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Home > Sports > Formula One > Reuters > Report


Ferrari first, on and off the track

Alan Baldwin | January 21, 2005 10:15 IST

Bernie Ecclestone has said often enough that Formula One is Ferrari.

The announcement of a new agreement between the sport's governing body, commercial rights holder and world champions only serves to emphasise the point.

In any power struggle for control of the cash-generating glamour sport, two things are traditionally deemed to matter more than anything.

One is the involvement of Ferrari, the only team to have competed in Formula One since the first championship in 1950 and by far the most recognisable brand and most successful contenders.

The second is the Monaco Grand Prix and the one can be counted on going with the other.

Ferrari have now committed to Formula One until 2012, and by that they mean the championship governed by the International Automobile Federation and run by Ecclestone, who holds the commercial rights for 100 years.

With the Italians on board, the 74-year-old Ecclestone can justifiably sit back and smile only weeks after some had portrayed him as a spent force.

The Grand Prix World Championship (GPWC) set up by carmakers, including Ferrari, to plan for their own series from 2008 when an existing 'Concorde Agreement' expires will now either have to decide whether to go it alone without Ferrari or capitulate.

The chances are that more deals will be done with Ecclestone.

The GPWC now has effectively only three members -- Mercedes, Renault and BMW -- while the teams are being offered a $500 million sweetener over the next three years if they follow Ferrari's example and sign up.

BETTER DEAL

Ferrari are special and they know it.

So too do the powers that be, however frustrating that is to the champions' rivals who have seen them win the last six constructors' titles and believe that everything is tilted in their favour.

According to Ecclestone, the Concorde Agreement has to be agreed first by Ferrari, himself and the FIA before the others are invited to sign.

It was only after the deal was done that the rest of the teams were contacted.

There were those who detected a conflict of interest in Ferrari's position towards the GPWC and their decision to side with Ecclestone.

But Ferrari, like many people in the paddock, appear to have seen the GPWC as primarily a pressure-group to extract more money from Ecclestone.

"As far as GPWC is concerned, it has served its function by securing a better deal for the team as well as opening the door for the other teams to do similar deals with Ecclestone," said a Ferrari spokesman.

"This is not just about money," he added. "This is about securing Ferrari's future in Formula One without the team being a drain on the resources of the road car company."

Behind that statement lies the fact that even hugely-successful Ferrari, with sponsors paying tens of millions to be associated with them and seven times champion Michael Schumacher, are feeling the squeeze.

STAYING PUT

When Ferrari president, also Fiat chairman, Luca di Montezemolo warned that Ferrari's presence in Formula One could not be taken for granted, he was not just scaremongering.

Ferrari, a small volume producer of exclusive dream machines, could not fund their racing programme from the sale of road cars alone, unlike car giant rivals such as Toyota or Mercedes.

Parent Fiat has enough financial headaches of its own.

While a flotation of Ferrari has been put on hold because the conditions were not right, the company is clearly a far more attractive proposition if the Formula One costs can be covered without looking to shareholders.

From 2008 Ferrari can now expect to fund their racing from sponsorship, the sport's revenues, merchandising and other commercial rights.

Ferrari are staying put. It remains to be seen whether all the other manufacturers, having failed to set the agenda and overcome Ferrari's favoured status, are as well.

© Copyright 2005 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
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