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FIA and FOTA reach budget cap compromise - in principle

A compromise is understood to have been struck in the stand-off between Formula 1's teams and its governing body the FIA over the mounting budget cap crisis threatening to tear the sport in two – with suggestions that the cap will still be implemented, but no longer in 2010.

FIA President Max Mosley insists that the introduction of an upper limit on spending is vital to the future preservation of the top flight and also to attracting new entries to swell the depleted grid, but the present incumbents are unhappy with the initiative on two counts – fearing that its optional nature will engender a confusing 'two-tier' championship of haves and have-nots that runs the risk of penalising the larger, better-funded teams who will miss out on the 'technical freedoms' granted to their capped rivals, and adamant that for the manufacturer outfits, a dramatic reduction from as much as a £200 million annual budget to just a fifth of that in less than a year is simply unworkable.

Following a number of long meetings and discussions between Mosley, F1 commercial rights-holder Bernie Ecclestone and the Formula One Teams' Association (FOTA) in Monaco this weekend, it is believed that an official agreement is now not far away – with the understanding that the basis for it is a deferral of the cap until 2011, with further concessions on Mosley's governance of the sport, which has come in for a considerable degree of criticism over the past year with the Englishman being deemed to have taken advantage of his position to autocratically and unilaterally impose new rules and regulations, without first running them by the teams following the lapse of the governing Concorde Agreement in 2007.

Competitors are also expected to be allocated a greater share of the financial pie and television rights money from Ecclestone's Formula One Management (FOM) company – something for which they have been pushing for quite some time. Though the details have yet to be finalised before they are made public, it is hoped that the resolution will prevent such as Ferrari, Toyota, Renault and Red Bull from following through with their threats to quit over the damaging dispute, ending the renewed menace of a 'breakaway' series that Mosley argues was never a real danger.

“Slowly we're getting to a situation where everyone is going to agree,” the 68-year-old told BBC Sport. “There may be an intermediate year in 2010 – that is still under discussion – and we'll really come down to that figure (£40m) in 2011. Ultimately, it's going to have to be that sort of region.

“Just imagine in today's world, [that] you go out to get sponsorship and you are just an ordinary team, so to raise €45 million is a massive undertaking. Everybody can talk figures – it ought to be this figure or that figure – but if a team cannot raise the money, then there is nothing they can do. Everyone understands that it simply cannot go on at the present level; the money isn't there.

“They (the teams) want to go back to the days of the F1 Commission and the system we had before the Concorde Agreement ran out so they can sit down and discuss all the rules. From our point-of-view it's a very tiresome process, but it does actually work.

“There's genuinely a constructive atmosphere – everyone wants to reach agreement. Quite a lot of progress has been made because we can see solutions now. I don't think there is any fundamental diversity of view. Even those teams who have still got a lot of money at the moment realise that others haven't, and if we want to keep a full grid the costs have to come down.

“I think they all realise that [a breakaway series] isn't practical. We (he and Ecclestone) tried all this in 1980-81 and we had a lot more going for us than they do. You can't really do that – all you do is destroy what you've got – so that's a bargaining position.”

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Engines Rule - Unregistered

May 25, 2009 7:54 PM

I don't claim to know all the politics or budgets or any such nonsense. I am just a couch spectator. Maybe I am of the wrong opinion but I have always understood F1 to be the pinnacle of motorsport with the top cars and drivers in the world. If you can't afford to run a team go to GP2 or A1. F1 is about the best of the best and if being the best means having a massive budget, than so be it. And I'm sorry, as said previously,if I don't know much, but if the people wanting to come in (and there are some expensive manufacturers out there) cannot put their money where their mouth is, then I don't want to see them race.

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