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The FIA/FOM conflict


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#1 Marklar

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Posted 24 January 2023 - 14:49

I feel like this will be a frequent topic this year (feel free to lock/merge if a topic for this already exists)
463SAYr.png

https://news.sky.com...uation-12794311



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#2 Risil

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Posted 24 January 2023 - 14:59

Does MBS know what he's doing or is he picking dumb fights accidentally? This is the question I am asking myself.



#3 JHSingo

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Posted 24 January 2023 - 15:03

*Sigh*

 

I'm probably in the minority - but I'm firmly "team FIA" on this. Yes, they don't get everything right, and yes there's certainly lots of things about the FIA that could be improved. Is MBS the right person for President? Jury's out. 

 

However, I do think that F1 needs the FIA more than it realises, to keep the sport in check and prevent it from its worst excesses. The inmates can't be running the asylum. It's becoming ever clearer that with the explosion in popularity the sport has had in recent years, there are plenty of people in F1 who care more about how that can benefit them financially, rather than necessarily what's in the best interest of the sport. I mean, that's evident enough with the whole Andretti thing. 

 

It seems more and more likely that F1 could break away from the FIA, or maybe there will be some self-destructive break-away series idea again, but I genuinely fear for the future of F1 without the FIA involved. 

 

In fact, I'll go further, and say that without the FIA, I could easily see F1 ceasing to exist within 5-10 years. It won't be electric cars or environmental concerns that kills F1, it'll be needless greed and self-interest. 


Edited by JHSingo, 24 January 2023 - 15:05.


#4 lustigson

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Posted 24 January 2023 - 15:05

red-that70sshow.gif



#5 Muppetmad

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Posted 24 January 2023 - 15:15

Sulayem is right to question if it is in the sport's best interests for the Saudi sovereign wealth fund to acquire F1 at the price Bloomberg reports; whether it is wise for him to express his concerns publicly is another matter, although I admire his willingness to do so in this case.



#6 Peat

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Posted 24 January 2023 - 15:16

***LAUGHS IN BALESTRE***



#7 GlenWatkins

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Posted 24 January 2023 - 15:19

I find it rather refreshing to see MBS stand up to the F1 bullies in the paddock.

Edited by GlenWatkins, 24 January 2023 - 15:59.


#8 FLB

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Posted 24 January 2023 - 15:20

En francais: https://www.autohebd...en-sulayem.html

 

 

The war is now formal. Liberty has responded.



#9 PayasYouRace

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Posted 24 January 2023 - 15:28

But unlike 1980-1982, we’re already at a reduced field.

#10 genius83

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Posted 24 January 2023 - 15:48

But unlike 1980-1982, we’re already at a reduced field.

And also with no extraordinary characters like the past either.

 

I think this conflict was in the making since the 2021 season and I am not just talking about the conclusion of the season but the whole season in itself. There were many incidents where FIA's decisions were totally opposites of what the teams wants. In 2022, the 2 race director rule was not acknowledged by the teams after the controversy of Japan GP and they want 1 director for the whole season but FIA denied that demand by saying that they will continue with the 2 director format for 2023.

 

Teams don't want another entrant but FIA is open to more teams is the cherry on this whole conflict. :rotfl:



#11 ANF

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Posted 24 January 2023 - 15:49

Is it FOM or FOG?



#12 FirstnameLastname

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Posted 24 January 2023 - 15:55

The 100 year lease is the root to all this problem. Was a ridiculously cheap deal.

#13 Afterburner

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Posted 24 January 2023 - 16:12

Nothing is more fundamentally "racing" than intricate, spirited arguments about the minutiae of financial structures which enable a few lucky individuals to live a life of chained adrenaline highs.
 

I love every moment of it.



#14 JimmyClark

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Posted 24 January 2023 - 16:35

Now F1 has become a cash cow, everybody involved wants a piece of it - greed brings about the end of most nice things. 



#15 jonpollak

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Posted 24 January 2023 - 16:41

Does MBS know what he's doing or is he picking dumb fights accidentally?

Or on Porpoise?

 

Jp



#16 Risil

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Posted 24 January 2023 - 16:52

Now F1 has become a cash cow, everybody involved wants a piece of it - greed brings about the end of most nice things. 

 

That is more or less MBS's argument, yeah!



#17 loki

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Posted 24 January 2023 - 17:06

Is it FOM or FOG?

The Formula One Group is the holding company that controls various F1 subsidiaries which includes Formula One Management.



#18 Fastcake

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Posted 24 January 2023 - 17:07

The whole set up of Formula One derives from Max and Bernie’s little plan to enrich themselves and cement their power. It was perhaps only a matter of time before a future Max and Bernie started to fall out.

