Clearly, it had not. Red Bull has always been against an overall cap, McLaren
began to change their tune, and by the time of Bahrain last month Todt was
left impotent, unable to implement a cap for 2015. (It could be the first of
many occasions on which the FIA appear to cede some kind of regulatory
responsibility to the Strategy Group, by the way.)
Tomorrow anything from a return to active suspension to a reduction in working
hours at circuits will be discussed, but the sport’s smallest teams, as well
as Mercedes, still believe an overall cap is the answer.
So what has the EU got to do with all of this? The reason is as follows.
The meeting called for Thursday largely came about because four of the smaller
teams – Marussia, Caterham, Sauber, and Force India – wrote a letter to Todt
in which they expressed their unhappiness at the abandoning of the cost cap.
While it did not state that they will go knocking on the European
Commission’s door, it did reference the legality of F1’s governance within
the context of EU law.
The letter of April 10 read: “The EU Commission addresses competition policy
in the sporting market place by using certain criteria to acknowledge that
sports businesses exhibit special characteristics that distinguish them from
other generic businesses and as such special rules are allowed to apply that
otherwise would not be acceptable under competition law. Formula One enjoys
such a distinction in the way that it operates.
“We believe that the actions of the F1 Strategy Group and its acceptance by
the FIA and the CRH [commercial rights holder] go against many of these
special characteristics and brings into question the very basis of some of
the rules of competition that are being relied upon by the sport.”
(They also seemed fairly dismayed to have discovered the cost cap was to be
abandoned through the media.)
Few in Formula One really want to see the EU back. CVC, the sport’s owners,
would see it as a disaster, ruining the chances of a flotation on the stock
exchange (their long-term goal). But it also presents problems for Todt and
the FIA.
The organisation could come under scrutiny for signing up to a commercial deal
with Ecclestone at the end of last year, which, depending upon your
interpretation, could contravene EU law. As part of the Concorde Agreement
as it is called – it is really a series of bilateral agreeements – the FIA
was paid $5 million, but was also given the option to buy around one per
cent of shares in F1 for $460,000, which were worth around $70 million at
the time of signing.
The reason this is a problem comes back to the last time the EU were involved
in F1. In their final undertakings they ordered that the FIA be divorced
from the commercial arm of the sport.
In June 2001 the Commission said the FIA agreed to “a complete separation of
the commercial and regulatory functions in relation to the Formula One World
Championship”. Does the shareholding option break that requirement?
It is certainly open to debate. Conspiracy theorists would also suggest that
Todt was eager for a prompt resolution to the Concorde Agreement – and the
“significantly improved financial means” it brought – in September 2013 with
the presidential election looming.
But regardless of the supposition, it would have seemed prudent for the FIA to
check with the Commission whether this commercial deal was in breach of
European law. So did they?
The Commission, amazingly, were unable to say. Their measly response to a
straightforward “yes or no” question was: “The Commission is following
developments in the sports sector, including in Formula One, and monitors
compliance with EU competition rules.”
How about the FIA? It is believed they did not consult the Commission, because
they do not see the series of bilaterals as changing the underlying role of
the FIA and the commercial rights holder.
While imminent action seems highly unlikely – there are EU elections next
month – murmurings of a watchful eye in Brussels have been building.
Whatever the outcome of Thursday’s summit, if the EU does get involved, the
entire sport will have much more to worry about than costs.