The Formula 1 world is basically”on hold” at the moment with regard to any political decisions because of the recent legal activity in Germany, relating to the Gribkowsky Affair.
There has been little real progress on the Concorde Agreement, the F1 entries have been put in by the teams and rejected by the FIA, which is working on the basis that the final date for entries is now in September. This will give the teams the time to decide whether they want cost-cutting written into the rules or not. Some do, some definitely do not. But no-one seems to be making any decisions until it is clear what is going to happen with Bernie Ecclestone. His staff insisted up until Saturday night that he was going to be in Germany, but he did not show up and while he does miss quite a few races these days, this one appears to be rather more significant.
There have been stories for some time that suggest that Mercedes-Benz is not signing any new Concorde Agreement until they know what is going to happen to Ecclestone. It is hard to know if this is the truth because transparency in these sort of matters is non-existent. In theory nine teams have agreed terms, although it is not 100 percent clear whether they have actually signed, because the Concorde Agreement includes a lot of things that are not yet decided, notably the Sporting and Technical Regulations, which make up Schedules 7 and 8. They might have agreed in principal to Schedule 10 – the key financial section – but I wonder how many have actually put pen to paper. It may be that they have all signed side letters which include their own versions of the deal.
However, it is also fairly clear that the FIA has not yet signed up to anything. It is not going to be easy to run a series called the FIA Formula One World Championship, without the FIA being involved, because not only does the federation own the championship, but it also owns the rules and so one cannot simply start a new championship based on the current rules. There is also a question of licenses for drivers, staff, circuits and so on. It is not really possible for the championship to be run without the FIA. If it had been it would have happened years ago, during previous rounds of negotiation. I am quite sure that the FIA will in the end sign up if there is a financial incentive to do so. It does not seem to have any desire to try to run the F1 commercial empire as a side business and while it might take the rights away and give them to someone else (as happened recently with the World Rally Championship) that would be a major step and it is doubtful that the federation has the stomach for a big legal fight.
joeblogsf1 
It can be dangerous to assume that the alternative will be better, but I wish the FIA would gear up for the fight to take the rights away from the current owners. As other pieces have recently stated the teams and circuits who put on the show need to be treated better along with the fans.
About time the Mole sent Penelope (Roedean [Carey Mulligan*]) and Penelope (Cheltenham Ladies [Honeysuckle Weeks*]) to have a girly chat with karen in the powder room…
*in my head
‘The Mole’ – The Movie?
What about it Joe? Or is it too likely to be an ’18’ certficate than a ‘PG’?
WIth that cast let’s hope so eh..? 😉
Joe,
So you seem to be suggesting that the hold up for Mercedes is not the Concorde deal itself, but the blow back if Bernie is indicted. That further suggests the Mercedes board is holding the team to ransom over F1 and have a lot of clout in this respect. So now Bernie has not been arrested in Germany (if that was really on the books, which seems likely by Bernie’s no show at the race) and the German Authorities have to think if they want to get the UK to extradite him without him disappearing, then all of this could drag out for months and months. So will we go without a Concorde agreement next season if the FIA and Mercedes continue to hold out, or is there some looming milestone that will cause them to blink and sign? If doing nothing is the solution where will that leave the teams who want resource restrictions?
Expect the German GP to disappear from the calendar for next year. That way Bernie never has to go there!
Very good points. Added to this I would say that some of the big F1 sponsors must be getting worried – the last thing they’ll want is to be associated with bribery and financial shenanigans (although the banks who sponsor F1 might be more relaxed about that…). At what point will they declare their contracts void and stop writing cheques? The teams must have strong feelings about this, but they dare not say anything that might upset the emperor. Remember Adam Parr? Omerta rules in F1.
Actually, if all the teams suddenly lost half their income and had to lay off half their staff, F1 would soon become much more interesting again. In the short term the billionaire-backed teams would win everything, and the smaller teams would go bust, but this would force a re-structuring of F1 which could only be good.
Well said, albeit, I am struggling to think of a team (and much else in F1) that is not billionaire-backed either directly or through some proxy. No wonder ticket prices seem reasonable to them. To put it into perspective, it costs about the same (in the UK) for a decent weekend grandstand seat for two as it does to have a good go in an F1 car yourself, for a day.
I was musing earlier – most of the races are loss-making, and are either vanity-projects or depends on the difficult-to-measure secondary effects on local and national business to make back the money.
Many of the teams seem to be loss-making, and several seem to be vanity projects.
Bit of a house of cards, isn’t it?
Thanks for the update on this Joe (even though it more or less boils down to “nothing new to report” its still significant).
