Jean Todt, Bernie Ecclestone, Interlagos, 2015

Todt wins, Ecclestone loses – but is F1’s future secure?

2016 F1 season

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Early in Jean Todt’s presidency, when the new power unit rules for 2014 were being formulated, Bernie Ecclestone described himself as being “at loggerheads” with the FIA chief over the planned changes.

As head of motor racing’s governing body, Todt’s quiet approach with a preference for consensus contrasts sharply with the vociferous, reactive Ecclestone. This made it something of a surprise when the pair united in an attempt to force further changes to the engine regulations at the end of last year.

But only one of them got what he really wanted.

Ecclestone was criticised for his repeated slating of the new engine formula when it was introduced two years ago. But his angry rhetoric about the power units started three years before that. Cost, technology, noise – there was no aspect of the rules change he didn’t perceive to be bad for Formula One. That didn’t change even after he welcomed back Honda who credited their return to the new hybrid formula.

And when Red Bull found themselves struggling with Renault’s second-generation power unit, Ecclestone became their loudest cheerleader, echoing team principal Christian Horner’s complaints about the V6 hybrid turbos and endorsing his demand that Mercedes or Ferrari should sell them a competitive power unit.

For Todt the new engine rules represents his most significant contribution to Formula One since he became president seven years ago. It was a vital change which not only helped bring Honda back, but potentially kept other manufacturers from leaving.

However there was no ignoring the huge cost hike the new engines presented to F1’s smallest teams at a time when they were feeling the pinch from Ecclestone’s prize money distribution structure which favoured the biggest teams. At the end of 2014 Caterham went to the wall and it seemed Marussia would follow them. Throughout 2015 it was clear Lotus’s survival depended on Renault buying the team, while other outfits had to take payment advances from Ecclestone.

Jean Todt, Formula E, Beijing, 2014
Formula E is one of Todt’s priorities outside F1
Todt had been accused by some of being asleep at the switch. His predecessor Max Mosley’s presidency was marked by a string of hostile public conflicts with F1 teams over the rules.

In contrast Todt has focused on other priorities such as the World Endurance Championship and World Rally Championship – both disciplines where he enjoyed success as a competitor – and innovative all-electric championship Formula E. Above all is his road safety agenda, which he sees as a way of giving something back to motoring after his decades in competition.

But when Todt and Ecclestone’s agendas aligned a showdown was set with the manufacturers over engine prices. Todt suggested a limit of €12 million for engines, a level Ferrari president Sergio Marchionne called “obscene” and led the team to use its controversial veto power to thwart an engine price cap.

This cannot have come to a surprise to Todt, having once wielded the same power himself when he was in charge at Maranello. Speaking to journalists in Mexico he indicated he was prepared to offer stability in the engine regulations until 2020 to secure the price cut, allowing the manufacturers to make savings by spreading their costs over more years.

The alternative was the introduction of a less expensive 2.2-litre V6 engine for those who wished to use it from 2017. This fit with Ecclestone’s repeatedly-stated wish to go back to an earlier engine formula: the V8s or even V10s which manufacturers had already turned their back on. But the alternative engine plan was shot down by the F1 Commission in November.

The year ended with the manufacturers facing a mid-January deadline to propose a means of containing engine costs. The eventual deal – for a price limit of €12 million, stability in the engine regulations from 2018 to 2020 and guarantees on the availability of power units for customer teams – was clearly satisfactory for Todt. They are still considerably more expensive than the V8s – by an inflation-adjusted 28% – but these are vastly more sophisticated pieces of equipment and they will be sold for around 40% less than the current prices.

This is a victory for Todt. But it goes no way towards meeting Ecclestone’s goals of more powerful, noisier, thirstier engines and – above all – competitive power units for Red Bull. Shortly before the alternative engine plan was killed Ecclestone revealed the latter was the true motivation behind his alliance with Todt: “If they were to have given an engine to Red Bull none of these things would have come up.”

Daniil Kvyat, Red Bull, Paul Ricard, 2016
Red Bull are using TAG-Heuer branded Renault power units
Red Bull had found themselves at risk of not having an engine at all for 2016 as they had begun to sever ties with Renault before securing a new deal with one of their rivals. After months of public wrangling a deal for 2016 between the two was resurrected, though Red Bull will rebrand the Renault engines as TAG-Heuer.

