F1: Ferrari (NYSE:RACE) Has The Power To Veto Series Rules
Ever since the 1980’s, Ferrari has had veto power in F1, if it does not like a rule the series or its governing body, the FIA, wants to implement, The Scuderia can step in and stop things.
Today, FIA President Jean Todt is voicing that Ferrari should lose that ability
The Big Q: Why does Ferrari’s F1 team have the ability to do that?
Ferrari is 1of 10 F1 teams and has the largest racing budget, in addition to being able to sway rules in its favor.
Mr. Todt, who once was in charge of the Ferrari motorsports during Y’s 1993 to 2004 and became FIA President in Y 2009, told the motoring press that he now feels like “times have changed” since Ferrari got that power in the ‘80’s and that it is time the team gave it up.
Mr. Todt tells the story about how Ferrari got its veto power every time he’s in disagreement with its existence or how the team uses it, and it follows this line: The veto power came about during a 1980’s Concorde Agreement, but is actually a pact between the FIA, the teams and F1, which determines how the sport will be run.
This is the veto story, as Mr. Todt told it recently:
“It is something I was curious about, because when I joined Ferrari in 1993 I tried to understand what was the story behind it. And the story behind it was simple.
“Enzo Ferrari was the founder, and he was very isolated in Maranello compared to all the British teams. He was alone and you will remember, in the 1980’s, Ferrari was the only full car manufacturer of engine and chassis.
“And he was facing private teams, like Williams, Lotus and McLaren, that were all using the same engine. If I remember it was a Ford Cosworth engine. So he got that [veto] in his discussions to implement. …”
Replacement Concorde Agreements have been signed since, with Mr. Todt saying the last one was signed in Y 2013 and expiring in Y 2020.
Reports last year were that F1’s new owners could get rid of the agreement altogether and replace it with an open-ended partnership.
Notably, Ferrari, which keeps threatening to exit F1 if it diminishes the importance of power-train uniqueness between manufacturers, has a huge voice on series regulations. Power-train uniqueness costs money, and Ferrari has more of that than most other teams.
Ferrari used its veto in Y 2015, when the FIA proposed cost caps on customer engines. Sky Sports reported at the time that the proposal got a majority vote before the veto, and the FIA had to change its proposal afterward.
Mr. Todt says that Ferrari’s veto power changed with the Y 2013 agreement to make the wording of it “more precise,” and that Ferrari needs a “strong rational to be able to exercise it” under the current terms. In order to use its veto, Mr. Todt said, Ferrari has to prove that the rule “goes against their interest.”
But, Mr. Todt said most have never questioned the Ferrari veto power, and that a lot are in favor of it.
From Mr. Todt:
“When we arrived in 2013, it was the first time as president of the FIA I was facing the consideration of the veto right, and I must say that I was very cautious, because it is like having a gun. So was I, as president of the FIA, prepared to give that?
“And I was surprised because Bernie as commercial rights holder was in favor of Ferrari having the veto right. All the teams were in favor of giving the veto right too. So it would have been a bit strange that myself, I would have been against.
“I know sometimes I get blamed because I try to have a harmonious situation and everyone going in the same direction, but course I agreed to implement the veto right in the discussions of the renewal of the Concorde Agreement 2013-2020. …”
Ferrari will keep its veto power for a few more years, since a new agreement is not planned until Y 2021.
|NYSE:RACE||122.23||14 March 2018||-0.87||123.93||123.97||121.95||249,903|
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