After all the big open fights, is it more clever and calculated thinking (mature behaviour, looking the reality in the face?), or the delicacy of Bernie’s situation for blue chip partners like Mercedes, but surely for CVC itself and maybe the FIA as well that kept this round of negotiations without serious breakaway series rumours and open mud slinging?
any thoughts on bernie’s uncharacteristic offer of free money to the bankrupt nurbugring? a benevolent gesture in return for some leniency in court?
any thoughts on bernie’s uncharacteristic offer of free money to the London GP project? a benevolent gesture in return for some leniency in court?
Oh!!
Nothing in this post sounds very realistic
I wonder what break clauses were in the 100 year agreement granting the Formula One Group the rights to run the F1 championship? It would be quite normal to have as one of the break clauses on such a contract to read something along the lines of: “Should one of the entities be a party to a criminal action”. Would an arrest warrant against Bernie meet this condition? Cue wheel in the lawyers by the truck load.
Wilson
Oooooh, good point!
But presumably Bernbie is no longer the partner to the agreement; CVC will be.
Well, John J, given the fact that Bernie and his Family thrust still own about 10% and CVC is down to about 34 by now, I think it might be possible to play this out in negotiations by the FIA
Maybe, finally maybe this is the time for a new future. Every time the concorde agreement comes around we hope something will change….
If BE gets his way the next time will be 2020.
I guess the floating in Singapore is off for a while too?
Bernie told the press – repeatedly – that he’d be at the German GP. Then, at the last minute, cancelled meetings, Bernie’s not coming. A smoke screen? Doubtful, Bernie didn’t make a big deal about it.
What was he avoiding? Arrest? Again, doubtful, the prosecutor could issue an arrest warrant for him at any time. Were an arrest warrant issued, Bernie would be immediately fired by CVC, his involvement in F1 would be an an end – game over.
So what was Bernie avoiding?
Joe, can you tell us all why the Concorde Agreement has been historically a “secret” document? What could possibly be contained within that could not bear up to public scrutiny?
It is a contract.
Premier league football contracts between clubs and governing/commercial body pretty transparent. So is who gets what prize money
Just more of the BE culture of back door double dealing antics
Agreed, however, if and when they float on the market their books will have to become more open. Having said that, it will still not tell us the distributions of funds per each team.
As luck would have it, Bayerische Landesbank (yes, one and the same) recently filed suits against a couple of US banks, in which BayernLB asserts claims for common law fraud, fraudulent inducement (“Eingehungsbetrug”), and aiding and abetting fraudulent inducement, and seeks compensatory, rescissory, and punitive damages…
Question is, does Mercedes have the stomach for this nuclear approach,or do they employ a proxy, e.g. ADAC.
stay tuned
I can’t seem to find that case, or mention of it, but it’s a old adage that he who cannot price a instrument (is stupid) sues to avoid embarrassment.
Harks back to (State prosecutor) Rodler’s rather excellent comment, “Gribkowsky was looking for an exit from the dusty state-owned bank . .. ”
“dusty” when applied to a bank reminds me of the then chief of Baring’s trying to wriggle his way out of being an idiot, on camera, and digging himself a deeper hole with every facial gesture and inflexion of voice. I can assure you that family lost its intellectual nuts generations ago, with recent direct evidence.
Does MB even need a nuclear option, when days before Grib was sentenced, Rodler said Ecclestone “hasn’t been blackmailed, he is a co-perpetrator in a bribery case,” [. . . ]
all this from a old Bberg report: http://www.bloomberg.com/news/2012-06-27/ecclestone-co-perpetrator-in-bribery-scheme-prosecutor-says.html
and there is much much more to be found along the same lines.
I am trying to think whether, similarly to mental competency*, one is able to construct an argument that a breach of contract (possibly via good will) may arise from indictment of a counterparty.
Joe usually knows far more than he lets on, and I am tempted to bet his recent exploration of possible new financing models is related to the fact that for all intents and purposes, every governing contract has hit the shredder. Maybe one like Bernie’s, which can eat the staples too . .
Sadly, whilst all this was going on I was being a emotional baby, shocked by a slew of symptoms which could have meant anything. I feel it is time I caught up. AFAIK I am the only F1 fan who supports Grib, and although I do not expect a reply, his appeal pending, I am tempted to send him a postcard at Stadelheim. I have many reasons to support Grib, not least because I believe him to be a fall guy, nor least because the person at a stupidly politically in-crowd hedgie called Grib a jerk and is a bigger a-hole by far, but also because his trial, destructive as it may be to the F1 setup, might just be the ticket to finally open the windows and get us fans some fresh air.
aside for cvrt, I am on a quack – enforced chill from heavy work, so suddenly have spare time (which I keep trying to fill with new projects, leopard won’t change spots) but my German is not up to it, (I think because my father spoke German only when really pissed off, so I have a hangup) however I am very willing to go digging for clues. I keep saying it, but there’s brainpower aplenty around here, many with time to hand, to, as our east end local lingo goes “bus’ this case”.
