Formula 1 and FIA in hand-to-hand combat: what happens after the angry letter?

( – Formula 1 loves a good controversy, but FOM’s letter to FIA President Mohammed bin Sulayem this week is much more important than that.

Formula 1 CEO Stefano Domenicali (left) and FIA boss Mohammed bin Sulayem


It’s not just a side story to the ongoing Formula 1 soap opera on Netflix, but potentially the start of a new dynamic in the way the sport is played.

For although there has long been a unified public front between FIA President Mohammed Ben Sulayem and Formula 1 CEO Stefano Domenicali, insiders know things have been different behind the scenes.

Far from the spotlights of television cameras, microphones and journalists’ notebooks, tensions have been simmering for months.

Although numerous disagreements between the FIA ​​management and the heads of Formula 1 owner Liberty Media have so far been settled amicably behind closed doors without public disclosure of the dirty laundry, things have taken a major turn. this week.

Formula 1’s angry letter to bin Sulayem over his comments on an ‘inflated’ $20 billion price tag for the sport has sparked an ‘open war’ between the sports regulator and the commercial rights holder, has said a senior source at the paddock.

open struggle for power

The current dispute is a far cry from those decades when the FIA ​​and FOM treated each other like bad luck and brimstone.

In fact, it’s the exact opposite of when then-FIA President Max Mosley and Bernie Ecclestone invented Formula 1 together.

Now it looks like we’re back to the early 1980s when there was a war between FISA and FOCA – with FIA boss Jean-Marie Balestre on one side and Ecclestone on the other and few things in common between them.

The straw that broke the camel’s back this week was how bin Sulayem voiced concerns over the Saudi sovereign wealth fund’s supposed $20 billion bid for Formula 1. But tensions between him and the FOM have been steadily increasing lately.

There were a number of events and reactions that exacerbated the situation. Part of that has to do with the governing body and how it has handled F1’s regulatory affairs.

These include what was seen as an unsatisfactory response to FIA mistakes at the 2021 Abu Dhabi Grand Prix, Sulayem’s initial blocking of further sprint races in 2023 and unease over some of the decisions of the race officials and rule enforcement the previous year – such as the safety car at Monza and the confusion surrounding the points rules at the Japanese Grand Prix.

The fact that bin Sulayem prefers to handle matters personally rather than using the usual presidential channels has also caused resentment in some quarters.

One could argue that this personal oversight can be a strength. So last year, bin Sulayem spoke to all drivers and teams about the porpoising problem to formulate an answer. But there have also been times when such an approach has angered those in the sport.

Worthy of mention was the release of the FIA ​​press release on the 2023 record calendar with its quote before Formula 1 knew it would be released and the embarrassing moment on stage with the Red Bull team boss, Christian Horner, at the FIA ​​gala due to confusion at the Japanese Grand Prix.

However, last week things escalated dramatically thanks to some social media posts bin Sulayem made on his personal account.

First, he criticized the opposition to Andretti’s new team offer, although competitors largely kept their opinions on the matter to themselves. But now his comments about Saudi interest and a $20 billion prize for the sport have proven to be a step too far.

The situation is perhaps indicative of all that is troubling the paddock: Bin Sulayem’s need to provide a strong personal response to a story that insiders consider offbeat and can be ignored.

F1: Saudi Arabia Grand Prix (Jeddah) 2022

Because the trigger was not the Saudis’ considerations of buying Formula 1, but the discussions that took place around the time of the 2021 Italian Grand Prix to start sponsoring races, which did not have location.

The fact that the story has surfaced suggests that it was intentionally leaked to publicize the $20 billion figure. Who will benefit the most from being talked to and why right now is anybody’s guess.

However, shares of Formula One Group (FWONA) rose 7.8% from below $59 on the Friday before Bloomberg’s news to a high of $63.60 the day before a steady decline.

The price increase also shows that $20 billion does not seem excessive given that FWONA’s market capitalization is currently around $16 billion.

The influence of teams

While the teams are currently sitting on the sidelines as observers of the row between Formula 1 and the FIA, they are keeping a close eye on how things unfold.

Because at a time when Formula 1 continues to go from strength to strength with record ratings and revenue, a power struggle at the top could be an unnecessary distraction.

Multiple sources consulted by say the events did not raise concerns about potential damage to teams or to Formula 1’s global image among sponsors and fans.

The teams’ livelihood, namely revenue from commercial rights, should not be affected. And even in the event that relations between bin Sulayem and the FOM break down completely, the governance structures should allow the FIA ​​to continue to deal with things like race weekends, rule changes, etc.

Formula 1 flag

How will the FIA ​​handle the current controversy? Zoom

Perhaps the biggest change will come within the FIA, depending on how bin Sulayem’s actions are viewed by members of the governing body.

FOM’s warning that the FIA ​​could be held liable for damage caused by the President’s statements will not go unnoticed by FOM members. Especially since government regulators are keeping a close eye on anything that could inappropriately affect company valuations.

Remember Elon Musk, who was fined a total of $40 million by the Securities Exchange Commission (SEC) in 2018. He was accused of misleading investors with a tweet that implied he was planning to privatize his company, Tesla.

Additionally, the FOM letter recalled that the FIA ​​had long since agreed not to interfere in the commercial affairs of Formula 1.

As part of an approval by EU antitrust authorities in 2001, it was clarified where FIA ​​control ends. The European Commission’s press release at the time stated: “The role of the FIA ​​will be limited to that of a sporting regulator without commercial conflicts of interest”.

And further: “The FIA ​​will therefore have no influence on the commercial exploitation of the Formula 1 championship.” A clear boundary has thus been drawn.

A look into the future

So what’s the next step? In the short term, it will be interesting to see if bin Sulayem sticks to his statements or apologizes and changes his tactics in the future.

In the longer term, it would be wrong to assume that Formula 1 will settle for anything less than a coup by the FIA ​​to have someone else take over. However, what Formula 1 probably wants is a clearer definition of areas of responsibility by the governing body.

But what he will almost certainly demand are guarantees that the FIA ​​will stick to what it agreed with the EU decades ago: not to interfere or attempt to influence commercial affairs.

Ben Sulayem himself has long insisted he doesn’t see any major problem between him and Domenicali. At the Abu Dhabi Grand Prix last year, he said they spoke to each other every other day.

#ThinkingForward interview with Mohammed bin Sulayem

The full interview with Mohammed bin Sulayem, one of only two candidates to succeed Jean Todt as FIA President, as part of our #thinkingforward interview series. More Formula 1 videos

Last weekend at the Monte Carlo Rally, the FIA ​​president reiterated that things are going well at the top – although he knows there are times when the Formula 1 promoter has to act as he hears it. “Yes, but the FIA ​​must also do its job,” he said, stressing: “The good thing is that I have a good relationship with Stefano.”

“Stefano comes from motorsport and the automotive industry, which makes it easier for both parties to move forward. It’s not like you bring in someone who knows business and doesn’t know anything about sport, no .”

Bin Sulayem also took the opportunity to explain that many rumors of friction between the FIA ​​and the FOM had been launched by the media. They would speak directly divisive to any potential conflict.

However, Formula 1’s letter to the FIA ​​showed that the split at the top is no pipe dream on the part of journalists. Rather, it is a real battle for control of the future direction of Formula 1 that is set to dominate the paddock agenda for months to come.

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