Double points in 2014 and elimination qualifying in 2016 are two damning examples of how Formula One’s governance process can get it badly wrong. These two deeply unpopular changes were rubber-stamped amid howls of protest, only to be quickly rescinded.@DieterRencken explains.
Formula One’s governance process is certainly the most convoluted in the international sporting world and arguably the most dysfunctional. F1’s players conveniently blame oft-incomprehensible decisions taken by a collective of acronyms – TRMs, SRMs, WGs, SGs, F1 Comms and WMSCs – for the sport’s complexities. Yet they fail to acknowledge that complex processes themselves perpetuate complexity.
For vivid proof of this statement look no further than a comparison of 1963’s F1 regulations versus the current (double) book. The regulations covering Jim Clark’s first title-winning season ran to two pages (below) as provided to F1 Fanatic by the Scot’s chief mechanic Cedric Selzer – who not only spannered Clarks’ Lotus 25s, but built them first – whereas current regulations total almost 200 pages!
Indeed: F1’s Technical and Sporting Regulations run to 125 and 70 pages respectively, while regulations governing staff registrations contribute a dozen folios. Add in the International Sporting Code, which governs international competition and administrative processes (78 pages, albeit in FRA/ENG), and the total number is north of 250 pages.
Any wonder, then, that fans’ eyes glaze over as a precursor to grabbing their TV remotes when they hear of rule clarifications and protests and appeals and counter-appeals and international tribunals, particularly when unfathomable decisions are based upon processes taken by unpronounceable acronyms? However, all will be explained.
As the (exceedingly quaint) 1963 regulations prove, it was not always thus; equally, it is fair to state that the situation careered out of control during the recent past – to wit, after the incorporation of the (dysfunctional) Strategy Group into the governance process. For that blame CVC Capital Partners, the previous commercial rights holder (CRH), whose utter greed led them to attempt an IPO of F1 commercial rights on Singapore’s Stock Exchange.
To list successfully, CVC needed long-term headline signings, so hit upon a “brilliant” idea of offering preferential terms to Ferrari, Red Bull Racing, McLaren and Williams, plus (later) Mercedes, with the sweeteners being astronomical bonuses simply for committing to F1 through to end-2020, plus seats on a regulation-making body to be known as F1’s “Strategy Group”. Thus they committed.
The structure of the SG would be said five teams plus the highest placed non-SG team in the previous year’s championship (initially Lotus; recently Force India) – each with one vote – plus the CRH (represented by its subsidiary Formula One Management) and the governing body FIA with six votes each. A simple majority vote (i.e. 10 out of 18) would carry motions to the next level.
The plan was for the SG to replace the long-standing Formula 1 Commission – upon which ALL teams sat, together with FOM/FIA and race promoter/sponsor and technical partner representatives – in its entirety. After the SG the next (and final) step in the regulatory process would be the FIA World Motorsport Council, which has the power to reject or ratify decisions, but not amend them.
Thus a raft of stakeholders – certain teams, promoters and valuable sponsors – was potentially sidelined, with the Big Five teams empowered to frame rules on behalf of an underprivileged minority. Any wonder, then, that Force India and Sauber eventually headed for Brussels, where they filed anti-trust complaints with the EU? This case remains ongoing.
However, even before the matter reached the EU, the FIA recognised the folly of CVC’s proposal, and insisted upon retaining the F1 Comm, as it had (largely operated) under Schedule 9 (the governance process) of the 2010-12 Concorde Agreement.
It is important to note that no Concorde Agreement currently exists (contrary to remarks made by Daimler chairman Dieter Zetsche last year). What does exist is a series of bilateral agreements between individual teams and the CRH which outline their respective obligations (these vary from team to team), plus what is known as the Concorde Implementation Agreement (CIA), signed in July 2013 between the FIA and FOM.
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All bilaterals run through to end-2020, save for that with Renault – which has extension clauses – after being entered into separately in 2016 when the company bought (back) the team then known as Lotus.
However, simply reverting to the former governance process proved impossible. Said Big Five teams had entered into legally binding contracts with CVC on the proviso that they were granted Strategy Group privileges. Hence a compromise: The SG would be the first step in the process, followed by F1 Comm, then WMSC.
In order appease the Big Five, the decision was taken that only motions approved by the SG would progress to the F1 Comm, meaning only proposals approved by the SG could be debated by F1 Comm. Any wonder, then, that agenda items such as cost-cutting and resource restriction discussions – all of which favour independents – invariably stalled at SG level?
Thus, suggestions that all teams are involved in the process are disingenuous at best and downright false at worst – effectively they vote on changes the Big Five (and/or FIA/FOM) permit them to. Thanks to CVC, it is what it is, and F1 needs to live with the consequences of its immediate future having been sacrificed on the altar of greed.