But despite the manufacturers’ assurances to the contrary, ensuring a secure supply of engines for customer teams in the future will remain a concern for F1. It was this very problem which hastened the demise of the last turbo era 30 years ago as Renault, Ford, BMW and Alfa-Romeo scrapped their F1 programmes in quick succession, leading to the unpopular one-off ‘two-class’ F1 of 1987.

During the brief window in which the FIA’s alternative engine proposal was on the table responses from Mecachrome, Ilmor and AER demonstrated a clear appetite from independent engine builders to get involved in F1. F1 should find a way to accommodate them in future to protect the sport from the whims of manufacturers who see it chiefly as a branding exercise and – in Ferrari’s case – a revenue stream.

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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  • 36 comments on “Todt wins, Ecclestone loses – but is F1’s future secure?”

    1. The problem with F1 isn’t the quiet PUs, or the DRS, or the tyres, or the number of overtakes, or the runoff areas, or the race weekend format, or ….

      It’s the money, plain and simple. Or, more specifically, wealth distribution.

      If everyone’s playing on a relatively level playing field, you’d never have a dominant team. You’d still have “great” teams who are almost always at the sharp end, but everyone else would have a chance of decent points every race weekend. There needs to be a little technical freedom in there too, but I think 2017’s changes to aero might just bring that.

      The problem is, given the historical prize money situation, you need to burn a load of cash to get in the door and turn up in your first season. You then need to spend a load more money reaching/keeping up with the competition to try and score points. Once you’ve got some points, you start getting some money out of the sport itself.

      Ok we’ve not seen performance on track yet, but if Haas can run a team for around $120m buying in all the necessary bits, I reckon it’ll raise a few eyebrows from other competitors. If they score sufficient points to place 10th, the following season becomes less of a drain on Mr Haas’ bank account/marketing budget.

      The teams are also limited in the promotional things they can do, as FOM owns all. That needs changing too. The biggest brands/companies in the world right now are ones who make money from the internet. F1 needs to wise up and let its big brands do the same.

      I’m really intrigued to see what the EU do with the complaint made by Sauber et al. What the sport really needs, now there is some form of stability in the biggest cost – the PUs – is some properly organised and fair funding. That doesn’t mean throwing away the historical payment model, just make it so a team arriving in Year 1 is still around in Year 2, 3, 4 etc because they’ve not just burned through their investment money …..

      1. The problem is indeed money at first sight. However, these things as DRS, Engines, KERS and ERS, no refueling and bad tyres, ALL cause 1 problem, unpropre racing. With that being gone, fans will likely to be interested in F1. Fans don’t want to pay these high prices anymore. Less fans=less money, less money=not such a good bussiness, less money=means also less drivers to be taken in as F1 is in a crisis of money. Think about all the money they could make by giving fans years like 1990-2008. And with the ticketprices being so high, almost no one wants to attend a gp. Compare the amount of fans from the WEC that attend to Le Mans, to the amount of fans of F1. You could say that FIA made these problems themselves.

    2. If Haas run the time for $120 million, buying in all necessary bits… …then they have the 7th-highest budget of the F1 teams (Mercedes has about 4 times that, Red Bull and Ferrari 3 times that, Renault and McLaren 2 1/2 times that and Williams a little bit more). So once the initial few years of building up resources and staffing is complete, they’d theoretically expect to beat Force India and Toro Rosso – let alone Sauber and Manor – simply through financial firepower. In 2018, assuming Haas straightforwardly adds the value of 10th place to the budget instead of doing some sort of partial substitution, it will have $160 million and therefore more budget than Williams (but still less than the manufacturer teams and Red Bull).

      Those huge gaps between the teams at the front, and how the back half of the grid is basically all sitting at the minimum level of funding to survive in F1 (or below!) illustrates how F1 has in many respects become a spending contest.

      1. What is the solution? A budget cap is near impossible to police, team sports across the globe are influenced by money amongst many other things, although in theory financial parity is a great notion it is a utopia that will never exist.

