Formula One Teams’ Association (FOTA) chairman Luca di Montezemolo has revealed that the cost-cutting agenda the F1 teams signed up to at Wednesday’s landmark meeting in Monte Carlo will revolutionise the sport from 2012.
After a meeting with FIA president Max Mosley that it described as the “most successful” in memory, FOTA stated that the teams had reached agreement on a range of proposals that would reduce their huge outlays from next season onwards whilst ensuring F1 remains the pinnacle of motorsport.
No details of the measures proposed by FOTA have yet been released, pending their ratification at Friday’s World Motor Sport Council meeting.
But Wednesday’s statement made clear that they would yield “very significant” cost savings a year earlier than Mosley had demanded.
Elaborating on the discussions in a statement released on Thursday, Montezemolo said the teams have committed to three years of spending retrenchment leading to the introduction of a radically different formula from 2012.
“The proposals presented to President Mosley, with Formula 1’s DNA in mind – made of technology and sportiness – will enable us to drastically cut costs as of the upcoming season to have a complete[ly] new Formula 1 in the year 2012, projected into the future,” he said.
He signalled that energy efficiency would play a key part in the post-2012 F1, while budgets would be scaled back to 1990s levels.
“[It would be] distinguished by an innovative spirit and great attention as far as the environment is concerned, but on economic levels as in the 90s, while maintaining the fascinating challenges, which is one of the factors why this sport is one of the most popular sports in the world,” he said.
Montezemolo said Wednesday’s meeting had been held in “a climate of enormous collaboration” as all the participants recognised the gravity of the financial pressures facing F1 amid the global economic downturn – pressures that were dramatically highlighted by Honda’s shock withdrawal from F1 last Friday.
“The worldwide economic crisis and the enormous increase of costs in Formula 1 over the last years led the FIA and its president to give a strong and right impulse to cut costs as of 2010 to get our sport back into acceptable economic dimensions, so all teams will be able to participate,” said Montezemolo.
“The answer we could find was beyond our all expectations.
“The extreme compactness, never seen before, and all the participants’ passion for this sport brought the FOTA members to go beyond the requests made by President Mosley, taking into account courageous proposals, while voting unanimously for a substantial reduction of costs already as of 2009, which will be the most difficult year for the world economy and for the automotive industry in particular.”
He added that he was proud the teams had managed to overcome partisan self-interest through the new forum of FOTA and had united behind proposals to put F1 on a sounder footing.
“I am extremely proud of the work FOTA has done so far – an association which didn’t exist until last September and which united the teams, going beyond their rivalry, the salt of racing, but which could have been an obstacle on the way redesigning the future of Formula 1,” he said.
While Montezemolo was delighted with the agreement reached over cutting costs, he stressed that the issue of the teams’ income also had to be urgently addressed in discussions with Bernie Ecclestone and Formula One Management (FOM).
“There is still much left to do, also because when we have a look at the economic side of the companies and not only the ones of the F1 teams, we have to consider the costs but also the earnings,” he said.
“In this sense yesterday we managed to agree with the FIA on the necessity to organise a meeting with FOM to discuss the earnings of the Formula 1 teams.”
The teams are looking to increase the 50% share of F1 profits that is divided between them – possibly to as much as 80% – to reinforce the improvement in their finances that would be achieved by lower costs.
But a redistribution on that scale is expected to be resisted by Ecclestone and F1’s majority owner CVC Capital Partners, which funded its acquisition through a leveraged buyout and needs a large amount of ‘headroom’ merely to make the interest payments on its debt and pay off the loan principal.
© ITV-F1