The Calm Before The Storm: What June 12 Will Bring For Formula One

Andy ShawCorrespondent IJune 11, 2009

ISTANBUL, TURKEY - JUNE 07:  Cars line up on the grid before the start of the Turkish Formula One Grand Prix at Istanbul Park on June 7, 2009, in Istanbul, Turkey.  (Photo by Paul Gilham/Getty Images)

The Formula One world anxiously awaits the FIA's announcement this Friday, June 12, as the full scale of the FIA-FOTA row, that has threatened in recent weeks to tear the sport apart, will be realised.

That day is when the FIA will finally reveal which of the many applicants for the 2010 season will be accepted, and permitted to participate in next year's world championship. Many new entrants have put their names forward in the hope of securing a grid spot, but the entries of the eight FOTA teams are conditional, meaning that they will not be valid unless the FIA agrees to the demands attached to their entry forms.

Those demands include the scrapping of the FIA's controversial 2010 regulations and the signing of a new Concorde Agreement, which will lay out in writing the principles of F1's governance and prevent the FIA from riding roughshod over the teams, as FOTA feel has been done in recent years.

The FIA argues that such concessions will jeopardise the plans of new teams, whose entries hinge on the fact that radically revised 2010 regulations, including a £40m budget cap, will apply next season.

If the FIA chooses to stand firm and effectively reject FOTA's conditional entries, the way could be paved for a disaster of epic proportions. F1's commercial boss Bernie Ecclestone has already threatened to sue Ferrari, who he claims are committed to F1 until 2012, should they fail to make the grid next season.

Ferrari and Renault have recently reiterated their intention to leave F1 if their demands are not met, and talk of a breakaway series has continued, but this option seems decidedly unrealistic in a world crippled by economic crisis, and where Ecclestone himself controls the most lucrative of the television and advertising markets that form the life-blood of a global racing series.

The FIA, too, cannot really afford to lose big-named teams, as they know that Ecclestone can walk with them and use his financial clout to establish a really workable rival series. But neither party wants this option—a look at the extremely damaging IRL/CART split in the USA in 1996 demonstrates how dangerous such a division could be for the long-term future of the sport.

Both sides have postured and continued posturing right up until the crucial June 12 "red letter day." But serious consideration of the issues at hand clearly demonstrates that this is not war—if anything, it is more akin to a highly complex and baffling game of poker. He who—to switch metaphors for a moment—blinks first will ultimately lose out, but neither can afford to keep staring for too long.

Plenty is up for grabs in the coming months in Formula One. The way the sport is governed, formerly through the auspices of a quasi-independent Formula One Commission and now seemingly on the whims of Max Mosley and the FIA, is one thing that the teams have been seeking to change.

The distribution of revenues is another.

Currently the teams receive half of the profits generated by the commercial rights holder, CVC Capital Partners: Relatively speaking, however, the profit margins are slim, with the majority of revenues going towards servicing the massive loans taken out by CVC to buy the rights in the first place.

Even Mosley's job is not safe: Up for election in October, if the President wishes to continue in his role as head of the federation he will need to assert his authority over world motorsport, and quelling a few noisy, blustering F1 teams is a perfect way to do this. No credible opponent to Mosley has yet emerged, but some within and outside Paris believe it is only a matter of time.

Both sides desperately need to be seen to "win" in order to satisfy their own motives; FOTA want security in their sport and a vision for the future that more completely corresponds to the aspirations of their paymasters, for the most part large car companies. The FIA, quite simply, wants to retain their authority as the arbiters of global motorsport.

For neither side to suffer a massive hit requires compromise, and it is for this reason that compromise is the most likely outcome of this week's meetings, and what will be announced on Friday will be a position far removed from the disparate pontifications of both Mosley and the teams.

But neither side will want to be seen to be backing down, either, which is why these concessions will be hammered out behind closed doors, and it is only on Friday that we will begin to see how this crisis has been resolved. Nobody here can afford to lose; nobody can go it alone; cooperation will be the way forward, and the astute businessmen and legendary negotiators of both the FIA and FOTA are surely smart enough to realise this.

So June 12 will not bring forth a storm, but more of a gentle breeze, the winds of change not blowing strong enough to upturn any well-established structures or upset any of the saga's key players.

Only time will tell what direction Formula One will take in the future, but it is not unduly optimistic to suggest that all parties are going to see sense in the end.