Commentary

FOTA roars to forefront of F1

Updated: March 13, 2009, 5:47 PM ET
By Dan Knutson | Special to ESPN.com

Formula One Teams AssociationAP Photo/Keystone, Martial TrezziniFerrari and FOTA chairman Luca di Montezemolo, left, and Renault's Flavio Briatore meet with the media in Geneva, Switzerland.

Fans are going to get a deeper insight into the fascinating world of Formula One racing, tactics and technology, much of which has always been kept secret.

That is just one of the benefits that will come about thanks to the unprecedented cooperation between the F1 teams and their newly formed Formula One Teams Association (FOTA).

Another major benefit is drastic cost cuts that allow the current teams not only to survive but also to thrive, and which will also make it financially possible for new squads to enter the championship, such as the U.S.-based team U.S. Grand Prix Engineering.

"Historically, F1 has been a collection of secret societies, and we haven't been able to work together sufficiently to share information," McLaren team principal Martin Whitmarsh said. "It's quite interesting how interested fans are in the technology, in the tactics and in the strategy, and that's without us feeding it.

"Other sports [have] enhanced the show by providing more information. Like any sport, if you can feed that information, fans can become more deeply involved, and interested, and intoxicated by it."

How F1 got to this point

The basic interaction between F1's sanctioning body, FIA; F1's commercial rights holding company, Formula One Management (FOM); and FOTA today can be traced back to the late 1970s. That is when Bernie Ecclestone, who owned the Brabham team at the time, started to organize the teams so that they could have collective bargaining power for things such as TV contracts and race-appearance fees. He formed the Formula One Constructors' Association (FOCA).

In the early 1980s FOCA was frequently at odds with FISA, which was the sporting arm of the FIA. The FISA-FOCA war eventually ended with a "peace treaty" called the Concorde Agreement, which stipulated that FOCA would look after the commercial side of F1 while the FIA would run the rules-and-regulations side of things. To this day, the Concorde Agreement remains the blueprint of how F1 is run.

FOCA became less and less a team organization and more the entity representing Ecclestone's commercial interests. It eventually morphed into FOM, which today is the parent company of a series of companies that Ecclestone formed to control most of F1's commercial income.

[+] EnlargeLewis Hamilton
AP Photo/Luca BrunoFan access to drivers such as Lewis Hamilton will get a lot easier thanks to the new Formula One Teams Association.

Over the years Ecclestone has sold off shares, and today, though he still runs FOM, he owns only 5.3 percent of the multibillion-dollar business -- the investment company CVC owns most of the rest of the shares.

For many years, Ecclestone/FOM and the FIA, led by its president, Max Mosley, have controlled and run F1.

The teams had some say in it all, but the Concorde Agreement rules stipulate that in most instances, it takes 100 percent agreement from the teams to make a rule change. And the teams rarely agreed on anything.

This frequently worked in favor of FOM and the FIA, which could use divide-and-conquer tactics among the teams to control the finances and the rules.

"The motto 'United we stand, divided we fall' has been around for many years," said Franz Tost, Scuderia Toro Rosso's team principal, "but F1 team owners took a while to take it on board."

After finally realizing that they would be far better off as a collective unit, and spurred on by the worldwide economic crisis, the teams decided to form the Formula One Teams Association.

They agreed to the basic concept of FOTA in July 2008, and in September it became fully operational. Ferrari president Luca di Montezemolo was elected as chairman and Toyota team president John Howett as vice chairman.

McLaren's Martin Whitmarsh heads FOTA's Sporting Working Group. Ross Brawn, boss of the new Brawn (former Honda) team, chairs the Technical Working Group. And Renault's Flavio Briatore heads up the Commercial Development Working Group.

"I've never seen in so many years such a strong commitment between the teams," di Montezemolo said at a FOTA press conference in Geneva on March 5. "All the teams are pleased and convinced to work together with a very common objective -- promote the development of F1 and give [it] a worldwide image and strong reputation.

"I don't want to use big words, but this is [of] historic importance for F1 -- teams that want to work together but compete on the track. We will work together for the future and work together for F1 and work together for the improvement of the sport. Stability is crucial for us."

FOTA stresses it does not want to be at odds with the FIA and FOM. Rather, FOTA sees itself as one of four triangles that fit into one large triangle, with the FIA, FOM and the fans (in the center of it all) representing the other three triangles.