Interesting stuff. This has been bubbling away all of last year, and after some silent positioning it appears they’re finally showing some fangs to each other. Arguably it actually goes back to the tail end of Todt’s tenure, when a largely unnoticed story reported sporting staff transferring from FOM to the FIA as the latter reasserted some authority on their sphere of control.

Ultimately the two of them are tied to each other thanks to that 100 year contract, and a dispute between the stakeholders is not in the interests of the sport. Usually you’d expect them to sensibly settle things and move on, but as this is sport expect a stupid fight instead.

#19 KWSN - DSM

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Posted 24 January 2023 - 17:10

I am with Sulayem on this one.



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#20 loki

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Posted 24 January 2023 - 17:16

Sulayem is right to question if it is in the sport's best interests for the Saudi sovereign wealth fund to acquire F1 at the price Bloomberg reports; whether it is wise for him to express his concerns publicly is another matter, although I admire his willingness to do so in this case.

 

The market cap of the company is US$16 bil right now so that’s the starting point for any offer.  Plus a premium to entice the shareholders to sell.  I doubt they have a case against him anymore than they would some pundit saying they were overvalued.  In fact on Wall Street many analysts do consider the stock overvalued compared to the metrics of the company.  They’re firing a warning shot over his bow to keep him in his lane.



#21 TomNokoe

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Posted 24 January 2023 - 17:54

MBS gets a bad rep but I don't think he's done anything too wrong here

#22 pdac

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Posted 24 January 2023 - 17:56

I remember saying in some other thread that if MBS starts to pick fights with the FIA and the teams that he'd be ousted. I think this is the first warning shot. Liberty will NOT sue the FIA, but the thought of such action will prompt those with power and influence within the FIA to question whether MBS is the man they want at the top.



#23 KWSN - DSM

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Posted 24 January 2023 - 17:56

The Teams in general are dumb to how they should behave with and around F1.


Edited by KWSN - DSM, 24 January 2023 - 17:57.


#24 Nathan

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Posted 24 January 2023 - 18:03

Now F1 has become a cash cow, everybody involved wants a piece of it - greed brings about the end of most nice things. 

 

Same oldprediction from the boom times of the mid 90's, mid naughties and I'm sure was the case when Bernie began to professionalize in the 70's.


Edited by Nathan, 24 January 2023 - 18:05.


#25 BRG

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Posted 24 January 2023 - 18:04

How can they sue someone for expressing an opinion?  If Warren Buffett had said this, would they sue him?  


Edited by BRG, 24 January 2023 - 18:04.


#26 ckolcz

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Posted 24 January 2023 - 18:15

I personally love this. Finally someone bold enough to take a stand against these money grabbing wafflers. Fair play.

#27 pRy

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Posted 24 January 2023 - 18:25

How can they sue someone for expressing an opinion?  If Warren Buffett had said this, would they sue him?

 
Warren Buffet isn't the FIA President, he's a private citizen. So he may well express a personal opinion that F1's valuation is inflated. That's fine. But when the FIA President says it his words carry a lot more weight due to his unique position.
 
It would be like the current FIFA President announcing on Twitter that the Premier League in the UK is overvalued just prior to them selling their TV rights.



#28 JordanIreland

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Posted 24 January 2023 - 18:38

MBS gets a bad rep but I don't think he's done anything too wrong here


He is 100% on point. If a group was to pay 20 BILLION (USD) for f1, how will they make that money back?

The fans.

So the FIA is defending the fans.

#29 JordanIreland

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Posted 24 January 2023 - 18:40

*Sigh*

I'm probably in the minority - but I'm firmly "team FIA" on this. Yes, they don't get everything right, and yes there's certainly lots of things about the FIA that could be improved. Is MBS the right person for President? Jury's out.

However, I do think that F1 needs the FIA more than it realises, to keep the sport in check and prevent it from its worst excesses. The inmates can't be running the asylum. It's becoming ever clearer that with the explosion in popularity the sport has had in recent years, there are plenty of people in F1 who care more about how that can benefit them financially, rather than necessarily what's in the best interest of the sport. I mean, that's evident enough with the whole Andretti thing.

It seems more and more likely that F1 could break away from the FIA, or maybe there will be some self-destructive break-away series idea again, but I genuinely fear for the future of F1 without the FIA involved.

In fact, I'll go further, and say that without the FIA, I could easily see F1 ceasing to exist within 5-10 years. It won't be electric cars or environmental concerns that kills F1, it'll be needless greed and self-interest.


I concur 100%. Greed left uncontrolled would destroy F1.

