Why F1 chiefs are running out of time

Nothing better illustrates the utter mess Formula 1 presently finds itself in than the current debacle surrounding the sport's governance.

Last Friday marked D-Day for one last round of final discussions about the 2014 technical and sporting regulations plus a raft of items crucial to F1's future, yet one by one the scheduled Strategy Group (morning) and Formula 1 Commission (afternoon) sessions were postponed to December 9.

The decision to postpone only the second meeting of the Strategy Group since its inception in October was taken on Sunday morning at last month's Brazilian Grand Prix after it became clear there were numerous outstanding discussion points, despite the issues having been obvious for over a month. Meanwhile, the Commission, which debates and approves points escalated by the Strategy Group, was somewhat logically postponed last Tuesday, after team bosses returned to Europe.

There is no doubt, though, that both the Strategy Group and Commission need to meet PDQ. Crucial times lie ahead, with 2014's 'eco-friendly' regulations being top of both agendas and items such as increased overall weights (by 10 kilograms, to compensate for heavier drivers), a pole position trophy and permanent numbers - as exclusively revealed by AUTOSPORT - and revisions to F1's Superlicence procedure enjoying cameo billings.

HOW IT WORKS

The sport's (currently contentious) governance structure calls for the Strategy Group, consisting of four Constructors' Championship Bonus teams (Ferrari, McLaren, Red Bull, Mercedes), Williams (on the basis of its heritage) and Lotus (aka Team Enstone, as best-placed 'other' team in the previous season) to set the agenda for the Formula 1 Commission, working in conjunction with commercial-rights holder Formula One Management and governing body FIA. (See footnote)

Each group has six votes, with decisions taken by a simple majority and decisions escalated to the F1 Commission, an executive body made up of FOM, FIA, all team owners, eight circuit owners appointed by FOM (half from Europe, half from outside), a tyre-supplier representative, an engine party and two sponsor figures.

Williams has enhanced political status due to its heritage in the sport © XPB

The Strategy Group replaces the previous Technical/Sporting Working Groups, which were superseded by non-executive sporting/technical committees after the expiry of the 2009-12 Concorde Agreement, the covenant that outlines the mutual commercial, technical, sporting and regulatory obligations of the FIA, rights-holder and teams, and has yet to be fully replaced. FOM (now), though, holds individual agreements with F1's 11 teams.

However, to further muddy the waters, there are moves afoot to incorporate the TWG/SWG structures into the formal framework, with group meetings called as previously and chaired by the FIA. Where, though, the groups formerly fed motions (accepted by 70 per cent majority for future years, and unanimity for current seasons) to the F1 Commission, the groups will in future meet to discuss proposals, then prepare draft regulations for Strategy Group review.

Following on from that, the Commission debates issues and matters arising and puts these to the vote, with 70 per cent majority required to forward motions to the FIA's World Motor Sport Council for ratification and subsequent implementation.

STUMBLING BLOCKS

So far so good, except that the WMSC sits on December 5 as part of the FIA's Presidential Election/Annual General Assembly week running from December 2-6 in Paris. Clearly, then, the Council cannot ratify those matters on December 5 if information is received four days later. Crucially, such matters include final 2014 technical and sporting regulations, which are absolutely vital to F1's future given the swingeing technical changes facing the sport from March.

McLaren and Mercedes have expressed concerns about F1's new structure © XPB

Thus the WMSC faces four choices: ratify regulations escalated to it, despite these not having passed through the proper channels, leaving the FIA open to legal challenge; refuse to consider them (with dire consequences for the new engine formula); reconvene after December 9; or vote via fax, a mechanism introduced by ex-FIA president Max Mosley.

But there are no guarantees matters will at all progress to WMSC level - even had the Strategy Group/F1 Commission meetings been held as planned - for the Strategy Group's legality is disputed. According to sources, during the inaugural meeting on October 21, McLaren voiced concerns in this sense, while Mercedes questioned the structure of the F1 Commission, which varies from that outlined in certain commercial agreements and further differs from that agreed by all teams during an October 2013 meeting hosted by the FIA in Paris.

Said commercial agreements - known in F1-speak as bi-laterals, being individually agreed between teams and the commercial-rights holder and setting out (inequitable) commercial terms for participation by each team - specify that the six Strategy Group teams are represented on the F1 Commission, while the meeting in Paris agreed that commission composition and structure would include all teams as per the 2009-12 Concorde Agreement (in the continued absence of any substitute covenant).

ALTERED STATES

The 2009 document provided for the commercial-rights holder to appoint just six circuit owners (three from Europe, three outside) and the teams two - with such as Monza voting in favour of teams for obvious reasons, but now dropped. Teams could also nominate two sponsor representatives, both of whom must have been active and visible in F1 for at least five years.

