Posted on 06/20/2009 9:05:28 PM PDT by bruinbirdman
The Ferrari car company faces a $100m (£60.4m) fine from the Fédération Internationale de l’Automobile (FIA), the governing body of Formula One, over its threats to set up a rival racing series.
In the build-up to today’s British Grand Prix at Silverstone, Ferrari and seven of the sport’s biggest names announced that they would quit F1 in 2010 due to a dispute over new regulations including a budget cap.
If a rival series gets off the ground then the value of Formula One Administration (FOA), F1’s rights-holder which is majority owned by private equity firm CVC, could hit the wall.
The split has been fuelled by the expiry in 2007 of the Concorde Agreement, the contract that commits teams to race in F1. However, Ferrari is exposed to legal action for damages because of a separate contract it signed with the FIA which, according to the governing body, ties it to F1 until 2012.
In a letter sent to Ferrari on 8th June the FIA said: “Ferrari... has already breached its agreement with the FIA by threatening to withdraw from the Championship. The instability that this has caused continues to give rise to damage.” On Friday it announced legal proceedings were under way.
Ferrari’s response is that it has “no contractual obligation” to remain in F1. The car company says that it has an agreement with FOA to extend the Concorde, and to stay in F1 until the end of 2012 but this is conditional on the FIA accepting the extension which it claims it has not done.
CVC has a lot to lose from a split. It got $2.1bn in debt from Royal Bank of Scotland to buy FOA in 2006 and its annual interest payments now come to $260m. The sport’s running costs are around $300m annually so
(Excerpt) Read more at telegraph.co.uk ...
FOA = Bernie Eccelstone
FIA = Max Mosley (Oswald Mosely’s son)
They have been running this monopoly for 30 years. Ferrari is finally fed up with it. Formula 1 without Ferrari is nothing.
(I keep the Ferraris next to the Maseratis, the Aston Martins, and the Mercedes Gull Wing.)
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100% correct on that! F1 without Ferrari is like MLB without the Yankees.
Why should I pay an extra few hundred thousand for an Enzo just to cover Ferrari’s legal expenses?
If you’ve bought one recently you may already have—didn’t they get fined $100m for the McLaren spy scandal 2 years ago?
Ferrari fined? I thought McLaren was the team fined the 100 mill? anyone know for sure?
budget cap? next they’ll put in restricter plates and force the cars to look like standard production cars
Why should Eccelstone make all the money? He is a scammer. Ferrari is Ferrari. They have been Formula 1 since the modern era of F1 aka Post WW2.
The key though to F1 since 1994 is to either have Ross Brawn or Adrain Newey designing your car.
McLaren was fined NOT Ferrari. McLaren had gotten hold of Ferrari’s intellectual property through Ferrari mechanic Nigel Stepney.
the sooner F1 is rid of the evil twins the better.
GO FOTA!
that is how I remembered it also, I thought.
Even the Tifosi will be driving Hondas before long.
Other way around. McLaren was caught spying on Ferrari. (The fine was $100m, though, plus disqualification from the constructors' championship, although the McLaren drivers were not held responsible.)
CVC paid $2,100,000,000 to buy what was essentially a three year deal for the rights to Formula One. The first year operating costs as constructed were over $500,000,000, and since the main competitor contracts were going to expire in 2010, why not just wait and use the smaller amount of money to start a competitive circuit?
This seems to be incredibly bad business on the part of CVC.
McLaren has a multi-racial driver in Lewis Hamilton who won the drivers championship (WC). Sort of an Obama. His mum is white and dad is from the islands and is black. The kid is pretty nice but the father has a chip on his shoulder and is a troublemaker.
Getting to the top often involves a lot of politics. Lewis in 2007 was teamed with Fernando Alonso from Spain. Alonso won the WC at the youngest age ever and won it twice. He moved to McLaren in 2007. When you are WC you expected to be treated like the #1 driver on the team.
Well Lewis old man was trying to stitch up Alonso with the team. Making sure Lewis was treated favorably. There was an incident at the Hungarian GP where they really tried to screw over Alonso. Alonso was not having any of it. Alonso knew McLaren had the Ferrari data and blew the whistle and semi-blackmailed the major owner Ron Dennis of McLaren-Mercedes. It became an ugly mess and they were fined. Alonso left the team. Also caused a major rift because Alonso is an incredible national hero in Spain.
Hamilton wins WC in 2008. In 2009, Hamilton and his chief mechanic try to get Jarno Trulli of Toyota disqualified in an early race this year for passing under the yellow. Turns out they lied, got caught in the lie and Trulli was innocent. Once again another major scandal for McLaren due to “Team Hamilton” father and son. Ron Dennis has to quit the company he is a major owner in and the mechanic gets fired. They could have gotten banned from F1 for the year.
Mercedes must be tearing their hair out because this kid and his father are arguably wrecking the team. The team never had a scandal in 30 to 40 years and has had 2 major scandals because of the Hamiltons in 2007 then 2009.
The team budgets in F1 are over $300 million.
CVC made the mistake of doing a business deal with Bernie Eccelstone. Some German guy bought 1/2 of F1 years ago for the TV rights and then went bankrupt. Bernie ALWAYS makes money and the other party always loses.
Looks like Ferrari is going all the way and will tell the EU that Mosely and Eccelstone are running an illegal monopoly - like the one the EU keeps saying Microsoft is running. Bernie has been investigated for it before but the EU is as corrupt as our Senate.
No question! Screw Eccelstone.
Please correct me if I’m wrong but didn’t Ferrari pay Michael Schmuacker (sic) $80 mill the year he won the championship? So $100 mill fine should be easy pickings.
Me too!
And on the very end of the shelf, I have a nice Revell '64-1/2 Mustang!
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