What politics are in store for F1 2011

Strange how history is set to repeat itself 30 years after Formula 1 signed its first Concorde Agreement on the evening of 19 January 1981. Although the document - which at that stage was a bipartite agreement since the commercial rights had not yet been hived off to a separate entity - was agreed, acrimony still rumbled on for another two years.

In 1981 the season-opening race at Kyalami was canned as a world championship round (although for reasons of politicking rather than civil strife). A drivers' strike over regulations followed the next year, while in 1983 the championship-winning driver was propelled by a four-cylinder inline turbocharged engine based on production technology.

The then-head honcho in the corridors of power in Paris was French and his teams' counterpart oh-so British, with the fight being over money and sporting control. As a sideshow, teams and the powers-that-were argued over prevailing regulations, more specifically downforce and ground effects.

Fast forward three score years and Bahrain is as good as canned, the current crop of drivers has not ruled out industrial action over potential safety issues, and the technical regulations (as they exist) have it that the 2013 world champion will be powered by an inline, turbocharged four-pot power unit under rules framed specifically to embrace road car relevance.

Meanwhile the squabble over Formula 1's spoils is more vicious than ever because the pot has now reached billion-dollar proportions, while there exists an uneasy truce - albeit with occasional flare-ups - between the governing body, the commercial rights holder and the teams.

And in the background there are moves afoot by two of the three to rebel against the proposed power units and associated regulations.

That this entire tinder box is ready to explode has long been evident, but its smouldering twigs were fanned a week ago when FIA president Jean Todt, on a road safety visit to Australia, made clear that the country 'should' remain on the FIA calendar - after commercial rights holder Bernie Ecclestone had suggested its grand prix should be dropped over, you guessed it, money.

Formula 1 is currently governed by the 2010-2012 Concorde, which took well nigh four years, a rewrite of the regulatory procedure, plus the threat of a split and the departure of the incumbent president to agree. Since the current covenant expires (in real terms) in 20 months, all parties are adopting full posture modes.

The stakes are higher than ever before, and not only because of the depth of the 'pot'.

The original 13-year commercial rights lease, under which Ecclestone's group of companies, since sold to CVC Capital Partners but still controlled by Ecclestone, acquired the rights to exploit F1 originally expired at the end of 2010. However, this was automatically extended by a century (yes - without further financial adjustment) following meddling by EU Commission politicians.

Sources, though, advise that where the original deal included an annual fee (initially $300,000 but with substantial escalators) paid to the governing body by the commercial rights holder, the 100-year extension, whether by design or error, allegedly provided for no such payment. This was exclusively disclosed here almost a year ago.

Thus for the last year and going forward for ten decades the FIA not only faces, in real terms, diminishing revenues, but has also ceded a vast portion of F1's regulatory process to the teams.

Said another source, "The FIA could probably live with one or other of the two, but both?"

Given that the amount is now estimated to reach around $15m per annum and rising (over 100 years that pans out at an extremely tidy sum), the FIA is expected to strike back with every weapon in its arsenal, starting with calendar approvals: the commercial rights holder has the right to draw up calendars, but the FIA's World Motor Sport Council reserves the right to approve the schedule. Approval may not be unreasonably withheld; still...

Bernie Ecclestone © Sutton

Consider Bahrain's cancelled race: the FIA remains under obligation to approve changes to the current calendar - a move the commercial rights holder would obviously push for should the civil situation in Bahrain improve. No less than $40m plus an obligation to around 180 TV broadcasters worldwide to air 20 races in 2011 rides on the grand prix. Oh, to be a fly on the wall during those discussions.

The FIA can also stick to the letter of its own regulations by demanding that, as part of the track licensing process, new venues - the number of which increases annually - hold candidate events as proof of proficiency and readiness prior to their inaugural grands prix. We know what that would have done to Korea, but, looking forward, such insistence could well scupper Delhi and Austin.

In a stand-off the FIA could refuse to countersign the new Concorde Agreement, or even promote a competitive premier open-wheel series - much as it did with its Formula 2 Championship, which weakened the hold by CVC's GP2/3 series on feeder formulae - by enticing F1 teams to jump ship to the alternate championship. The carrot: total control of those commercial rights, with an annual fee paid to the FIA. In this case it would be the FIA and the teams versus the commercial rights holder.

That there is a ramping up of hostilities was evident earlier this week when Ecclestone reportedly criticised the brainchild of Todt's handpicked technical lieutenant Gilles Simon, namely the 2013 engine formula.