But the latest F1 Commission agenda shown to this column reflects Rolex - an FOM (not team) sponsor, and active only from this year - as one of two sponsor representatives, with the other being Philip Morris, which is hardly active or visible in F1 due to prevailing legislation.

Rolex joined the F1 fray only this year © XPB

Quite how Rolex managed to manoeuvre itself into a position of such power and influence in a global sport so rapidly remained a mystery to most in the Sao Paulo paddock, for patently the watch company does not satisfy agreed criteria.

So the teams have been short-changed on two counts totalling three (crucial) votes, while the demise of HRT (and potentially others) could further erode team influence when escalating decisions to the WMSC.

At least one team boss is said to have made representations to FOM/FIA in this regard, partially explaining the postponement, while Pirelli is believed to have added testing (and other) discussion points.

All in all, November 29 was not meant to be.

WHAT NEXT?

Simply put, the WMSC, which does not, of course, exist solely for the sake of F1, will meet as scheduled on December 5 to ratify existing resolutions, such as 2014's F1 calendar, and matters pertaining to other championships and series, including world rallying, touring cars plus other sporting matters including the establishment of commissions.

The future of the Korean GP is among the matters the WMSC should clarify this week © XPB

For example, an off-road safety commission is believed to be under discussion, because non-circuit events such as rallying, raids and hillclimbs have recently suffered numerous incidents.

Outstanding Strategy Group/F1 Commission matters will then likely be subject of fax-vote ratification by the WMSC, meaning a variety of crucial points will hardly receive appropriate debate, for the chances of all 26 WMSC members being linked to discuss such items are the square root of zero...

The other alternative is for an extraordinary WMSC meeting to be convened on December 10 given that most - if not all - delegates will have been in Europe for the General Assembly until at least Saturday December 7. But consider the cost, inconvenience, time wasted and overall inefficiency in these times of resource restriction...

MATTERS ARISING

While the resolution of pressing issues is vital for F1's immediate future, the discussion points of October 21 as minuted and recorded provide pointers to F1's longer-term strategic direction.

According to documents shown to this column, moves are afoot to reduce the number of employees in teams to no more than 300-350. This will impact severely upon most operations, with the majors hit the most, for in discussions the six teams tabled their current manning levels as follows:

Mercedes has ramped up its staff numbers, but will it now have to cut back? © LAT

Ferrari 700
Red Bull 650
McLaren 630
Mercedes 600+ (NB team recently embarked on an intensive recruitment drive)
Williams 600
Lotus 500

All this points to dire times ahead for F1 personnel, and is again indicative of the ravaging effects of the sport's ownership structure, with venture-capital company CVC Capital Partners creaming off over £550m in direct profits in 2012, while F1's Strategy Group considers reducing the sport's manpower levels by up to 50 per cent! F1 personnel (and fans) could hardly be blamed if they elected to boycott products manufactured and distributed by companies contained within CVC's enormous portfolio.

Interestingly, as predicted last week, minutes of the Strategy Group meeting as shared with this column indicate the 'Customer Car Concept' is now dead, with the 'Eight-3' suggestions (eight teams of three cars each) inching closer to fruition after confirmation of various talks of mergers, acquisitions and possible closures.

First, though, F1 needs to sort its cost base, and here it appears Red Bull Racing is hardly doing its bit, for the minutes indicate the team is 'vehemently' opposed to any form of cost control in the belief that such restrictions are impractical and impossible to police. All good and well when you're part of a billionaire-owned marketing group, but hardly of consolation to F1 personnel employed by teams unable to maintain the levels of spend committed by the Big Four.

One of the alternatives discussed during the first Strategy Group meeting is to reduce the number of listed parts (those to which teams are required to own the intellectual property, as opposed to being proprietary parts), including such as radiators/heat exchangers, steering components and fuel cells and brake components. Titanic and rearranging of deck chairs spring vividly to mind.

SUMMARY

It seems F1 has not just left matters to the last possible minute, but by all accounts exceeded even its own lax standards by holding a series of crucial meetings after the very last WMSC meeting of the year, despite the introduction of the most sweeping technical and sporting regulations in many a decade being effectively two months hence.

Testing of the new cars begins at the end of January at Jerez, and everything needs to be shipshape by then if the sport is not to be heavily embarrassed in front of fans, sponsors and media, whether electronic or print. For a sport in which timing accuracy is all, this state of affairs surely disregards the products of one its newest sponsors/F1 Commission members.

Footnote: It seems criteria have been made up on the fly, for Ferrari has 16 constructors' championships; Williams 10; Team Enstone (10) [made up Lotus (7)/Benetton (1)/Renault (2)]; McLaren 8; Red Bull 4; Mercedes (0) save for one each during previous incarnations as Tyrrell and Brawn. Yet Mercedes has a permanent place while Team Enstone does not...