*any substantiated accusation of mental incompetency under Companies Act bars a person from acting as a director, invalidates their actions.
Bayerische Landesbank v. Bear Stearns & Co. Inc., et al., case number 12-cv-02804 (in SDNY) and case number 653239/2011 (in NY state court)
Bayerische Landesbank v. Merrill Lynch & Co, et al., case number 12-cv-03856 (in SDNY) and case number 651480/2012 (in NY state court).
Thanks, pal, will pull the file! ~ j
So, what happens if everyone does nothing? Is there a provision by which the old terms continue until new terms are signed? Or does everything stop if no new terms are signed? Or do we not know the answer?
There are contracts in place with most of the circuits. There are contracts in place for TV coverage. It is not necessary for entrants into F1 to be signatories to the Concorde (Williams, McLaren and Tyrell opted out one year).
What may cause problems is that the promoters will lose some guarantees. EG under Concorde F1 promises a minimum number of entrants. Those may fall away.
And rule making changes. When Max Mosely was trying to push through budget caps or the silly two-tier F1 he was able to suggest those because the Concorde had lapsed and so FIA had a freer hand in rule changes.
But F1 could and probably would go on.
There is a basic provision for all E&W contracts called continuation. In the event of non – breach, on expiry, it all carries on, subject to periodicity as performed, but becomes what is called a effective contract, because everything can now be varied at will (just about).
This is also known, or rather described to me, by a man although lovely in person, got his own spoof column in Private Eye because he was a right b’stard in Court, “Lawyer’s Paradise”.
Maybe I should dust off my (fairly recent!) copy of Chitty on Contract, a wonderful practical work. He started out on property law, when it was as silly as “if you have seven geese, but only one hen, you may be evicted at will; but if you have a birthing cow, you may not be so evicted” (my words, I have a original, just too lazy to go open it, there is a scan on archive.org)
In short, this is why F1 has not ground to a halt, new CA absent.
But it may have a worse effect on the smaller teams, when that legal budget starts to mount. M. Todt surely knows all of this, and is going to play it.
My bigger concern, Joe, is the unsound financial underpinnings that support F1 today. Do we really believe that Santander Bank, UBS and DHL will continue as Olympic-style key sponsors? Do we really feel that 2 or 3 of the poorest teams will even see the start of the 2013 season? After all, Spain and Italy are not exactly flush with the kind of cash needed to keep individual teams (let alone an expensive sport) afloat. Just asking….
Who knows, but I worry about the future and see an URGENT need for a rethink. The City Fat Cats have raped the sport enough.
The City Fat Cats have raped nearly everyone!
When ONE individual becomes a Billionaire through promoting the sport while many teams have come and gone it speaks for itself. Vastly out of touch with current economic realities that are the tip of the iceburg of where the trend is heading.
Fans are experiencing ‘gouging fatique’ it borders on financial irresponsibility squandering Hundreds of dollars / pounds on 2 or 3 hours of entertainment be it F1, music concerts, football. etc. It’s time for the pendulum to swing the other way in todays economy.
A certain dimunitive fellow may not appreciate you throwing Petrol on the fire at this point as he may be up to his arse in alligators
Max sold the rights to Bernie for peanuts who then sold it to CVC for vastly more than he bought it ? That is my take on historical events ? Is that a correct, if rather brief, summary ? So who would you say is partly or fully responsible for the situation in F1 ?
I think we likely all agree about this and are grateful for this being voiced loudly and often, otherwise the “house of cards” (as mentioned in another’s comments) may all come crashing down.
I sense that there is quite a lot of talk about this in the media centre (Dieter Rencken’s column covers cost/value issues in his column on Autosport this week too) – has this concern yet filtered down to the paddock??
I would have thought there was a significant incentive for the FIA to gain full control of the F1 circus. One only needs to look at how well FIFA has done out of the World Cup to see why. There would be a few members of the world council who would be able to line their own pockets using the revenues that F1 would generate.
