Are the Wheels Coming Off of Formula One?

Are the Wheels Coming Off of Formula One?

Formula One racing is a bit like evolution governed by an appeals committee: Winning races has long been relied on engineering innovations that give a race car that extra microsecond advantage, while the teams left in the dust cry foul and demand that the sport’s governing body, the Federation Internationale de l’Automobile , rule those innovations out. FIA supremo Max Mosley had hoped to tamp down what he calls the sport’s “financial arms race” by imposing a $66 billion annual spending cap on teams, but instead he appears to have provoked a walkout that could see some of the sport’s major names, such as Ferrari and McLaren, create a rival championship with fewer restrictions — and take the sport’s lucrative TV audience with them.

The cap proposed by Mosley would be voluntary, but far more extensive technical restrictions would be placed on teams that declined to sign up, making it harder for them to stay competitive. Some of the top teams currently spend three or four times Mosley’s proposed limit on R&D in search of that evolutionary advantage.

But Formula One’s top teams are having none of it. On Thursday, the F1 Teams Association announced that eight of its biggest teams including Ferrari, McLaren, Renault, Toyota, BMW Sauber and current competition leaders Brawn GP, plan to set up a rival championship for the 2010 season. They say the rule changes proposed by Mosley will create an unsatisfying two-tier competition by setting different engineering rules for teams that accept the cap and those that don’t, and that the spending cap would hinder innovation. A series of recent changes in the rules governing design have also annoyed the teams, who complain that the constant changes to regulations makes it harder to design new cars and engines.

“The FOTA teams endeavored to the very end to reach an agreement, but regrettably the FIA refused to back down from its rigid position, insisting that the teams must first sign up before there could be further negotiations on the rules,” BMW Motorsport Director Mario Theissen said in a statement. “This was unacceptable to us.”

The new competition, Theissen explained will pit “the best drivers and the best teams … against each other. This will take place within a stable set of regulations and a transparent management structure. We will also take into account the wishes of the fans, who have lent us a great deal of support particularly in recent weeks.”

Tensions between sports teams and those that administer their leagues is hardly unique to Formula One. In the U.S., the National Basketball Association and the National Football League have clashed with team owners over how to divide the profits from selling the TV rights to their games. The same issue regularly pops up in English Premier League soccer. “There is a continual, not always disastrous, dialogue about the share of the commercial rewards of sporting events,” notes Chris Aylett, chief executive of Britain’s Motorsport Industry Association. “What’s more important The Super Bowl or the teams playing in it In that sense, F1 has had that dialogue going for a while.”

And the teams have a natural advantage, because it is their colors and players — rather than the competitions in which they play — that hold the allegiance of the fans. Formula One could survive the loss of one or two teams, but if it loses all its big teams and marquee name drivers, carrying on would be tough. “A team has a fan, a series doesn’t,” says Aylett, who believes that a compromise can still be reached. “There is a loyalty to a team and to drivers.”

Formula One’s governing body plans to take legal action to prevent the teams from forming their own series. “The actions of FOTA as a whole, and Ferrari in particular, amount to serious violations of law including willful interference with contractual relations, direct breaches of Ferrari’s legal obligations and a grave violation of competition law,” an FIA statement read. As the two sides dig in, the biggest loser is the sport. If Formula One does end up splitting, says Aylett, “people might go watch rugby.”
Read: “Formula One: Cutting Corners.”
See pictures of the history of Formula One.