An obvious question is why did the FIA not object to the SG? The answer is because SG membership formed part of a commercial offer to teams and the FIA may not (by EU decree) involve itself in F1’s commercial affairs, having hived off the rights during the Max Mosley era.
That is not to state that the FIA is wholly blameless: As part of the proposed restructure the sport’s governing body benefitted from a one per cent share in the holding entity, eventually worth around £60m –now being used to fund innovation projects. But at least the FIA put the brakes on the structure as envisaged by CVC in cahoots with its CEO of F1 affairs, one Bernard Charles Ecclestone.
What happened to the planned IPO? It was aborted in the face of Ecclestone’s infamous Munich bribery trial – he eventually paid $100m to settle the $40m charges without admitting guilt – although CVC blamed the global meltdown despite the likes of Facebook successfully floating at the time. Thus Liberty was able to acquire F1’s (unlisted) commercial rights in 2017.
Which brings us up to date, for it was exactly a year ago yesterday that Liberty completed the purchase, and Bernie found himself ‘booted upstairs’ as chairman emeritus, a position which effectively carries no duties bar speaking when spoken to by the new owners. One of the first changes wrought by the new owners was to grant observer status at the SG to disenfranchised teams, although they still don’t hold voting rights.
“We feel like voyeurs,” said one team boss. “We sit and watch the others go right ahead and do their ‘things’, but can’t participate.
“Still, its better than nothing, because it means we know who is proposing which motions, and who is in favour of them. Plus, now, of course, they stop denigrating us in the meeting…”
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Thus, for example, during last week’s SG/F1 Commission sessions the independents could look, learn and listen as the Strategy Group debated the question of driver weight, but could not vote on the topic until it reached the F1 Commission a few hours later. Had the SG turned down the motion, it would not have been listed on the F1 Commission agenda.
Farcical, yes, but that’s the way it is – and look no further than F1’s 2016 elimination qualifying debacle for proof of just how dysfunctional the process can be if allowed to run rampant.
In order to understand a system – no matter how flawed – one needs to understand the entire process. F1 rule changes are triggered by numerous factors, usually as a result identified by issues that require remedial action. Such matters are discussed within Technical or Sporting Regulation Meetings (TRM/SRM), usually called ahead of SG/F1 Comms sessions.
The FIA also draws on consultants and advisory groups for proposals – usually driven by shifts in motor industry trends – while FOM recently established a technical department under Managing Director Ross Brawn, who headed Ferrari’s technical department before winning championships with his eponymous team and laying the foundations for the current Mercedes hegemony.
FIA president Jean Todt gave the clearest indication of rules procedure when asked whether he was concerned that FOM was establishing a “shadow” technical group given the FIA’s responsibilities.
“I’m very comfortable with the fact that the FIA is the regulator and legislator of motorsport,” he said. “Liberty Media are doing an excellent job, they are professional people. In the past, what happened, the FIA was working with the teams, using them, working with Ferrari, with McLaren, with Mercedes, with Red Bull, to use them as a kind of laboratory for research, then [these were] implemented.
“We [now] have a strong team, technical, sporting, inside of Liberty Media. Their responsibility is to give us the outcome of their research and then, as regulator, with the governance, we will deal with that. But no way will this group make the regulations on behalf of the FIA, that is very clear.”
The current make-up of the F1 Commission provides for 24 votes (see below); however, given that each official entrant (team) is a member by right, the number would rise to 26 when there are 12 teams, or drop to 22 were two outfits to fold. The make-up itself is interesting, for teams have 10 votes, plus can call on the two race promoters appointed by themselves (the Bahrainis own McLaren and Monza traditionally sticks to Ferrari).
