F1 peace deal averts breakaway threat

Formula 1 pulled back from the brink on Wednesday as rebel teams struck an 11th-hour deal with the FIA to prevent the sport splitting in two.

Following a meeting of the governing body’s World Motor Sport Council in Paris, the Formula One Teams’ Association dropped plans to form a breakaway championship in exchange for concessions from the FIA over cost-cutting and governance.

As part of the deal Max Mosley will stand down as FIA president when his current term of office ends in October – having signalled on Tuesday that he would seek re-election if what he saw as FOTA’s threat to the governing body’s authority persisted.

Mosley has also had to abandon his controversial budget cap scheme, although the manufacturer squads have agreed to deliver major additional cost savings over the next two years and have pledged their commitment to Formula 1 until 2012.

“There will be no split,” said Mosley.

“We have agreed to a reduction of costs.

“There will be one F1 championship but the objective is to get back to early 1990s level of spending within two years.”

Speaking about his own position, Mosley added: “I will not be up for re-election now we have peace.”

F1's commercial impresario Bernie Ecclestone, who had vowed to do everything in his power to keep the sport intact, declared that he was “very happy common sense has prevailed”.


The breakthrough ends months of public wrangling over the future direction of Formula 1, in which the eight FOTA teams have been at loggerheads with the FIA over its plans to introduce a budget cap in 2010 and the manner in which it governs the sport.

Specifics of the cost-cutting measures have not yet been released, but it appears the FIA has received undertakings from the teams to reduce costs on an aggressive timescale, but without the enforcement mechanism that a budget cap would entail.

One of FOTA’s main objections to the budget cap scheme was the potential intrusiveness of the auditing process and the power it would hand to the governing body to pore over the teams’ accounts.

The teams also wanted a phased approach to cost reduction to allow them time to downsize their organisations in an orderly fashion, and the two-year timetable mentioned by Mosley represents such a ‘glide path’.

However, getting budgets down to early 1990s levels by the end of 2011 will take them close to Mosley’s original target of £40 million per year. By what means such a drastic reduction is to be achieved remains to be seen.

The FOTA teams and car manufacturers had made it plain that Mosley’s abrasive leadership style was at the core of their objections to F1’s governance, and that they would not accept his remaining in office for a fifth term.

Mosley claims that he always intended to step down this October and only reconsidered that position because of what he saw as FOTA’s bid to emasculate the FIA, a threat which has now receded.

But there is no doubt the teams will regard it as a victory to have extracted from Mosley a firm pledge to bring his turbulent 16-year reign to an end in four months' time.

Now that all the current teams have signed up to next year's championship, the FIA will shelve plans to issue legal proceedings against Ferrari and FOTA and has confirmed the 2010 entry list.