        1. Even if a budget cap was enforceable (and I agree with you, @markp, that it is not enforceable for a series whose teams use widely different accounting protocols and are mostly EU-based), it wouldn’t necessarily solve the problem of large gaps between amounts of money teams have. A more promising pair of solutions is to design the technical regulations so there are multiple ways to be successful (as opposed to mono-channel incrementalism, which is the very expensive system that currently exists) and to swap the fixed CCB payments (which are now nearly half of the television income to teams!) out for performance-based income that allows all teams to get something, and most to get an amount that can be bridged with the sort of sponsor arrangments that are possible these days (i.e. less than last decade). A rule limiting the amount of debt a team is allowed to carry in its own name wouldn’t hurt either – Mercedes had more debt last year than several teams had in their entire expenditure (including debt and its servicing) – though implementing that is only a little easier than implementing a full budget cap.

          Then teams can still bring different amounts of money to the table, but the teams with less money would have a chance of bridging the gap using a mixture of creativity and less unequal rewards for their efforts (while still giving more reward to the more successful – a component which, to my mind, should remain to some extent). The problem with that being that such a scheme could not realistically be implemented before 2020 due to the amount of expenditure that has been amortised across the assumption of multi-season regulation stability already.

          1. Those are good points, but with so many shell companies all over the world, contractors, sub contractors, and accounting methods, policing that would be a nightmare with near constant allegations of cheating. I think you have to use the system they’re playing in against them.

            Start by splitting up the season into thirds: Asia, Europe, Americas. All this really does is organize the races so that races in Asia are in the first third of the season (April – June), which will have the added benefit of reducing travel costs. Within each third of the season, the first third is for engine developments, the next third is for aero, and the final third is for chassis. So for the Asia season, it might look like this: Melbourne, Malaysia, Singapore, China, Japan, Sochi, Bahrain, Abu Dhabi. In the month of April, teams can bring any engine upgrades they want (do away with the complex and confusing token system, its not having its intended impact anyway). In May, as many aero upgrades as they want. In June, as many chassis upgrades as they want. Initially, you might think costs would sky rocket, but given that there are only 24 hours in a day, limits on CFD and wind tunnel use, and it takes time to design, test, and manufacture these parts and fly them out to races (not to mention pass FIA crash tests), teams will naturally be limited by the only commodity they cant control: time. Furthermore, if Mercedes wants to burn through $100million in those three months on upgrades, good luck getting the board to approve, because they know Ferrari, McLaren, and Red Bull can beat them playing that game too, so they might not get their return on investment (anathema to any board member). You use fact that all of these companies now have boards that are obsessed with returns against them.
            On top of this, the season will be much more competitive. Teams can develop themselves out of holes (unlike Honda last year), explore new directions and concepts as its the same for every team. But this alone wont do the trick.

            Once thats done, you set up the constructors bonus to reward teams more equally. The NBA is a great example of this, and as a result, small market teams like San Antonio, Toronto, Oklahoma City have been able to compete with and beat the behemoths that are LA, NYC, Miami. If you reward success properly, then teams like Williams and Force India which arguably got the most points for their buck will prosper. Other teams will see this and follow suit. You’ll always have a few teams that spend more than others, and some that spend less, but like the NBA, once the rewards system is more fair, itll promote far more equality. If you reward pure success (not based on stupid historic constructor status) then the teams that can do it the most efficiently (see Apple) will set the benchmark for everyone else. Itll become its own self policing system. Tweaks and adjustments will be required from time to time, but on its own it should be sustainable.

      2. Some slightly different information from Autosport
        http://cdn.images.autosport.com/editorial/1448531309.jpg
        (points by 2015 Brazilian GP)

        1. I think that is in pounds – so Haas would probably be at around £75-85m. That matches with what’s reported as their budget, falling between Sauber and Manor, the second least on the grid.

      3. Nice stats but what does this have to do with anything?

        These engines suck. /discussion

        1. I’m questioning what your comment has to do with anything.

          @alianora-la-canta ‘s stats are entirely relevant for trying to see how competitive this new team is going to be in Formula One, and if it will make a difference, and who it will ultimately compete with. It’s just a very interesting comment.