It used to be that the FIA or FISA controlled everything (rights, rules money) via Max, Bernie and Jean Marie. It was a closed shop, almost a complete monopoly on all motorsport. In the meantime wherever there was a popular televised national or club series the FIA invented an FIA version with all rights retained by the FIA, circuits were allowed only FIA races. Some might claim that the FIA then effectively killed off all tv coverage of races except F1, which was to be the cash cow. All those that remained including F1 were via Bernie’s tv company. A German tv fella, effectively took them to Euro court and the commercial rights were taken from the FIA by means of leasing them to Bernie. The team were given a say in the money and the rules by means of the Concorde Agreement. It sounds ideal doesn’t it? That’s the gist of it, I’ve probably got some of it wrong and left a huge amount out, the history of F1 without any racing in it at all would make a good plot for a movie. I believe Joe has written an F1 encyclopaedia though it may be with former partners and out of reach.
‘That’s the gist of it, I’ve probably got some of it wrong and left a huge amount out, the history of F1 without any racing in it at all would make a good plot for a movie. I believe Joe has written an F1 encyclopaedia though it may be with former partners and out of reach.’
I agree.. ‘F1 the full story’, would make a great film !
Is this encyclopaedia true, Joe ?
You’ve suggested in the past Joe that the best interests of all teams will only be served if they have control of the sport, so it’s really too bad that the whole FOTA partnership was scuttled by Ferrari (as expected).
Are past Concorde Agreements sealed? I’m sure one or two ex bosses (Stoddard, Jordan, Spyker) must have one kicking around. Are they still compelled through some arcane ritual (or lawyer) not to release it? Would be interesting just to see how daunting it really is.
There’s at least part of a relatively recent prior agreement kicking around the internet as I recall.
Not very up to date
How about another simpler reason for the Bernie no-show? He’s unwell?
I saw someone mention that he looked quite frail and tired at a recent GP, and most octogenarians don’t have his punishing schedule, could it be that simple?
Joe, have you noticed Bernie looking more frail of late?
No
If he was looking frail he’s probably practising for future court appearances the act of ‘forgetful old duffer’, a la Murdoch and of course the all time classic of the genre, Ernest Saunders, the only man in history to make a full recovery from alzheimers…
Yes, it was me who made the frail comment (re. when he climbed back up into the Berniebus after his interview with Lee Mackenzie at Silverstone), but I did also float the possibility it might be a Murdoch/Saunders-style act…
Look Bernie has a new very young wife to be, and just maybe the old fox is burning the candle at both ends. The little blue tablets works great, but do leave you looking dog tired, hence new look. Put it this way, he will go with a smile on his face, for sure….
Joe, just a small point – I understand the the FIA effectively control most world motor sport but there’s nothing to say that F1 should belong, or am I wrong? In other words, the main bargaining tool of CVC/BE would be, surely, if you don’t like what we do we will run it separately (in the same way the teams/FIA can, but won’t, do the same)? No point in having rights when you can’t put on a show.
Steve: I think that the FIA control licencing of drivers and tracks, so they would be able to stop anything going on that they didn’t like.
Point taken but I would have thought that it might appear as anti-competitive to ban drivers, or circuits, in competing in another series organised by another organisation. Given that the same drivers or circuits would have already established credentials approved by the FIA what reason could the FIA legally provide in effectively banning such a series?
Unfortunately (or not depending upon your point of view) the FIA have established themselves as the overall world motorsport authority and have been accepted as thus in all relevant countries. (except the USA maybe where the concept of “world” is somewhat different)
I understand the fact that they have been accepted as such is in itself a legal security.
In fact American interests are represented in the FIA by ACCUS (which from memory includes IRL, Nascar etc).
Whilst it’s true that the scenario I described is unlikely happen, F1 is really a ‘sport apart’ these days and I’m unaware of the ‘legal security’ the FIA may hold – that would need to be tested. Taking in account the vast sums of money at stake anything is possible. If I was BE/CVC, and had no respect at all for conventional solutions, I would do what a like. Of course it was easier by BE when Mosley was in charge,
On further cogitation, I suspect there are 3 reasons Bernie didn’t visit Germany – Gribkowsky, Gribkowsky & Gribkowsky. He may have a certain immunity, but the fact of his absence strongly suggests Bernie’s legal team is not at all confident the immunity agreement would have prevented his arrest.
While it’s true that the German prosecutor could issue a European arrest warrant for Bernie at any time, such warrants are not always speedy or effective. This can be especially true when dealing with individuals represented by robust legal teams.
We only have to look at the recent Julian Assange case to see how ponderous the fulfillment of a European Arrest warrant can be. Assange’s was a rather simple case, extraditing a person from the UK to Sweden for a minor crime. Even with legal budget that by Bernie Ecclestone’s standards could only be described as modest, Assange successfully delayed extradition for a full 18 months.
