About the F1 Resource Restriction Agreement

[WhiteBlue]

Timbo, I have given you quotations from F1 officials who have publicly said that the RRA is a legally binding contract. I think we can take this as fact. It is also covered by publications that the FiA refused to enter into a CA in July 2009 unless all the teams of the 2010 championship had signed the RRA. This list is known and there are twelve teams left which will compete in 2011. Again we have facts that can be checked against official data recorded at the FiA and FOM websites. Leaving the FOTA organization does not change a mutual commitment that a team has made to the other eleven teams in a contract that covers the years 2010-2012.

A gentleman's agreement would be a form of contract that is based on honor and not on a national or supra national system of law. It is true that we do not know which court of law would be eventually dealing with violations of the RRA if disputes cannot be resolved by FOTA internal mechanisms. But there is no reason to believe that commitments under the RRA are not legally enforceable only because the contract is secret.

The question of a possible exclusion of a team from the FiA F1 championship is subject to speculation. I have said that before. But one can take an educated guess. If a team consistently refuses to honor it's commitment to fair competition under the RRA I would have little personal doubt that the FiA would impose sanctions on that team in addition to the penalties awarded by the court. It is well known that the FiA shares the view that the sporting competition should not be fought on unlimited resources. In fact the policy of the federation calls for a return to budgets under $60m as they have been common before 1995. This is also a known fact that has been documented in the publication quoted in this thread.

I would like to introduce another source into this thread.

[youtube]http://www.youtube.com/watch?v=DJrgCil1dJo[/youtube]

If you go to 4:00 in the video Paul Stoddard claims that Minardi never spend more than $28m until they went out of business with the sale to Red Bull in 2005. Why is that significant? Because it shows that every one of the current minions in F1 has at least twice the budget of a team that has competed 20 years in F1 from 1985 to 2005. We have a constant sniping by some parties that claim those poor teams - of which one has a budget exceeding $100m - do not belong into F1. Bernard Ecclestone and Luca di Momtezemolo are the exponents of that thinking. Comparing historical budget and current budget levels reveal that the minion teams are well positioned to be competitive in a historical view. The problem is that the budgets of the leading team have to be more restricted if there is a need for closer competition. Contrary to Montezemolo's position this cannot be achieved alone by technical and sporting rules. Budget or resource restrictions are unavoidable in my view and they should ideally be lower than they are now.

[marcush.]

http://www.autosport.com/news/report.php/id/88922

fota asking the teams 100K for checking the team for compliance to the RRA ..is this effectively more than one person dedicating his whole working time to look for one team?
I understand Kolles in his views .Ridiculous really .If it´s F1 it´s got to be expensive.

[timbo]

The question of a possible exclusion of a team from the FiA F1 championship is subject to speculation. I have said that before. But one can take an educated guess. If a team consistently refuses to honor it's commitment to fair competition under the RRA I would have little personal doubt that the FiA would impose sanctions on that team in addition to the penalties awarded by the court. It is well known that the FiA shares the view that the sporting competition should not be fought on unlimited resources. In fact the policy of the federation calls for a return to budgets under $60m as they have been common before 1995. This is also a known fact that has been documented in the publication quoted in this thread.

I never put a doubt on a "legally binding" thing.
The key question are possible sanctions.
IMO as long as the penalties are not written in Sporting code FIA has no way to strip points from the team(s) that didn't meet RRA requirements.
They can probably call article 151(c) or possibly (d), but that is a question.

[Rob01]

The RRA is enforceable. It has to be. It was formed so that the FIA would not mandate a harsh budget cap. If the teams show they can't police themselves then FIA will mandate a budget themselves. Max wants to stir the pot as usual with the teams to show that they need structure and guidance. He and Bernie always wanted the teams to fight against each other and Max made sure of it by his continued meddling of the results along with favortism to some teams. FOTA must go through the motions and apply necessary measures or the organization will be deemed worthless.

[WhiteBlue]

I never put a doubt on a "legally binding" thing.
The key question are possible sanctions.
IMO as long as the penalties are not written in Sporting code FIA has no way to strip points from the team(s) that didn't meet RRA requirements.
They can probably call article 151(c) or possibly (d), but that is a question.

The RRA is written in such a way that the FiA is not routinely involved. I do not think that routine punishment by points would be appropriate and in the spirit of the agreement. I would see a different escalation of penalties to enforce the RRA.

In the first step an assumed transgression in the off season is dealt with by a FOTA investigation. If the accusation is untrue nothing happens.

If there is in fact overspending found and the accused does not agree in a second step a regular court will have to find in the case. Lets assume the team is still found guilty they would have to operate the next year on a reduced budget. There is no need to involve the FiA.

Now let us assume the bad team does not observe the restricted budget in the second year and does not comply with the verdict of the court. I'm pretty sure that the FiA would exclude the bad team from the championship. By that time all the teams and the public would be up in arms and there would be really no choice.