        2. These engines suck.

          They also squeeze, bang and blow…

          These engines are pushing their levels of efficiency to ludicrous levels never seen in internal combustion engines before– claims of 40 to 45% efficiency are being thrown around (it used to be 35% was an amazing level of efficiency for ICE’s). The cars are significantly heavier than the V8 era, but the cars are only marginally slower, while using two thirds of the fuel.

          Your definition of “suck” is “Waaah, I can’t destroy my hearing as quickly anymore!!”… which kind of leads to the question, if F1 fans hadn’t destroyed their hearing with the V10 and V8 engines, would they think more of the V6 engines?

          Or do F1 fans just enjoy whining?

    3. @keithcollantine I’ve been wondering for a while, but what became of the series of articles asking us to rate Jean Todt’s efforts as FIA President? It feels like a long time since we had one and the ratings and comments from the last twelve months in particular would make for pretty interesting debate.

    4. Ecclestone won… That man is not that cryptic but he’s slowly getting his way again. I hope he’ll rule F1 unopposed.

    5. @keithcollantine Excellent article – says me who is quick to criticise anything almost immediately.

      In fact, I still have a remark here: I think Ecclestone actually won too. No, he didn’t get the alternative engine or “thirstier” engines, but he did get assurance on Red Bull’s engine supply (it’s not a very strong assurance as you rightly pointed it out, but then again neither is Red Bull’s threat to leave, IMO), he did get louder engines (or that’s what I’ve heard), and he even got lower prices for the independents without changing the FOM money distribution.

      But otherwise nicely put emphasis and mostly meaningfully connected dots, from Jean Todt’s viewpoint in particular.

      1. Agree wholeheartedly, fantastic analysis @keithcollantine

      2. ‘Meaningfully connected dots’?

        Eccelstone’s goals “ABOVE ALL” were to get competitive power units for Red Bull?

        Enjoy the kool-aid.

        1. I’m sorry but the deal doesn’t make for a guarantee of a competitive PU just a PU as the manufacturers are allowed to supply a previously homologated model under this deal, so if my understanding is right, technically Ferrari could offer to supply Red Bull with a 2014 model and it would be Red Bull’s choice to take it or leave.

      3. I tend to get the impression Bernie’s style of negotiation is to take an extremely aggressive or totally shocking way-out initial stance.

        For instance if you where selling your car for 100K he would point out one hundred defects, offer you 20K and make it sound like he is doing you a favor. By the time you reach an agreement he has got you down to 70K – now he would never have got you to 70K if that was his initial offer.

        This is type of games he plays with F1, he does not propose what he actually wants but something much more left field and in the end I think he gets pretty much what he wanted.

    6. Hmmm. Interesting article, it seems to me that F1 has been pulled out of shape by the Renault – Red Bull problem. First of all, Renault seemed to be one of the main proponents of the V6 engines and the FIA bent their will to ensure Renault’s continued participation. But then when the Renault PU’s were shown to be deficient, Red Bull’s demands for a current-specification engine from one of the top two producers produced another twist in reality towards the idea of low/fixed-price PU that wasn’t from one of the major manufacturers. But that was shown not to be financially viable or available within a an acceptable time period.
      While Bernie seems to have been sanguine to see some teams cease racing, he appears to have been most energetic to ensure Red Bull remain competitive. I wonder if he still wants Horner to succeed him.

    7. I hate agreeing with Bernie but he’s been 100% correct about these “power units”. This is the worst era of F1 i’ve witnessed in 40 years of fanatical devotion to the sport. The engines are lame, the regulations are worse, and it doesn’t improve the sport or keep costs down.

      Experiment failed.

      1. My grandfather doesn’t use a computer, it’s not computers that are useless.

      2. @apexA, I disagree, these engines are brilliant, more power, more torque, more reliable and more economical, the big spoiler in F1 is high-deg tyres that prevent the drivers from utilising all that torque. You could bring back the V10s but nothing would be better if you kept these tyres. Experiment failed.

        1. cocaine-mackeine
          28th January 2016, 22:41

          @hohum This engines great? Come on! Yes they have more power but they are totally unreliable and uneconomical (I think it is spelled like that). I think that every F1 weekend that has passed since their introduction in 2014, 2 or more cars had a glitch or mechanical failure thanks to this engines. The tyres can be changed anytime soon, the only season where the tyres were excessively lame and high-deg was in 2013. Pirelli can make good tyres if they are allowed to. I´m more worried on the design and aero of the cars in order to have good racing than on the tyres.

