The departure of Luca Montezemolo from Ferrari is a move of gigantic proportions in the geopolitics of the sport – and it has a number of implications that may not seem obvious.
Back in the 1970s Montezemolo was the bright young boy at Ferrari and after putting Ferrari back on a winning path he went on to a glittering career in various Fiat-related companies and projects before being put in charge of Ferrari in 1991, after he had finished organising the 1990 World Cup competition. By then Enzo Ferrari was dead and the Ferrari company had lost its way in F1 terms. Fiat boss Gianni Agnelli decided that it was time for a change and brought back Montezemolo as Ferrari chairman and managing director. It was November 1991 and his brief was to sell more cars and to get the F1 team winning again. Remember that after 1983, Ferrari had not won a Constructors’ title, overshadowed by McLarens, Williamses and later by Benettons as well. At the time Ferrari sold 4,500 road cars a year and Montezemolo ramped this up to reach 7,000 by 2008. The company recently announced its intention to cap production at 7,000 vehicles a year in order to maintain the exclusivity of the Ferrari brand. This means that prices will go up. From the moment he took over the progress was positive but Agnelli still needed to be patient and it was not until 1999 that Montezemolo finally found the right formula with Jean Todt, Ross Brawn, Rory Byrne and Michael Schumacher. In the same period Montezemolo used Concorde Agreement negotiations to force Bernie Ecclestone to give Ferrari more money than the other teams. Ecclestone and Ferrari worked hand in glove – as long as the money kept coming. The legacy of that is that today Ferrari gets around $120 million a year before the prize money is decided upon. Some of the others have negotiated lesser deals but they are peanuts compared to Ferrari’s ransom. By 2000 Ferrari was dominant but did not do what Mercedes is currently doing and allow its drivers to fight. Michael Schumacher was the number one and if the second driver did not like it, it was tough. The success propelled Montezemolo to a job with Confindustria, the Italian employers association, and in 2005 he was appointed chairman of Fiat because the Agnelli family had lost a generation to illness and suicide and as the older group died off, the third generation was not yet ready. Instead the family turned to Montezemolo to be the chairman until the new boys were ready for the job. Luca would remain in the role until 2010 when John Elkann – by then 34 – took over. Montezemolo went back to running Ferrari, although he dabbled in politics, setting up the Italia Futura political movement and holding shares in various other businesses, in the furniture, cashmere and high-speed train sectors.
His major idea after the break-up of the winning team was to recreate the same success with Italians in key positions: thus Stefano Domenicali became team principal, Luca Marmorini headed the engine department and Aldo Costa ran the design team. It did not work and thus Ferrari drifted backwards as McLaren, Red Bull and Mercedes rose up to defeat them.
The disappearance of Montezemolo is not just about Ferrari, of course. Ferrari is a powerful force in F1 and while Luca was old school and happy to get what was best for Ferrari no matter what, the feeling today is that the sport is in danger of destroying itself with profligacy, and with a commercial rights holding organisation that strips money out of the sport in vast quantities, and which does next to nothing in terms of promotion or investment for the future. Thus the disappearance of Montezemolo, as with the disappearance of Max Mosley from the FIA, weakens the hold on the sport enjoyed by the Formula One group. People today don’t just agree to everything, and even Ferrari may now see the benefits of taking out the middle man and dividing up the revenues in a more traditional manner. Resistance may not be open, but it is growing. A new generation at Ferrari may understand that while Ferrari can go on doing what Montezemolo was doing and getting bigger and bigger payouts at each negotiation, the best long-term solution may not be this way. There are bound to be those who will argue that the time has come to get a better deal for everyone, while at the same time, trying to find ways to cut costs. When it comes to a spending competition Ferrari is only a big player when it is not against a Mercedes or a Honda. Thus, cost control becomes important. Time will tell whether this happens, but one thing is certain: of the three big players in F1 in the last 20 years, there is only one still standing. Max Mosley is gone; Luca Montezemolo has followed. The survivor, Bernie Ecclestone, is 84 in a few weeks. He has survived a bruising brush with the authorities in Germany and he must be wondering whether one day soon the risk-assessors at CVC Capital Partners will re-assess his value.