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A breakaway Grand Prix Series? Shades of the CART-IRL split?

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This weekend things seem to have come to a climax in the power struggle between Max Mosley and the FIA and FOTA, an alliance of the major manufacturer F1 teams. On Friday, FOTA announced that they had reached impasse with the FIA and that their group was planning to step away from the FIA Formula One and organize their own Grand Prix series. The next day, Saturday, Mosley announced that he was going to sue the ass off all of them on the grounds that they were breaching ironclad contractual commitments to continue to run in the F1 Series. On Sunday he issued another press release saying that he did not intend to issue the writs on the lawsuit and that he was prepared to talk to the FOTA teams to find common ground. Today the news stories are quoting Mosley as saying that the two sides were “close” to a settlement.

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Mosley may be saying that they are close to agreement but it would be a lot more convincing if both parties were saying the same thing.

I don’t know how this thing is going to work out. I suspect that, unlike the CART-IRL split, we will not see two rival world championship open wheel series next year. But, in the interim, it’s interesting to compare and contrast this situation to the CART-IRL split and to speculate about what a rival breakaway FOTA championship would look like.

First how does this compare to the CART-IRL split?

1. In a way this is more like condiitons that led to the original formation of CART as a group of team owners who formed their own group and racing championship as an alternative to the USAC run series back in 1979. Their claim was that USAC was not doing a good job of running the championship series and looking out for the interests of the team owners and that it was biased towards the Hulman family’s interests, especially the Indy 500. There was a lot of truth in these claims given that USAC was created by the Hulman family to sanction the Indy 500 after the AAA withdrew as the FIA’s representative in the US.
Now, on F1 side, we have a group of team owners who are upset by the one-man rule of Max Mosley and his unilateral imposition of cost-containment rules which they consider to be unfair and they are seriously planning to form their own championship.

2. The IRL was created by a powerful individual, Tony George, who believed that he needed complete control of the championship series to make needed changes – such as lower speeds, more American drivers, and cost reduction – to ensure that there would continue to be full fields at the Hulman family show, the Indy 500.
Now the F1 teams are trying to wrest control out of the hands of a dictatorial Mosley. The other powerful figure in F1 is Bernie Ecclestone, who has long been aligned with Mosley but who may now see that he may need to find some kind of compromise to keep those key teams – including Ferrari – in F1 or it he will find himself in serious financial troubles without the steady revenue stream from the current F1 system.

3. It took a long time, but it was inevitable that in the CART-IRL split, one side or the other would collapse after sponsors pulled their support. At first it looked like the CART series was winning the war but eventually the sponsors withdrew as the CART series lost popular support and the Indy 500 proved to be a strong brand that was able to keep the new IRL afloat (with massive subsidies fromGeorge). However, by the time CART collapsed and was absorbed by the IRL, the whole open wheel scene was much diminished – with a decimated fan and sponsor base. Today it is hard to imagine the now unified IRL series ever regaining the status it held even in the mid-1990s when Tony George was claiming that the CART-based series was failing and needed him to save it.
The experience here should warn that parties to the F1 conflict that they might suffer a similar decline in status if they become engaged in a prolonged battle for supremacy. The bright side of this is that whichever side gets Ferrari (plus Mercedes plus BMW plus Renault plus Toyota) will become the almost instant winner – no rival series can hope to compete with this powerhouse lineup. This view gives the edge to the breakaway group and Ecclestone will have to follow them if hopes to maintain his rich revenue stream under the new order.

Hence, I’m rather inclined to think that some set of compromises will be reached to get everybody out of this conflict.

What needs to be changed to get the FOTA group back on side? Max Mosley’s one-man control replaced by some kind of more broad-based governance with significant input from the participating teams (shades of CART?). Rather than impose an unworkable budget cap on the teams, they need to work on rules that will cut back on the expense of running a race team and let the teams figure out how to implement their own cost-saving measures.

It seems unlikely that the cost over-run problems can be solved unless Ecclestone agrees to settle for a whole lot smaller cut of the smaller revenue pie – the circuits, the teams and the fans need to benefit more from the revenue-generating power of Formula One. This might also require a wholesale renegotiation of the debt load carried by the current television rights holder.

Suppose both sides were to go ahead with plans for a open wheel world championship for 2010, what might we see. You know that the FOTA series would have all the big hitter teams including Ferrari while the other series would be more like a second tier series with little known entry level teams and even lesser-known drivers.

If there are two series, there could be twice as many race venues involved. My list of possible candidates (irrespective of F1 or FOTA) would include all the ones on this year’s calendar PLUS Donington, Brands Hatch, both Hockenheim and the Nürburgring, A-1 Ring in Austria, Zandvoort in Holland, the new Algarve circuit in Portugal, Magny-Cours and Dijon in France, Montreal, Indianapolis, Laguna Seca, Fuji and Suzuka in Japan. It does seem clear that, if the venues are faced with a choice between the pale-shadow-of-its-former-self FIA Formula One series and the new FOTA manufacturer-team-backed Grand Prix series, they will chose the latter, leaving Mosley and the FIA with egg on their faces.
The danger with this F1 split is that the parties might fail to see the extreme danger in the split and will persist in going their separate ways with two rival series until the whole thing collapses like happened with the CART-IRL split. Hopefully, reason will prevail and the besieged Mosley and the FIA will recognize that FOTA holds the trump cards with Ferrari and the other manufacturer teams on their side and they will find a way to respond to FOTA’s demands and keep them inside the FIA Formula One championship series fold.

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