F1 teams ‘screwed up’ financial negotiations


F1 News
Date: 22/September/2013

F1 teams ‘screwed up’ their chance to negotiate a fairer distribution of prize money, while efforts to control costs have also come to nothing because of ‘self-interest’.

That is the opinion of Caterham boss Tony Fernandes and supported by other team principals from outside of the big four - Red Bull, Ferrari, McLaren and Mercedes.

Costs will rise significantly in F1 next season due to the development of new engines - the price will double according to Toro Rosso’s Franz Tost - increasing the frustration felt by the likes of Fernandes.

“I’ve been consistent since day one I’ve been in Formula One that costs are too high,” said Malaysian businessman Fernandes, who owns an airline, hotel chain and British football team in addition to Caterham.

“When I came into Formula One, people talked to me about costs coming down but I don’t think there’s been a single year it’s come down. I think next year will be probably the highest year – so I think there’s something fundamentally wrong.

“I don’t think it’s just the engine, by the way, I think the teams lost out an opportunity to get costs under control. I think self-interest overrode the sport and we are as much to blame for this problem as an engine.”

The rising costs could at least have been eased if more money generated by the sport was re-distributed to the competitors.

Fernandes stated that teams threw away the chance to negotiate more prize money from the commercial rights holder when some top teams split from the Formula One Teams’ Association (FOTA) and cut their own deals with Bernie Ecclestone.

“The teams had a wonderful opportunity to try and create a fair, equitable split so that the sport is sustainable,” said Fernandes, speaking at this weekend’s Singapore night race.

“I’m obviously in another sport [football] where I think the difference between the top and the bottom is not as great as between the top and the bottom in Formula One. If you look at the Premier League, the winner of the Premier League’s share of prize [money] versus the team at the bottom is not as spread out.

“Teams looked at things on an individual basis as opposed to working together in FOTA and trying to find a win-win situation for everyone and create a very healthy environment in a sustainable sport.

“We screwed it up, it’s as simple as that.”

That verdict was backed Force India’s Bob Fearnley, who felt ‘greed’ by the top teams caused the collapse.

“I tend to agree with Tony. I think we’ve had wonderful opportunities and we’ve collectively failed to be able to bring the deals together,” he said. “There’s a certain amount of greed comes in from the top teams as well and I think they have to take some of the responsibility for that.”

“There were loads and loads of meetings, loads and loads of proposals but at the end of the day, some teams decided to split and when that happens, it’s a divide and rule situation and the whole thing falls apart,” stated Tost. “One by one, people decided to do their own thing.”

Lotus team boss Eric Boullier confirmed teams “clearly missed the opportunity” while Claire Williams, daughter of team founder Frank, admitted “We’re all too competitive.”

With the teams unable to reach agreement, one possibility is that the sport’s governing body, the FIA, could step in and enforce some spending limits.

Fernandes felt such a move should not be needed.

“If we all sat together and agreed something, we wouldn’t need anyone to police it. The reality is we can’t,” said Fernandes. “If 12 people [team bosses] in a room can’t agree something, then that sounds fairly ridiculous.”

Tost made clear he doesn’t want the role of the FIA to expand into financial areas.

“For me, the FIA should not be involved in financial topics. The FIA can come up with [technical] regulations which help the teams to cut costs, but then it’s obviously up to the teams [how] to spend the money they have.

“It’s about the discipline within the teams. Sometimes we decide by ourselves to spend money for nothing, as with [increasing] testing.”

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