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Ferrari could veto Wolff F1 role

NEWS STORY
08/05/2019

It is well documented - and pretty obvious to even the most casual observer - that the teams, especially the major power players, rarely agree on anything.

Imagine therefore, the reaction from the likes of Ferrari and Red Bull were, as is being claimed, Toto Wolff, a man synonymous with Mercedes, to be named as F1 supremo, succeeding Chase Carey when the American's contract ends next year.

Ignoring the question of who would head Mercedes following his departure, a move which would surely fuel further speculation that the German team might quit F1 and concentrate on other motorsport activities, namely Formula E, there is the little matter of whether Ferrari and Red Bull would accept the former boss of their main rival - and benchmark - as the new boss of the sport.

While Red Bull would have to do what it always does, whinge, Ferrari would at least have recourse to its well-documented power of veto.

Ferrari's insistence on standing its ground and threatening to quit the sport unless it gets it way is well known, Jean Todt revealing last year that Enzo Ferrari had first requested power of veto at a time the Garagistes were dominating the sport with their V8 Cosworths.

Ferrari "was the only team supplying engine and chassis against some other teams that were all powered by Ford," revealed the FIA president last year. "So at this time, it was decided that being away from what is called the silicon valley of motorsport, they needed to have a protection. That is the story about the veto. But personally, I feel now I am not in favour of that. Times have changed."

However, over the decades that followed, even though it might have spent years in the wilderness in terms of titles, Ferrari's power and influence within the sport grew.

How much power and influence became clear in 2013 when the prospectus for the planned flotation of F1 on the Singapore stock market in 2012 was revealed.

Though the global financial crisis put the brakes on the floatation, the prospectus had already been produced and what it revealed is the stuff of F1 legend.

As has been well documented, Ferrari can block changes to the regulations, the prospectus revealing that F1 and the FIA "allow Ferrari to veto any change to the regulations already announced or introduced (subject to certain exceptions)."

It is also one of three teams which shares in the Constructors Championship Bonus fund, an annual dividend of at least $100m which is shared by the top three teams based on the number of races won in the four seasons prior to 2012.

This gives Ferrari at least $30m annually on top of its share of the 68% of the sport's underlying profits which is divided between all ten teams. In addition the Maranello outfit gets a further 5% of F1's profits. This works out at around $62.2m a year, meaning that the Italian team is guaranteed at least $100m in prize money before the season has even begun.

Then there's the right of first refusal to supply cars for F1's support series should Porsche ever pull the plug on the Supercup.

Also there's chief executive Louis Camilleri's seat on the board of the sport's parent company Formula One Topco.

According to the prospectus, one of the benefits of being the longest-standing team in F1 is that Ferrari's director "will have the right to sit on the Audit and Ethics and Nomination Committees and any standing or ad hoc committees of the Company established to monitor the strategic development of the Group's business. The Longest Standing Team's Team Director will also have influence in relation to the removal or appointment of the Group's chief executive by virtue of him being a member of the Nomination Committee."

The nomination committee has at least three members and decisions are decided by a majority of votes, which gives Camilleri a significant amount of influence.

But that's not all.

The prospectus also reveals that F1 "must obtain the written consent of Ferrari prior to the appointment of any person as our chief executive officer if within the past five years, he or she has held a senior executive office or an ownership interest of 5% or more in any Team or automobile manufacturer which either owns more than a 5% interest in a Team or is a supplier of engines to a Team."

Prior to the teams' current contracts, which began in 2013, Ferrari were signatories to the Concorde Agreement which ran from 2009 to the end of 2012, and while some might argue that because the agreement ran until the end of 2012, and is therefore no longer in effect, the latest financial statements for Renault state that "as a competitor in the FIA Formula One World Championship, the Team is subject to the International Sporting Code, the current F1 Technical and Sporting Regulations, and the provisions laid out in the 2009 Concorde Agreement or such similar agreements."

Indeed, as Forbes reveals, the definition of the Concorde Agreement is very clear and can be found in Liberty's filing with the United States Securities and Exchange Commission, which on page 77 states that "from 1981 until 2012, successive Concorde Agreements governed the relationship between Formula 1, the FIA and the Teams, including the regulation of the World Championship."

Page D-3 of the filing states that the Concorde Implementation Agreement modifies "the terms upon which the 2009 Concorde Agreement will be applied and renewed in respect of the period 1 January 2013 to 31 December 2020 and successive subsequent periods until 31 December 2030."

As it happens, Ferrari's seat on the Nomination Committee comes to an end at the end of 2020, and it remains to be seen what benefits the Italian team is able to retain after that time and what benefits it has to relinquish.

Though Ferrari and Mercedes are both working with their rivals, the FIA and Liberty in a bid to agree a new contract, as was made clear in Baku, there remain a number of sizeable elephants in the room.

Though there are 20 months before Chase Carey's contract comes to an end, with talks on the 2021 regulations still far from done, talk of the architect of Mercedes success becoming the sport's new supremo might prove a further fly in the ointment for Ferrari.

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READERS COMMENTS

 

1. Posted by bfairey, 13/05/2019 14:03

"Funny that Ferrari were "Garageistas" when Merc were winning races prewar."

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2. Posted by Greg, 09/05/2019 10:31

"F1 = Ferrari 1st"

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3. Posted by Vinodh Moodley, 09/05/2019 8:45

"Strange how Ferrari may have an issue with this but didn’t seem to have any problem with Jean Todt, their former team principal, being the head of the FIA. "

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