F1 faces summer of discontent

Formula One may face a prolonged crisis over budgets and regulations before a dramatic endgame decides if Ferrari, and the sport's other disenchanted major manufacturers, rejoin for 2010.

Facing the prospect of losing Renault, Red Bull, Toro Rosso, Toyota and Ferrari, because they refuse to accept budget caps proposed by the International Motoring Federation (FIA), F1 has arrived at another crossroads. Essentially, it relates directly to the teams' and governing body's shared desire to reduce the costs of participating in Formula One in the teeth of a global recession.

The FIA has laid out proposals for 2010 that include a budget cap of 40 million pounds, a figure that excludes the cost of engines, drivers' salaries, hospitality and marketing. Initially, they proposed this as a voluntary cap: those teams that agreed to the cap, and stayed beneath it, would be rewarded by having greater technical freedom, within the regulations. Those that opted out could spend more, but had no technical freedom and would have had to adhere to much tighter rules.

In other words, the initial proposal created a two-tier championship series with the big-budget, manufacturer-owned teams on one level and the smaller-budget, independent teams on another.

Indeed, it was by unifying the majority of the teams into the Formula One Constructors' Association (FOCA), and then heading it, that the sport's power-broker and commercial rights holder, Bernie Ecclestone, came to power. He then 'won' the infamous 'FISA-FOCA war' with the creation of the Concorde Agreement in 1981.

The FISA (International Motor Sports Federation) was then the ruling body, led by Frenchman Jean-Marie Balestre, but his authority was challenged by FOCA's desire for improved commercial management and rewards for the teams. Balestre was finally undermined by Ecclestone's agreement with the influential Enzo Ferrari. In effect, Ferrari's decision to settle with Ecclestone created the modern fabric of F1 that has stood ever since.

Although FISA has become the FIA and FOCA has now become the Formula One Teams Association (FOTA), the great divide between the teams and the governing body remains.

Ecclestone, once owner of the Brabham outfit, has moved out of the teams' orbit of influence and, by virtue of running his own hugely-influential commercial management company, become a central third party-with a long-term contract with the FIA to exploit the commercial rights of the sport. His former legal adviser, lawyer Max Mosley, once also a team owner at March, is now president of the FIA.

Ferrari remains reluctant to lose its position of power and influence as unofficial consultants to the regulations.

During the most recent outburst of hostilities between the teams and the ruling body, in 2005, when a breakaway series was threatened, Ferrari was a key influence and, when persuaded to re-sign with F1, did so after reportedly being promised a consultative role on all technical matters.

This special relationship also explains why Ferrari were so aghast at the FIA's proposals for budget-capping, without any consultation, that they filed an injunction to block the proposals with a French court. This move, taken after Ferrari had confirmed that it would join Renault, Toyota, Red Bull and Toro Rosso in refusing to lodge their entries for F1 in 2010 before the 29 May deadline demonstrated the strength of their anger.

It also opened the way for new teams to take up their places in 2010, if Mosley and the FIA refuse to compromise any further.

"I'd be very reluctant to increase the budget cap above 40 million pounds because I think that would discourage new teams," said Mosley. "Everybody wants to race under the same regulations, but we do need to get the costs down. The teams all agree on that. It's a question of how much and how. I think that we will probably get anywhere between three and six teams by the deadline. Then, after that, they become a late entry and if there is a space they can take it -- and if there isn't space they cannot. If teams don't enter the F1 world championship, they are going to have to decide pretty quickly what they do - start their own series, race in some other series or pack it in."