/ 1 February 2005

Split could be ‘fatal’ for formula one

Formula-one (F1) chief executive Bernie Ecclestone had his moment last month, persuading Ferrari to break from the other nine teams and sign a long-term deal to stay with his series.

By getting Ferrari to commit until 2012, Ecclestone hopes to head off an aggressive bid from rival GPWC. GPWC wants to run F1 and oust Ecclestone — or set up a rival series — beginning in 2008.

”The Ferrari exit was definitely a loss,” GPWC spokesperson Xander Heijnen acknowledged. ”No need denying that. It was a surprise and a major blow.”

Ferrari was one of the founding members of Grand Prix World Championship — a holding company that still includes three major carmakers in F1 BMW, Mercedes and Renault.

GPWC gets its shot later this month at a meeting with the nine other teams. A date has not been set.

GPWC will be offering financial details, and says it will top Ecclestone’s offer.

Ecclestone is reportedly ready to pay the teams $3-billion in the five years of the new Concorde Agreement, which would run from 2008 to 2012. That would be about three times more than the teams received in recent seasons.

The Concorde Agreement is between F1 teams, Ecclestone and the FIA world governing body and spells out how money is divided, and how F1 is governed.

”Losing Ferrari out of the GPWC and losing Ford last year, one has to ask how many more knocks GPWC can take,” said Paul Stoddart, owner of the Minardi F1 team and spokesperson for the so-called ”Group of Nine.”

”Having said that, the GPWC have some awfully good ideas. I wouldn’t write off the GPWC.”

By signing with Ecclestone, Ferrari has galvanised the other nine teams. The signing also drew Japanese manufacturers Toyota and Honda openly into F1 politics. Toyota is the world’s number two car builder.

Apparently angered by Ferrari, the two joined BMW, Mercedes and Renault last week and issued a statement calling for more money for teams and sponsors, financial transparency and long-term stability.

Toyota and Honda have not officially joined GPWC.

The statement was a not-so veiled criticism of Ecclestone and Max Mosley, president of the world governing body FIA.

The two are long-time friends. Mosley is Ecclestone’s former lawyer.

”Toyota was not happy with the action taken by the FIA, FOM [Ecclestone] and Ferrari,” said Tsutomi Tomita, Toyota F1 team director. ”There was no prior consultation with any of the other teams on such an agreement.”

F1 teams have complained that Ecclestone shares little of the sport’s commercial rights income, which was estimated at $$800-million in 2003. Teams receive about 23%.

Increasingly, Ferrari seems to be going its own way.

The Italian team has dominated the sport the last five years, backed by a budget that dwarfs other teams — about $400-million.

It has consistently opposed cost-cutting in F1.

Ferrari skipped a meeting last week with Ecclestone and the other nine teams. At the meeting, the nine agreed to 30 days of testing in 2005 — a one-third reduction from last season. The eventual goal is 10 days of testing.

”Sadly, Ferrari has chosen not to sign up for that,” Stoddart said. ”They see themselves free of any testing restrictions.”

On Friday, the other nine teams boycotted a meeting with Mosley. Ferrari was the only team attending.

With Ecclestone pulling one way, and the GPWC the other, a split in F1 is possible. A similar split happened in North America between IRL and CART.

”Pragmatically a split could happen, and we will do it if necessary,” said Heijnen.

Stoddart said he feared a split in formula one, calling it ”fatal”.

”The worst possible position F1 could be is moving toward ’08 would be to have five teams signed up for GPWC, and five signed up with Bernie,” he said. ”That would spell disaster.

”We don’t want a breakaway challenge. That is a fatal flaw. You only have to look at North America with CART and IRL. There really isn’t room at the top for two. It’s one or the other.” – Sapa-AP