The Brazilian Grand Prix will bring to an end a very long Formula 1 season, and while there is some interest in the on-track activities, notably the fight for victory and for the minor championship placings, the main focus for the team principals is likely to be the Formula One Teams’ Association (FOTA). This body is trying to sort out the question of the Resources Restriction Agreement (RRA), without blowing itself apart. It is crazy for FOTA to fall apart over such a thing and one would assume that the people involved these days are smart enough to understand that. The bigger picture is the need for the teams to have collective bargaining power in their negotiations with the FIA and with the Commercial Rights Holder. FOTA has a lot of good ideas but not many of them have yet been turned into reality. It existence has also made the F1 Paddock a much less stressful place as the team’s are not slitting one another’s throats to the same extent that they used to be and when a report favouring some action by one team would result in another team getting upset.
The RRA is a problem in that the big teams think that it dictates their ability to compete. Most teams do not have to worry as their budgets are not high enough to be affected. However, they all want to compete and they all want to keep costs to the minimum. The problem is that they cannot agree on how to do it. It is a difficult one because there are lots of ways of interpreting the RRA guidelines. No-one is cheating, but all of them are stretching the rules, and working in “grey areas”.
But the RRA remains the secondary issue. Unity is the key to negotiating a better deal with the commercial side of the sport and, perhaps, in finding a way to gain more control over that. Do not forget that the original Concorde Agreement back in the 1980s gave the teams the control of the commercial rights that now belong to the Formula One group. There are not many team bosses who were around then and are still about today but everyone should at least know that. If there is to be a longterm solution it must address that question. The teams might agree to a new deal with 75 percent of the revenues, as opposed to the current 50 percent and edge towards a more normal balance between sport and business, but they might also try to save another five years and go straight to a more usual 85-15 kind of level. There really is no reason why they could not in fact go for the whole thing (with a little given to the FIA) if they can create a suitable structure to achieve that. This would be best for the sport because the constant fights of the last 30 years have not done anything other than holding back the sport.
The answer that will probably emerge from the meetings in Brazil is that the RRA needs to be policed by someone other than a gentleman’s agreement. That needs to be an authority that has some clout and logically it would be the FIA if the sport is to remain neat and tidy. But the FIA is not going to take on such a task without having someone else pay for it. The finances of the federation have been stretched in recent years because of the deals that were done in the Mosley era and there needs to be some tweaking before the federation agrees to be a financial authority as well as a sporting one. The option is a third party, such as an investment bank or a management consulting company, but they will also want money and they will only have the power that the teams agree to grant them. Transparency in these matters is really what is important and with teams all having to file returns these things are easy enough to find, although perhaps not to interpret, as enthusiastic amateurs tend to make a pig’s ear of assessing what company returns actually mean. In any case, creative accountants are experts at hiding what they want hidden and it takes equally creative accountants to unravel such things, and there is no guarantee that they can because they do not know what they are looking for.
Fry says Horner is wrong to say that without the RRA, there’s not much point in having FOTA.
“I think the key to FOTA is – as it was last time round – a solid negotiating position for discussions with the promoter about our financial situation. And that was the making of FOTA. I personally think that we need to refocus FOTA on that. Areas which do govern sporting differentiation should be with the FIA.
“We should look at the successes and not look at the difficulties. Over the last four years intensely competitive teams have agreed with each other on pretty much everything, and that’s a huge achievement. With regards to the RRA, the overall cost of F1 has undoubtedly come down. The numbers show that. That’s great because in this economic environment we should be spending a sensible amount of money and not a crazy amount of money.”
Will the teams be able to solve all their issues? It’s unlikely to all be sorted in the Brazil meeting – but clearly that is an important step toward the future of the organization.