduction in January 2015" - as ratified by the FIA's World Motorsport Council during its extraordinary meeting in Geneva.

However, the 'Big Six', having (unconstitutionally?) voted to overturn the agreed cap, proposed an F1 Improvement Plan as first disclosed here and subsequently expanded upon it.

The plan includes various spectacular measures such as low-profile rubber, active suspension and skid plates to create sparks - yet was subsequently branded "a joke" by Todt on the basis that it fell far short of targeted cuts.

Following receipt of the letter in mid-April, Todt tasked the independents with framing proposals to introduce affordable but, crucially, controllable cost caps. Force India's Bob Fernley drafted the document, with input from the other three. The plan was presented to Todt shortly before the Spanish Grand Prix, with all teams receiving copies.

Ultimately the FIA is fighting a good fight, with the Frenchman well aware that escalating costs could destroy what is, after all, the FIA's championship, but he is hamstrung by four teams (Red Bull Racing, Ferrari, McLaren and Mercedes) being hell-bent on spending whatever to beat each other, with FOM egging them on in the interests of staging a tour de force.

The Frenchman is totally averse to the sort of headcounts bankrolled by the 'Big Four' - Mercedes executive director Toto Wolff recently admitted to an AUTOSPORT colleague that the team employed 800 staff at its Brackley HQ and a further 400 in its Brixworth engine division, while Ferrari's incoming F1 chief Marco Mattiacci recently spoke of "800 people in Maranello" - and is targeting reductions of up to 60 per cent, i.e. 400 maximum per team.

After all, 1200 folk to operate two race cars (and supply six customer cars with "frozen" engines) on 19 Sundays per year is surely someway beyond excessive.

That said, there appears to be a softening in attitude on the parts of Red Bull and Mercedes after both McLaren and Ferrari devised plans to ramp up their respective spends in pursuit of glory.

Already McLaren has embarked on a high-profile recruitment spree, snaring design wizz Peter Prodromou and (so it believed) the gifted aero man Dan Fallows from Red Bull, although the latter is now the subject of litigation after electing to stay put.

Fiat-backed Ferrari is said to be showing an (expensive) interest in Red Bull's Chief Technical Officer Adrian Newey, who needs a title-winning red car on a CV to complete a full-house of illustrious designs for Williams and McLaren.

So worried is Red Bull team boss Christian Horner about potential defections that he is said to have proposed a personnel register to prevent poaching.

If true, the Briton surely should know better, for not only would such an arrangement run counter to EU (and international) laws, but he used Red Bull's open cheque book to recruit many of the top engineers currently employed in Milton Keynes.

They weren't, after all, on Jaguar Racing's payroll when the drinks company bought the team ahead of restructuring/branding...

Christian Horner © LAT

Whatever, F1 continues to find itself between a rock and hard place: on the one hand the Big Six (and FOM) voted for a return to F1's demonstrably unsustainable old ways; on the other, the Disenfranchised Four are pushing a sympathetic FIA for budgetary control. STR? Out on its customary limb...

Also hanging in semi-limbo are Williams and Lotus, for despite sitting on the Strategy Group (first-named by right on a heritage basis; the other by invitation through recent results), neither has the monetary muscle to take on their immediate peers although a resurgent Williams has made a good fist of it of late. Ideally both would like to see some form of control introduced, but find themselves out-voted (and -manoeuvred?) at SG level.

In order to break the deadlock, Todt directed the FIA's de facto Head of F1 Charlie Whiting to chair a meeting, held last Thursday at the Heathrow Sofitel Hotel, and attended by all teams - with some being represented by multiple delegates.

The result after six hours, including a sumptuous lunch? Absolutely nothing, zilch - as evidenced by the fact that not a word was subsequently said publicly about the meeting, for F1 is exceedingly good at shouting positive news. In fact, folk on either side of the divide criticised the meeting, with one gentleman decrying it as a 'total waste of time and energy'.

F1's problem is that it is running out of time - fast. Its ad hoc governance structure calls for the Strategy Group - whose status is in some circles believed to be unconstitutional - to frame regulations, which are in turn escalated to the Formula 1 Commission.

This is required to pass (by a 70 per cent majority) incoming regulations by June 30, subsequent to which unanimity is required. Such decisions are then escalated to the WMSC for ratification, whereafter they are adopted.

But, nothing in F1 ever is that simple. The concept of cost control (but not specific regulations) was ratified by the WMSC on January 23 in Geneva, and should thus pass into law on July 1, effective January 1, 2015.

However, the SG thereafter voted against what had been agreed by a margin of 12 to six, with the FIA using its six votes in dissent and the six teams and FOM's six votes making up the majority.

However, and herein lies the rub: no F1 Commission meeting has as yet been called. Should one be called before the end of June and the SG's motion was carried, that would in turn need to be ratified by the WMSC before the same date.

The WMSC has, though, the right to reject any proposal at the sole discretion of the majority (made up of FIA appointees). Thus, ultimately, the fate of cost control depends up on the will of the President and his circle of lieutenants.

Assuming, though, the WMSC does elect to enshrine cost control in next year's regulations, as things stand now it would have no specifics to incorporate in the 2015 sporting and technical regulations, meaning yet another F1 Commission/WMSC vote in future. Would that ballot be classed as a new procedure, requiring unanimous agreement, or an extension of the January 23 vote?

What happens next? Thursday's FIA press conference should have the Big Six reveal their hands amid questions of whether the Strategy Group has the authority to overturn what was agreed at WMSC level and whether any activities run counter to EU laws as suggested in Barcelona.

Equally, the independents are likely to face increased questioning about their positions, and, more specifically, the proposal made to Todt.

The off-track battles in the Principality promise to be every bit as tense as the race on its streets, fuelled in the former case by looming deadlines and opaque governance.