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May 23, 2009

F1 Headed For A Showdown...

And it's not on the track. Ferrari lost their court case this week when seeking an injunction against the FIA's rules (more details here).

They lost not on the grounds of their case, but the fact that they failed to exercise their veto power at a prior meeting with the FIA when decisions surrounding the rule changes (and budget cap) for next season were made. However, the FIA did err in their procedural matters and thus are now also subject to additional legal action.

Yesterday all 10 F1 teams threatened (via FOTA, the Formula One Teams Association) to pull out for next season. FIA president Max Mosley's likely intended outcome for next year was a somewhat higher budget cap than 40m Euros. Maybe 60m or 70m, and one set of technical regulations. The threat of a two tier rule structure and a low budget cap was just posturing.

But the negotiations didn't go as planned once the existing teams realized the proposal would devalue the investments they have made over years, and in some cases decades (Ferrari), and not allow the them to ramp down their spending in a gradual
and orderly manner unless they were subjected to severe technical restritions, while teams that do comply with the budget cap (probably new entrants) would be allowed tremendous technical freedom.

There is no way any sensible outcome would involve Ferrari leaving F1. It is much more likely that a compromise will be reached (e.g. only one set of rules) and/or Mosley will have to leave.

And this still would not resolve the issue of how a budget cap could possibly be enforced in an equitable fashion. It is foolish to believe that accounting rules can be enforced more easily than technical rules.

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