FIA stands firm on budget cap plan - Mercedes-Benz Forum

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post #1 of 3 (permalink) Old 06-16-2009, 09:19 AM Thread Starter
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FIA stands firm on budget cap plan

FIA stands firm on budget cap plan
Controversial financial regulations ''remain as published''
16/06/09 13:51

Mosley's plan still on course
FIA President Max Mosley's plans for a €45 million (US $65m) annual budget cap applied to each Formula One team will go ahead as planned, the sport's governing body has announced.

Following a meeting held on Monday between FIA financial experts and representatives of the eight Formula One Teams Association members, no progress on the issue was accomplished.

In a statement issued today, the FIA placed the failure of yesterday's meeting squarely on the shoulders of the rebel teams' alliance.

"Unfortunately, the FOTA representatives announced that they had no mandate to discuss the FIA's 2010 financial regulations. Indeed, they were not prepared to discuss regulation at all," the press release read.

"As a result, the meeting could not achieve its purpose of comparing the FIA's rules with the FOTA proposals with a view to finding a common position."

Mosley's 2010 regulations aim at reducing the cost of participating in Formula One by imposing a budget cap. The plan gives private outfits the opportunity of competing with manufacturer-backed entries by establishing a spending limit on the majority of team operations, excluding certain salaries and marketing expenses.

The FOTA members are demanding that Mosley's plan be replaced by their own, which contains a higher budget cap associated with their own cost-cutting measures.

With no common ground being determined during Monday's meeting in London, and with the FIA again rejecting the FOTA proposals as inefficient, the FIA has decided to maintain its course and stands firm with its controversial 2010 budget-capping regulations.

The governing body indicated: "In default of a proper dialogue, the FOTA financial proposals were discussed but it became clear that these would not be capable of limiting the expenditure of a team which had the resources to outspend its competitors. Another financial arms race would then be inevitable."

"The FIA Financial Regulations therefore remain as published," the FIA statement concluded.

Unless the rebel teams suddenly decide to drop all their demands – a very unlikely scenario - an agreement must be reached between the FIA and the FOTA representatives by Friday June 19th.

Failing any agreement by this coming Friday, the Ferrari, Toyota, Renault, BMW, McLaren, Red Bull, Toro Rosso and Brawn teams will be removed from the 2010 championship entry list and replaced by a plethora of new outfits waiting in the wings, all having already accepted Mosley's terms in order to enter F1.

The FIA has been accusing certain elements of the FOTA alliance of purposefully blocking any positive progression in what has become an all-out war for a higher degree of implication from the teams in the governance of the sport.

All eight FOTA members, in addition to the car manufacturers themselves, have declared their readiness to break away from Formula One in order to establish their own self-governed single-seater championship.

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post #2 of 3 (permalink) Old 06-16-2009, 05:15 PM
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There's been movement on FIA's side, going from 40mm to 65mm excluding certain salaries and marketing expenses. I'd love to have a breakdown of the marketing expenses excluded. Perhaps they should put a cap on marketing income (sponsorship) instead.
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post #3 of 3 (permalink) Old 06-17-2009, 09:55 PM Thread Starter
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Mosley does not agree to teams' compromise

Mosley does not agree to teams' compromise
Offers rebel teams to accept the 2010 rules as published
17/06/09 16:28

FIA and FOTA letters going back and forth
F1's crisis is creeping awkwardly towards a compromise after the FOTA rebels wrote to FIA President Max Mosley on Tuesday.

As already reported, the eight teams said they would agree to a budget cap - now called "resource restriction" - if it could be policed by a group of independent accountants.

"We have already offered to accept the report of a reputable auditor backed up by the signature of a main company board member," Mosley replied by letter on Wednesday.

He added, however, that a "fundamental problem" with FOTA's proposal is the "absence of a clear figure." Mosley has previously indicated that he would agree to a 100m euro cap in 2010, reducing to 45m in 2011.

FOTA asked that Friday's deadline for making their 2010 entries unconditional be extended until July 1st, but Mosley declined, arguing that the "remaining applicants" for places on the 2010 grid need to be informed "no later than Friday."

He also turned down FOTA's request for governance provisions changes in a renewed version of the 1998 Concorde Agreement, insisting that there is "not time left" for the necessary lengthy negotiations.

Mosley advised the teams to simply agree to extend the 1998 Concorde and then "we can negotiate a new 2009 Concorde Agreement under the protection of the 1998 arrangements.

FOTA said the teams want a judge's seat at the International Court of Appeal, but Mosley said this would require a change in the FIA Statutes.

"There are elements in your proposals which we may be able to agree to, but we need time to look at them," he wrote.

The FOTA members also said Cosworth should not be allowed to run its 2006-spec engines with a higher rev limit next year, but Mosley responded that the British firm has "neither the time nor the resources to retune for 2010" and claimed that in any case, the three new Cosworth-powered teams will not have "any competitive advantage whatsoever."

In short, Mosley remains firm that the teams need to make their 2010 entries unconditional by Friday.

"We propose that you accept the 2010 rules, as published (...) If necessary, these can be revised within the above governance procedures in due course," he wrote.

The FIA President also indicated that each team will shortly receive a letter. If signed and returned to the sport's governing body, Mosley's proposals will be made "legally binding and the relevant team's entry unconditional."

D.B. © CAPSIS International
Source: GMM
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