"I'm anti, anti, anti, anti moving into this small turbo four [cylinder] formula," Ecclestone told Australian media colleagues. "We don't need it, and if it's so important it's the sort of thing that should be in saloon car racing. The rest of it is basically PR - it's nothing in the world to do with Formula 1.

"These changes are going to be terribly costly to the sport. I'm sure the promoters will lose a big audience and I'm quite sure we'll lose TV."

Set aside the fact that Ecclestone's Brabham team is the only outfit to have won the title with a turbocharged four-cylinder unit - for then (1983) he was racing for his own account, whereas now 12 teams line up for him - and consider how that statement sets the commercial rights holder and F1 in general on a collision course with the FIA.

Jean Todt © LAT

The teams have long expressed negativity over the new engine formula, forced through by the WMSC in the nick of time in December after a concerted effort by various teams to retain the current 2400cc V8 regulations on cost and aural grounds. In fact, in Monza last year a senior team source made clear to this column his aversion to the then-proposed engine format.

"I think the next step is for the FIA to establish how many takers it has for the new engine, because we know how many we have for ours [the existing formula]..." he said at the time. Note the threat.

Rumours are now rife that team and engine supplier factions are lobbying behind the scenes to retain the current V8s, which, of course, gets the teams neatly onside with Ecclestone against the FIA.

Thus we have the FIA and the teams ganging up against Ecclestone, and Ecclestone and the teams siding against the governing body. But every triangle has three sides, and so there exists a third, at this stage notional, dimension: FIA and the commercial rights holder versus the teams.

In the past this was a given, for Ecclestone and Mosley were reckoned by most to be joined at the hip; as the foregoing shows there now exists an arms-length relationship between Ecclestone and Todt. In fact, Ecclestone has voiced more discernible criticism about the FIA since the latter assumed power in October 2009 than he did during Mosley's full 18-year tenure as motorsport's top administrator.

Every Concorde signed to date has had two opposing factions. However, where before it was the teams, led by Ecclestone, versus the governing body, the last two have seen the FIA and commercial rights holder (the 'Max and Bernie Show') generally act in unison against the teams through their very effective deployment of divide and rule tactics.

Unless Ecclestone and the FIA soon find common ground both may find the tables turned by the teams. It is no secret that FOTA is intent on an increased share of the sport's revenues, well up from the present 50 per cent that is divided amongst the dozen entrants. In fact, during recent testing in Barcelona one team boss stated, "Anything less than 75 per cent won't even be considered." 80 per cent is the most likely target the Formula One Teams Association has set itself, dropping just five per cent if push comes to crunch.

FOTA meeting © LAT

Given that the commercial rights holder's streams are already under pressure, as outlined here last week, CVC faces two solutions: increase race hosting and TV contract fees at a time when discounts are being negotiated, or up the number of races from the present limit of 20. However, teams are reluctant to commit to any increase due to the direct impact on budgets, and have stated so unequivocally.

Thus, Ecclestone needs every bit of help he can find, and thus needs to woo the FIA. The big question is how - but, given his mastery of any given situation, the odds are strong he will find a way. That will be one of the more intriguing aspects of the fight ahead.

The foregoing is just a taster of various scenarios as they exist at present, and the list is by no means complete. While the acidic outbursts associated with previous negotiations are not (yet) evident, it is a different picture behind the scenes - much like an unhappy married couple keeping up appearances for the sake of the kids. In fact, various meetings have allegedly been held both within FOTA and with the commercial rights holder in this regard, and it is only a matter of time before the FIA pitches in.

However, under Todt the governing body has adopted a policy of quiet diplomacy, so such negotiations are likely to be kept out of the public eye, although one wonders for how long the body will remain silent. Ultimately things are bound to leak, particularly when, in the words of one seasoned F1 personality, "We get closer to the court steps." F1's summer break is likely to be a fraught period (as in 2009), as will be the winter recess.

One thing is sure, though, the vitriol has every chance of matching that of 1981 or 2009 (when breakaway series came close to fruition), if only because all three parties are negotiating for their own accounts, yet have certain areas of common interest. A coalition between any two of the three could prove the way forward; equally, that could potentially destroy the sport in its current guise.

In an ideal world the FIA would have a 50 per cent say in F1, and the commercial rights holder and the teams 25 per cent each. However, 25 per cent and 25 per cent equals 50 per cent, which would dilute the FIA's quest for control, whereas a coalition between the FIA and the teams would put the commercial rights holder's billion dollar revenues in jeopardy. Equally a tie-up between FIA and CRH would overwhelm the teams, who would break away. Can you see where this year's politics are heading? Go back 30 years for a clue.