"I think that every sport needs a strong political authority and regulator because we are not in a circus; we are in a sport with rules and credibility," di Montezemolo said. "We need strong commercial activities, and we need a strong unanimous commitment by the players. This is the triangle we have in mind, and we will give maximum support to everyone in this direction."

Team owner Sir Frank Williams said: "The new FOTA group has the best of intentions in representing the teams' best interests, both technically and commercially. FOTA wishes to enjoy an open and productive relationship with both the FIA and FOM."

McLaren chief Ron Dennis said: "We have no enemies; nobody who is in F1 constitutes for us anything other than a player and a contributor. We are here to make F1 better, and that is our clear intention."

The survey says …

To get an idea of the direction F1 should take, FOTA made surveys in 17 countries where both ardent and casual F1 fans were polled.

"If you're going to grow, then you want to retain what you've got, but you want to find that new audience too," Whitmarsh said. "There's been a lot of work done, and it's been a considered proposal that all the teams have put forward. We obviously wouldn't have done so unless we think that it's a positive thing to do, and we'll see from here how it goes forwards."

FOTA outlined five key findings from its surveys:

1. F1 isn't broken, so beware "over-fixing" it.

"There is a strong desire for F1 to remain meritocratic, while consumer interest is driven most by appreciation of driver skill, overtaking and technology," the FOTA statement said.

"There is no evidence to suggest that grand prix formats need 'tricking up' via, for example, handicapping, sprint races, reversed grids or one-on-one pursuit races. F1 audiences appreciate the traditional gladiatorial, high-tech nature of the sport and would not respond favorably to a perceived 'dumbing down' of the current format."

2. F1 needs to be more consumer-friendly.

"An individual's view or understanding of F1 is framed almost entirely by their local broadcaster," FOTA said. "Unlike most global sports, the vast majority of 'consumption' of F1 is via race day TV coverage, supplemented in part by traditional, non-specialist newspaper coverage. [Therefore,] significant opportunities exist to build audience via other channels such as Internet and mobile [phones]."

3. Major changes to qualifying format are not urgent.

"There may be justification for minor modifications to the current qualifying format, following further trials; however, a major change to the format will not result in a significant increase in audience," FOTA said.

4. Revisions are needed to the points-scoring system.

"As with qualifying, all audiences want a meritocratic points-scoring system," said FOTA. "This means that they want winning grands prix to count for more than it does currently. There is an indication that all audiences would like to see a greater points reward for winning grands prix."

5. Consider the evolution of pit stops and refueling.

FOTA said: "All audiences view pit stops as integral to their enjoyment of grand prix coverage; however, they rank the most important and compelling aspect of pit stops as tire changing rather than refueling. Race strategies were not highly ranked as a determinant of interest in F1. Implication: audiences are unlikely to diminish if refueling is discontinued. Tire changing is an important driver of audience interest [in pit stops] and should not be further automated."

FOTA's proposals

In addition to the surveys, the teams held a number of meetings to develop what FOTA calls "the road map for the future of Formula One."

At the moment that road map goes only as far as 2010. But the priority was to get immediate changes agreed on for the next two years.

"The initial objective was to address the issue of costs," Dennis said. "We want to communicate to everybody that we are about going forward, taking this very difficult crisis as an opportunity and a challenge, and making F1 better for everybody."

The gist of FOTA's proposals to improve the show and drastically cut costs was posted earlier on ESPN.com. The full list of the plans -- covering technical, sporting and commercial aspects -- is as follows.

Technical

2009
• More than 100 percent increase in mileage per engine with a limit of eight engines per driver per season.
• Reduction in wind tunnel and CFD (computational fluid dynamics) usage.
• Engine lease packages available at $10 million per team per season.

2010
• Engine-lease packages available at $6.3 million per team per season.
• Gearbox available at $1.9 million per team per season.
• Standardized KERS put out to tender, with a target price of $1.3 million to $2.6 million per team per season.
• Target a further 50 percent reduction of the 2009 aerodynamic development spending.
• Specified number of chassis, bodywork and aerodynamic development iterations during the season.
• Prohibition of a wide range of exotic, metallic and composite materials.
• Standardized telemetry and radio systems.

Sporting

2009
• Testing reduced by 50 percent.
• New points-scoring system (12-9-7-5-4-3-2-1) to give greater differentiation/reward to grand prix winners, replacing the current 10-8-6-5-4-3-2-1 payout.
• Race-starting fuel loads, tire specifications and refueling data to be made public.