          1. You think these engines are unreliable then look at the 90s and 2000s engines see how many times those engines failed. These are vastly superior engines with fantastic technology and very good reliability to run 19 races on 4 engines with almost no testing. The problems are the tyres, high downforce especially the rear wing and the overly complicated front wings. And most importantly the payments. If it was fair you could see Sauber, Force India and even Williams upgrade the aero better through the year to keep the racing alive.

    8. The communication chasm between F1’s administration and it’s fans is just a disaster that will eventually happen. Very little (and also not their primary job) the players (teams, drivers, media, etc.) can do about it.

    9. Whether Ecclestone has lost or not will, in my opinion, ultimately be decided by the result of the EU investigation, if it goes ahead. If Bernie loses that then his entire financial structure of Formula One could risk falling apart before him.

      1. At this rate of knots, the entire financial structure risks collapse regardless of the EU, simply because of the amount and rate at which FOM income is falling. There’s a trigger point ($750 m) at which Ferrari, McLaren and Red Bull get the right to walk away and be paid by FOM for it (because FOM would be deemed as breaching its contract with them to guarantee a certain level of income for the sport in general and themselves in particular). I could see Red Bull pulling out even if Ferrari and McLaren stayed – and any of those three teams would be entitled to renegotiate a completely different contract, better suited to them, if they decided the current contract wasn’t enough to keep them in F1. The very idea of any of that happening would likely be enough to upend Ecclestone if CVC sensed a risk of Red Bull walking out on them due to falling income (since this, unlike pretty much any other reason, would likely be blamed on CVC directly).

    10. I read through the article “Rise and fall of turbo” which was linked with this article. Very engaging and elaborate history. But isn’t it being repeated now. One team took the lead in bringing them into the sport. (Renault started very early in their turbo program in 1977. Renault once again wanted the turbo-rules desperately for 2014). The team that nailed the formula correctly absolutely dominated the championship (Porsche in 1984, Honda in 1987-88; Mercedes in 2014-15). Several manufacturers were attracted to the new formula and some came in but struggled (Alfa Romeo, Ford back back then; may be Honda this time, Alfa Romeo and Volkswagen probably gave it some serious thought as well but decided not to go this time around). And once it was clear to the manufacturers that only one gets all the wins and the favorable press coverage, the non-winners quickly exited the sport.

      Looking at the timelines, 2016 is probably similar to 1982 or 1983 in terms of how it is able to attract manufacturers. Last time around; the rules were changed for 1989; 6 years after 1983. So, if history repeats itself (as it seems so far); we can expect the new rules to be introduced 5-6 years later i.e. 2021 or 2022. Just in time for when the rules change after 2020!

      1. Interesting analysis.

        I don’t think we’ll see the different PU’s converge performance-wise so a rule change in 2021 is almost unavoidable.

    11. If Bernie won and we got 2.2 litre 1000hp engines from Cosworth, Hart and Ilmor, what would we have ? Indycar+ or Formula Aero maybe, but nothing would really change if the tyres were incapable of effectively using the available power . Why would the manufacturers want to be involved and what guarantee is there that Cosworth, Hart and Ilmor would survive by supplying a dozen engines a year cheaply to F1 teams.

    12. Formula E, this a very bad conception.

    13. But it goes no way towards meeting Ecclestone’s goals of more powerful

      @keithcollantine I doubt the engines are going to be less powerful…….

    14. Forget engines. Forget tyres. Forget aerodynamics.
      The way to create even racing is to have even distribution of funds (as has been mentioned many times).
      All parties approximately equally funded from the rights sales, etc. will eventually create much more even racing (those teams with good / innovative marketing can reap their benefits). It won’t matter how much the engines cost, if all parties can / can’t afford them.
      The current engines are hugely technically involved, powerful and efficient by comparison with those of the past.
      All of Bernie’s posturing and outrageous comments are designed to deflect attention from his and CVC’s greedy trousering of as much as possible.
      Divided teams fighting and arguing with each other only serves this purpose.
      Media focus on this, only serves this purpose.

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