Members of the 2018 Formula One Commission
|President of the F1 Commission and Representative of the Commercial Rights Holder||Chase Carey|
|President of the FIA||Jean Todt|
|F1 Commission’s delegate (Vice President of the F1 Commission)||Maurizio Arrivabene, Scuderia Ferrari|
|Teams’ representatives||Claire Williams, Williams Martini Racing|
|Toto Wolff, Mercedes AMG Petronas Motorsport|
|Vijay Mallya (Rep Robert Fernley), Sahara Force India F1 Team|
|Christian Horner, Aston Martin Red Bull Racing|
|Cyril Abiteboul, Renault Sport F1 Team|
|Frédéric Vasseur, Alfa Romeo Sauber F1 Team|
|Franz Tost, Red Bull Toro Rosso Honda|
|Zak Brown, McLaren F1 Team|
|Guenther Steiner, Haas F1 Team|
|3 Members appointed by the Commercial Right Holder From Promoters of Events In Europe||Nathalie Maillet (Belgium)|
|Ariane Frank-Meulembelt (Hungary)|
|Michel Ferry (Monaco)|
|3 Members appointed by the Commercial Right Holder From Promoters of Events Outside Europe||Sergey Vorobyev (Russia)|
|Al Tareq Al Ameri (Abu Dhabi)|
|John Harnden (Australia)|
|1 Representative of promoters of Events In Europe – Designated By the Teams||Mr Giuseppe Redaelli (Italian Grand Prix – Monza)|
|1 Representative of promoters of Events Outside Europe – Designated By the Teams||Sheikh Salman Bin Isa Al-Khalifa (Bahrain Grand Prix)|
|1 Representative of a supplier of tyres||Mario Isola (Pirelli)|
|1 Representative of a supplier of engines||Toyoharu Tanabe (Honda)|
|2 Representatives of F1 Sponsors – Designated By the Teams||Joël Aeschlimann (Rolex)|
|Riccardo Parino (Philip Morris)|
Add in Philip Morris as Ferrari sponsor and engine representative Honda (although the position rotates if there are only team-owned engine suppliers, as was the case prior to Honda’s re-entry), and the teams theoretically have 14 votes. Then there is Pirelli, which is aligned with the teams (they are clients in that they pay for rubber) and FOM (by virtue of being a “bridge and board sponsor”). Potentially 15 of 17 votes…
Of the eight race promoter representatives, under Liberty two of these are appointed by the teams (one each within/out Europe) and the rest by the CRH (three each). Under CVC the CRH appointed four each – although under the 2010-12 Schedule 9 it was two sets each for teams and CRH. Equally intriguing is FOM’s choice of sponsor representative: Rolex’s Joël Aeschlimann, a former ice hockey professional.
Since last December the WMSC has undergone further change. After Todt was confirmed (unopposed) for a third term his administration has restructured motorsport’s supreme legislative body: retired F1 driver Felipe Massa has become the karting representative (proposed by the Brazilian automobile club), while the Women in Motorsport Commission president (currently rally legend Michèle Mouton) has a seat by right.
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Finally, it is important to note that F1 Commission members have one vote each regardless of status; thus Pirelli has as much input as has Rolex as has Todt as has Ferrari as has the last-placed team in the constructors’ championship, while Ferrari’s F1 Commission representative also serves on the WMSC for F1 (only) matters.
The majority required to make changes – technical or sporting – is 70 per cent (17 with a 24-member council), with a deadline of 30 April for implementation the following season (or beyond), and unanimity if agreed after that date. Thereafter any motions heads to the WMSC.
Members of the World Motor Sport Council
|President Of The Fia||Jean Todt (FRA)|
|Deputy President Of The Fia (Sport)||Graham Stoker (GBR)|
|Vice-Presidents||José Abed (MEX)|
|Mohammed Ben Sulayem (UAE)|
|Carlos Gracia Remohi (ARG)|
|Angelo Sticchi Damiani (ITA)|
|Surinder Thatthi (CIVG)|
|Hermann Tomczyk (DEU)|
|Heping Wan (CHN)|
|Titular Members||Manuel Avino (ESP)|
|Garry Connelly (AUS)|
|François Cornelis (BEL)|
|Dennis Dean (USA)|
|Nicolas Deschaux (FRA)|
|Michel Ferry (MCO)|
|Zrinko Gregurek (HRV)|
|Victor Kiryanov (RUS)|
|Hugo Mersan (PRY)|
|Koichi Murata (JAP)|
|Juhani Pakari (FIN)|
|Gautam Singhania (IND)|
|Vincenzo Spano (VEN)|
|Serkan Yazici (TUR)|
|President Of The Women In Motorsport Commission||Michèle Mouton (FRA)|
|FOM||Chase Carey (USA)|
|President Of The Fia Manufacturers’ Commission or the Ferrari SpA Representative||François Fillon (FRA) / Maurizio Arrivabene (ITA)|
|President Of The Drivers’ Commission||Tom Kristensen (DNK)|
|CIK President||Felipe Massa (BRZ)|
However, the process can be scuppered by Ferrari’s veto should rule changes or proposals not fit their agenda. Ferrari’s veto harks back to the early eighties, when Ecclestone wished to grab control of F1’s commercial rights on behalf of the teams – he acquired these in his own right in 1997 – and realised they needed Ferrari on-side to so do so, so offered the veto as sweetener.
How often has Ferrari resorted to its veto? While Enzo Ferrari was content to keep it in his pocket and Luca di Montezemolo occasionally deployed it as a bargaining chip, F1 Fanatic understands that Sergio Marchionne has been more active in his threats to use the veto.
F1’s governance is in urgent need of restructuring, including the abolition of Ferrari’s veto, to ensure the regulatory process is once more fit for purpose, with an implementation date of 1 January 2021.
That is the biggest challenge facing Liberty, who are believed to be eyeing a ‘constitution’ process rather than a Concorde for the post-2020 period, but that is a story for another day.
Follow Dieter on Twitter: @RacingLines
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