#30 pRy

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Posted 24 January 2023 - 18:41

He is 100% on point. If a group was to pay 20 BILLION (USD) for f1, how will they make that money back?

The fans.

So the FIA is defending the fans.

 
Great so when is the FIA buying F1 and giving it back to the fans?   :rotfl:

#31 pup

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Posted 24 January 2023 - 18:53

How can they sue someone for expressing an opinion? If Warren Buffett had said this, would they sue him?

Warren Buffett isn’t barred by law from interfering in F1’s commercial rights.

Not to mention the conflict of interest here, with the potential buyer having just a wee bit of influence over Sulayem.

As for the deal and its price tag, let’s not forget that the real MBS wants F1 as a centerpiece for Neom. Money isn’t an issue and arguably from a financial standpoint, a Saudi purchase would probably relieve the sport of a lot of debt and the high valuation has potential to be reflected in the teams’ sponsorships. Arguably. Finances aside, imo it would be disastrous from a PR standpoint.

#32 Pingu Pi

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Posted 24 January 2023 - 18:54

I find it rather refreshing to see MBS stand up to the F1 bullies in the paddock.

With MBS on a couple points of late. There's some collective greedy walls going up in F1 at the moment that I'm not fond of...

The 'Andretti/New Teams'saga and 'Sprint races to sell more advertising space' both absolutely stink of greed.

Edited by Pingu Pi, 24 January 2023 - 18:55.


#33 RacingGreen

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Posted 24 January 2023 - 18:55

How can they sue someone for expressing an opinion?  If Warren Buffett had said this, would they sue him?  

 

Because of the connection between FIA and FOM MBS will be assumed to be expressing an opinion based on inside knowledge not commonly known on the stock market, knowledge that even the Warren Buffett's of the world do not have access to. So no, Mr Buffett can say what he likes as long as he doesn't have an inside source, but MBS is an inside source and the market is likely to react accordingly and jeopardise other commercial contract negotiations detrimentally..


Edited by RacingGreen, 24 January 2023 - 18:58.


#34 RacingGreen

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Posted 24 January 2023 - 19:01

With MBS on a couple points of late. There's some collective greedy walls going up in F1 at the moment that I'm not fond of...

The 'Andretti/New Teams'saga and 'Sprint races to sell more advertising space' both absolutely stink of greed.

 

Is it greed to exploit commercial rights that you have paid for if when calculating the price of the rights it was assumed that you would exploit those revenue sources in the future ? There's a very fine line here between greed and value.


Edited by RacingGreen, 24 January 2023 - 19:02.


#35 Hellenic tifosi

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Posted 24 January 2023 - 19:11

I never expected me to say so, but I have warmed up a lot towards MBS lately.



#36 Primo

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Posted 24 January 2023 - 19:12

*Sigh*

 

I'm probably in the minority - but I'm firmly "team FIA" on this. Yes, they don't get everything right, and yes there's certainly lots of things about the FIA that could be improved. Is MBS the right person for President? Jury's out. 

 

However, I do think that F1 needs the FIA more than it realises, to keep the sport in check and prevent it from its worst excesses. The inmates can't be running the asylum. It's becoming ever clearer that with the explosion in popularity the sport has had in recent years, there are plenty of people in F1 who care more about how that can benefit them financially, rather than necessarily what's in the best interest of the sport. I mean, that's evident enough with the whole Andretti thing. 

 

It seems more and more likely that F1 could break away from the FIA, or maybe there will be some self-destructive break-away series idea again, but I genuinely fear for the future of F1 without the FIA involved. 

 

In fact, I'll go further, and say that without the FIA, I could easily see F1 ceasing to exist within 5-10 years. It won't be electric cars or environmental concerns that kills F1, it'll be needless greed and self-interest. 

I agree with MBS on the principles etcetera, but he has no right to put his opinions in between business deals in which he has not part. Is it even FIA's opinion or his own? Are he really voicing his concerns or is it an attempt to lower the price tags for his friends? Yes, I admit I have very little confidence in that there's bo corruption behind his appointment. 
I hope Liberty's lawyers makes quick meal of him, a $100 million fine sounds reasonable.

If he really cares, the only way is for FIA to buy it back because before the 100 year lease is over, the rights will have been bought and sold many many times. They cannot sell the cake and... well, decide who can eat it.



#37 jonpollak

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Posted 24 January 2023 - 19:21

If this battle goes on for the whole year I’ll bet it will drive the valuation down. Think about that.
Jp

#38 Primo

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Posted 24 January 2023 - 19:25

Indeed.