Given that Bernie is one of the wealthiest individuals in the United Kingdom, one imagines his legal representation would be ‘slightly’ more monied than that of Assange. It would not be surprising were someone of Benrie’s means able to delay extradition for a similar, perhaps even longer amount of time.
Wealthy defendants of Bernie’s age have often played a “run out the clock” legal defense. Who knows what could happen in 18 months? The legal case could collapse, a trade could be arranged for evidence in another matter or the aging defendant’s health could “take a bad turn”, leaving him unsuitable for travel.
This – one suspects, is why we don’t have a new Concorde agreement. Mercedes and Todt are waiting for the European arrest warrant to be issued. The Germans know that once issued, they may never get their hands on Bernie, though they will end his career.
If indicted, it’s terribly difficult to imagine any scenario where Bernie’s connection to the sport wouldn’t immediately be severed.
Joe I asked what will happen when Bernie dies will we have a civil war between the teams , FIA and cvc etc , you joked that Bernie said he will not die , ok your been funny but I was hoping you would be able to tell us what you really think will happen when he does die , or are you worried about giving a opionion in case you upset Bernie and your press pass is taken from you ?
Bernie is way smarter than that. He knows that if you throw out your critics you create an even more dangerous problem as then you have critics with a grudge AND nothing to lose. Thus Bernie generally tickles the ego of people he considers to be damaging F1 by whispering sweet nothings into their ears and thus tames them and they become dancing monkeys for the organ-grinder. That usually works. If not, he will try to convince. If that fails he also knows how to listen, which is one of his greatest talents. I do not understand why people are besotted with the idea that Bernie can/might pull an F1 press pass. It is not actually under his control. F1 media passes are issued by the FIA, with decisions made on this subject by the Press Commission, which is made up of journalists from the sport. And, in any case, honest and fair criticism is good for the sport.
As to what happens in a post-Bernie world, I have idea. The sport has a momentum of its own these days and the various divisions in the Formula One empire will work for someone else, won’t they? Any restructuring will be done at management level. I suspect that there will be a bunch of managers reporting to a CEO and a board. The future may be more corporate, but F1 is not going to stop and die.
Joe, I can only guess you’re unaware of the times Bernie has removed press passes, some in the not too distant past.
While the previous FIA head was far more known for that sort of conduct, the truth remains that Bernie himself *has* independently pulled press passes. He may have orchestrated it through the FIA, but he did it.
Random,
Names some names if you think that is true and I will tell you what happened.
It just has not happened and if you think it has, you are sadly deluded.
I’m not deluded, and I’m not overly surprised you were not in the loop. I wouldn’t expect any single person to know every move Bernie has ever made. It’s hubris to believe otherwise.
As for names, I’ve given one that for whatever reason you’ve chosen to ignore. Admittedly that was Max’s work. As for others, (unlike Rubython) they didn’t file public lawsuits, so it would hardly be fair to make those situations public.
These things are dealt with in a relatively open way, as I have already explained. If you think that you know other stories then I am happy to hear all about them. If you are going to make such claims against Mr E then back them up with facts, not waffle. I have been pretty critical of Mr E over the years and I have experienced his displeasure, but at no point did I feel that my pass was seriously under threat. I have no idea to whom you are referring that I have “chosen to ignore”. I am completely mystified.
I have asked several of my experienced colleagues in F1 and none of us have can think of any examples. Rubython was denied a pass in 2003 because he did not qualify because the readership of his magazine were not large enough to warrant a pass. He went to the High Court and lost the case. There have been people who were turned down for passes for similar reasons. There might perhaps have been one or two who had their passes taken away because they were not honest in their pass applications, but I cannot remember them. The photographer Keith Sutton had his pass pulled for three races (as I recall) because he took pictures of the Parc Fermé after being told not to do so. There may have been someone who punched FOM’s Pasquale Lattenedu at some point (possibly at Silverstone) but that was not a serious F1 reporter. The only other case we can think of was so long ago as to be almost prehistoric and related to a French journalist who was not friends with Jean-Marie Balestre.
If you are someone who knows these things, fine. Stop hiding behind a pseudonym and declare yourself as being someone to be taken seriously, and give us examples that you can back up.
As far as we are concerned no-one in the modern era has ever had their pass pulled for something they wrote.
Thanks joe .
Appriciate your response
Joe, on the subject of passes, sorry to be off subject a little, but didn’t Bernie give Murray Walker some sort of Special Pass, when he retired from the mike? I remember a ceremony of sorts at his last Grand Prix. Is it correct that former World Champions get a pass for life, or is that just a rumour?
There are honorary passes.
What a farcical mess. why is one of the worlds biggest sports run in such a way ?