2010
• Commitment to recommend new qualifying format.
• Radical new points-scoring opportunities (e.g. one constructors' championship point to be awarded for the fastest race pit stop.)
• Further testing reductions (four four-day single-car preseason tests plus one single-car preseason shakedown.)
• Reduction of grand prix duration from 190 miles to 155 miles or a maximum of 1 hour 40 minutes, pending the approval of the commercial rights holder.

Commercial

2009
• Increased data provision for media.
• Explore means by which the presentation of F1 action can be more informatively and dynamically presented, common to other sports such as tennis, to dramatically improve engagement with the public.
• Nominated senior team spokesman available for TV during grand prix.
• Commitment to enhance consumer experience via team and FOTA Web sites.
• Mandatory driver autograph sessions during grand prix weekends.

2010
• Commitment to enhance consumer experience via TV coverage.

FIA has final say

As the ruling body, the FIA has the final say on any sporting and technical rule changes. Frequently in the past, when the teams could not unanimously agree, the FIA mandated rule changes that did not please all the teams.

Now, however, FOTA is confident that the FIA will embrace its proposals because they have been unanimously presented in a well-thought-out and concrete manner. This is especially true when it comes to major cost cuts, which is something FIA president Mosley has been demanding for several years.

"The FIA and FOTA are pursuing the same aims -- to increase the sporting value of F1 and to cut the expenditure required to do so," BMW Motorsport director Dr. Mario Theissen said. "Reducing costs is definitely the way to go. The members of FOTA have made great efforts to this."

The FIA was set to unveil its cost-cutting plans March 17.

Splitting the commercial pie

The teams receive 50 percent of the commercial income generated by F1, with the majority coming from TV rights, race-sanctioning fees, and track hospitality and advertising fees. This is paid to the teams in the form of points, prize money and travel money. Ecclestone, FOM and CVC take the other 50 percent.

Formula Money magazine, which tracks F1's commercial matters, estimates that the teams received a total of $500 million in 2008. The money is divided up depending on where the teams finished in the championship, with the title-winning team getting about twice as much as the team that finished 10th.

It sounds like a lot of money until you consider that up until now, some of the top team's budgets were in the region of $1 million per day.

The current contract the teams have with Ecclestone and FOM stipulates the 50 percent split runs through 2012. Ecclestone has said he has no intention of negotiating any changes before then.

However, besides cutting costs, FOTA believes its efforts will increase F1's overall income. The bigger the pot, the larger the teams' 50 percent share of that pot will be.

"We can increase the share the amount of revenue if we improve some activities," di Montezemolo said. "One of which we strongly believe is the new media."

Renault team boss Briatore says the teams' business model should be to make money rather than trying to spend more than they have.

"It is the same if you sell apples or T-shirts," he said. "F1 needs to be a center of profit, not a center of costs. Only if you make your company a profit, and it doesn't matter what company you have, will you stay in the market. Then you will survive forever.

"It is very difficult to survive if your goal is to lose money."

Harmony in numbers?

It's all peace and harmony within FOTA at the moment. But will we see repeats of past disputes between the teams?

"There will be many challenges ahead of us," Whitmarsh said. "I don't think we can say that there will never be dispute or argument in F1 again. I think that would be a naïve thing to assume.

"But I think we've got a much better environment in which we can manage those issues as and when they arrive. If you look at what the manufacturers and teams have done with those cost savings, those are helping the independent teams, unquestionably.

"That's been a massive, massive compromise. Ferrari, ourselves, BMW, Toyota have made huge compromises in the interests of the sport, and I think that's fantastic for F1 and fantastic for the fans."

Looking ahead

Part of the fascination of F1 revolves around its technology. Yet only a privileged few ever really got to see the results as the team's quest for secrecy surpassed paranoia levels.

It was a case of: "F1 has this really cool technology, but we can't reveal anything about it to you."

FOTA's willingness to give the fans more insight into F1's technology is a big step forward.

So, too, are FOTA's decisions to give fans better access with things such as the mandatory autograph sessions, making the team's radio communications available, and enhanced TV coverage.

Cutting costs is a no-brainer. And that was the case long before the current global recession. It should not take $300 million and 800 employees to field two cars in 18 races.

Can FOTA do more? Of course, but it certainly has charted a course in the right direction.

Dan Knutson covers Formula One for National Speed Sport News and ESPN.com.

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