 

If this battle goes on for the whole year I’ll bet it will drive the valuation down. Think about that.
Jp

 

 

Are he really voicing his concerns or is it an attempt to lower the price tags for his friends? 



#39 Clatter

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Posted 24 January 2023 - 19:29

Presumably if they sue then the books will be trawled over in minute detail. The result in court might backup MBS opinion.

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#40 Pingu Pi

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Posted 24 January 2023 - 19:52

Is it greed to exploit commercial rights that you have paid for if when calculating the price of the rights it was assumed that you would exploit those revenue sources in the future ? There's a very fine line here between greed and value.


For me it's how I see the sprints, they don't bring entertainment value beyond the original format and actually detract from it for me by just offering the good teams and drivers chance to make up for mistakes in qualy.

In its current guise appears very much like a half arsed attempt to just sell more tickets, advertising slots and having sprint sponsors.

#41 Dolph

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Posted 24 January 2023 - 20:05

Presumably if they sue then the books will be trawled over in minute detail. The result in court might backup MBS opinion.

 

 

Wouldn't it be suffiecient to just point at the market cap of 16 billion (like someone mentioned) and say: "I based my estimate of 20 billion as too high value on the market price of 16 billion"? How do you counter that? A judge would through that out immediately.



#42 pdac

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Posted 24 January 2023 - 20:06

Presumably if they sue then the books will be trawled over in minute detail. The result in court might backup MBS opinion.

 

Which is exactly why it will not end up in court and, rather, MBS will be ousted from his position. You only get to that position because you have friend and when those friend turn on you, you quickly lose the position. You only have to see what has happened in UK politics recently to understand that. I am convinced that he will either shut up now or there will be a lot of people out to discredit him.



#43 alframsey

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Posted 24 January 2023 - 20:17

I am no fan of MBS, not by a long shot, but I also don't think the sport is in the right hands if its sold to the Saudi's. 



#44 Primo

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Posted 24 January 2023 - 20:24

Presumably if they sue then the books will be trawled over in minute detail. The result in court might backup MBS opinion.

That's impossible. It is an opinion. They cannot start going through books to prove someones opinion of a products future value to be right or wrong.


Edited by Primo, 24 January 2023 - 20:25.


#45 YorkF1Fan

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Posted 24 January 2023 - 20:24

Wonder if Netflix will have a special DTS series about the upcoming war between FOM vs FIA and MBS??



#46 blackmme

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Posted 24 January 2023 - 20:47

If this battle goes on for the whole year I’ll bet it will drive the valuation down. Think about that.
Jp

Hmmmm, I think I can see what you are hinting at. I hadn’t thought of that at all but then again it would be entirely within the spirit of the whole saga wouldn’t it?

 

Regards Mike



#47 taran

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Posted 24 January 2023 - 21:18

According to Dieter Rencken, the FIA needs to approve any buyer of the commercial rights and may veto any potential buyer who is not considered “a fit and proper owner”.

 

So they actually have quite a lot of power over any sale. Proving Saudi Arabia is not a fit and proper owner may be a tad awkward but certainly doable considering its standing in the world.

 

 

https://racingnews36...e-of-f1s-rights



#48 TecnoRacing

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Posted 24 January 2023 - 21:21

I have very little trust that MBS/FIA do not have ulterior motives here.



#49 pdac

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Posted 24 January 2023 - 21:30

According to Dieter Rencken, the FIA needs to approve any buyer of the commercial rights and may veto any potential buyer who is not considered “a fit and proper owner”.

 

So they actually have quite a lot of power over any sale. Proving Saudi Arabia is not a fit and proper owner may be a tad awkward but certainly doable considering its standing in the world.

 

 

https://racingnews36...e-of-f1s-rights

 

That sounds odd. I thought the settlement with the EU was to entirely separate the two entities. So I find it odd that the FIA would have any say in the sale of the commercial rights. But it could be. Surely though, if true, that would dramatically affect the value of FOM (negatively). Who would want to pay top $ for something that they cannot sell on to anyone without the OK from someone else.


Edited by pdac, 24 January 2023 - 21:31.


#50 Sterzo

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Posted 24 January 2023 - 21:56

It's pretty obvious the governing body of a sport does have grounds for taking an interest in the ownership of the commercial rights. Two quotes from Ben Sulayem: “It is our duty to consider what the future impact will be for [F1] promoters in terms of increased hosting fees and other commercial costs, and any adverse impact that it could have on fans.” He also said a potential buyer of F1 should "come with a clear, sustainable plan - not just a lot of money".

 

How can you govern a sport without caring about those things? Basically, if someone buys it at an excessive price, they'll wreck the sport trying to get their money back. It's clear that the FIA should be involved.