The only way I can see this mechanism fail is when several top teams blatantly disregard the RRA deliberately and threaten to break away. I'm pretty convinced that this would not happen. All top teams have publicly supported the RRA and agree that unrestricted cost competition is not the way to go. Personally I would have massive doubts that Ferrari really supports the RRA but they are only one team. McLaren, Mercedes and Red Bull are all very vocal with their support.

I think the present crisis will be resolved and the RRA will be extended to 2017 relatively quickly as Martin Whitmarsh has said. The accusations against Red Bull are probably nothing more than the usual suspicions by competitors.

Max Mosley's role in this is not one of an active player. He just thinks that a budget cap would have been a more efficient way to police F1 and his view was confirmed by talk about such a budget cap for engine manufacturers. He is not involved in the process of F1 politics any more and he cannot even know the Red Bull figures which he commented on because they were not even delivered to FOTA when he made the comment. Red Bull were particular active in the question how an RRA on engine manufacturers would be defined. This is only natural because the are currently not making their own engine and they want to make sure that engine makers with their own team cannot run away with a competitive advantage. This is the reason why they have asked a lot of questions and have made the talks about an engine RRA more difficult.

[timbo]

If the accusation is untrue nothing happens.

Yeah, I would surprise if otherwise happens.

Now let us assume the bad team does not observe the restricted budget in the second year and does not comply with the verdict of the court. I'm pretty sure that the FiA would exclude the bad team from the championship. By that time all the teams and the public would be up in arms and there would be really no choice.

Thing is a question, how it would be possible to ban a team from such activity. Especially if a team openly states at the start of the season that it would not adhere to RRA.
Another interesting situation is what happens if team is leaving F1 anyway.

[WhiteBlue]

Thing is a question, how it would be possible to ban a team from such activity. Especially if a team openly states at the start of the season that it would not adhere to RRA.
Another interesting situation is what happens if team is leaving F1 anyway.

The teams need an FiA license. If they do not comply with the rules of fair competition - and that includes mutual agreements- the FiA can disqualify a team from the championship. There is massive precedence for that. During all the time of valid Concord agreements only teams complying with the concord were permitted to compete. Non compliance with the concord would automatically revoke the license to compete.

[timbo]

The teams need an FiA license. If they do not comply with the rules of fair competition - and that includes mutual agreements- the FiA can disqualify a team from the championship. There is massive precedence for that. During all the time of valid Concord agreements only teams complying with the concord were permitted to compete. Non compliance with the concord would automatically revoke the license to compete.

What do you mean by valid Concorde Agreement?
How did McLaren, Tyrrell and Williams participated in F1 in 1997?

[747heavy]

There is massive precedence for that.

please name one instance, where the FIA has excluded a F1 team from a championship in the past.

[andrew]

There is massive precedence for that.

please name one instance, where the FIA has excluded a F1 team from a championship in the past.

Aside from McLaren in 2007 I can't think of another instance of a team ever being disqualified from the entire championship. However this was during the time that MrM was keen on red Italian cars....

Only one instance of disqualification from a entire season then. The massiveness of this precedent is stagering(!)

Any ideas on how the RRA can be enforced? I think teams can hide overspending through creative accounting, especially if they are involved in other businesses (e.g. road cars, fizzy pop etc etc). The only solution I can think of is if the FIA holds the purse string of each team (like a client's account) only when the teams want access to their funds they have to apply formally to the FIA. That way the FIA will have a better idea of knowing what a team is spending and when they have overspent. Not fool-proof but a darn sight better than the current method of relying on MrM's increasingly pointless wittering.

[Giblet]

Other than Schumacher losing all his points for trying to take out Villeneuve, I can't think of another example even close.

[timbo]

Tyrrell was DQ'd in 1984.

[WhiteBlue]

All the tech and sporting rules from 1982 to 1998 had an exclusion clause which required all participants in the FiA F1 world championship to be signatories to the Concord Agreement and keep to the provisions of that contract. It means that any applicant who failed the criteria of the concord like for instance the constructor principle could automatically be disqualified.

It is not necessary that the clause was ever executed to prove it existed. The FiA can do the same thing with the RRA. A team braking the RRA can be excluded from a super license by the same power of the sporting authority. The governing body can simply argue that they are unworthy. After all the RRA and the CA are not any different in nature. They are private contracts about commercially relevant issues.

[747heavy]

so you call a possibility - "massive precedence" ? - Wow impressive
Does precedence not requiere something to actually have happend, so it can be refered to?

BTW - I would agree with the McL example, but this would be the only thing which was remotely close.
But even this one, did not include a future ban from participating in the WDC/WCC because of a breach in the past.

Schumacher is not a team, and they did not dsq Ferrari over it.
Tyrell was iirc for breach of technical regulations, similar to Toyota in the WRC,
and did not impose a ban for the next season either.

[timbo]

All the tech and sporting rules from 1982 to 1998 had an exclusion clause which required all participants in the FiA F1 world championship to be signatories to the Concord Agreement and keep to the provisions of that contract. It means that any applicant who failed the criteria of the concord like for instance the constructor principle could automatically be disqualified.

Again, how did Tyrrell, Williams and McLaren participated in 1997 season without signing the Concorde?