Formula 1

Bernie Ecclestone and F1 teams clash amid 'cartel' claim

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Tensions are rising in the Formula 1 paddock as Sauber, Lotus and Force India are set for talks with CEO Bernie Ecclestone.

The meeting comes in response to an explosive letter penned by Force India's deputy team boss Bob Fernley - the man at the forefront of the rebelling teams push for greater influence in the decision making process - calling for a re-evaluation of how Ecclestone distributes the sport's income.

Upping the stakes

It has been a battle led for quite a few weeks now following the demise of Marussia and Caterham from the F1 grid, and while the latter will participate in this weekend's season finale in Abu Dhabi the fate of those teams, and some of the more established outfits in the future, remains unclear.

In the new letter, seen by respected journalist Joe Saward on Tuesday, the three teams upped the stakes by raising the question as to whether a 'cartel' was in operation comprising of Ecclestone and the five top teams in the sport.

That kind of talk could trigger an investigation by the EU Commission, who have investigated the sport before, but the teams associated with the letter also said that was not their aim.

V6 switch the heart of financial issues

It revealed how the costs of Formula 1's switch from V8 to V6 hybrid power units had required almost all of the funds which they currently earn from the percentage income they receive from Formula One Management (FOM).

Together the three teams earned between $52 million and $64 million from the prize pot last year but “the costs of the power unit together with the installation costs amount on average amongst us three to $43 million," the letter read.

"This clearly shows that 70-80 percent of the FOM income has to be allocated to the engine.”

The letter added that the sport's two highest earning teams, Ferrari and Red Bull, received around $160 million and that this from year's prize fund (an estimated $835m) around 50% will be given to Red Bull, Ferrari, Mercedes and McLaren.

FIA credible governors?

There was also an attack on the credibility of the FIA to govern the sport and particularly on the issue of cost-cutting, something the governing body has tried to implement twice, including earlier this year, before backing down.

“Whilst the FIA are involved in The Strategy Group [a group of five teams, the FIA and Ecclestone who determine the future rules of F1], they are impotent to act, as demonstrated in the recent cost control process which saw the FIA issue a media statement confirming their intent to impose cost controls and their subsequent climb down when over ruled by the CRH, Red Bull, Ferrari, Mercedes, McLaren and Williams.”

Top teams created a 'questionable cartel'

Therefore the three teams said that they saw no other option but to call for a rethink of how the sport distributes its funds in a bid to secure the future of those for whom F1 is their only business, rather than just a part of a portfolio.

“We cannot accept the current distribution of funds in view of the massive increase of expenses. We understand that the distribution is based on our bilateral agreements. It is, however, known to us all under which circumstances we signed these deals," the letter continued.

"The shareholder’s focus during the negotiations was on securing the co-operation with big teams in view of the planned IPO; we were effectively given no room for negotiation."

"Furthermore, the impact of providing various share options to key people and entities may well have clouded their judgement in respect of creating what is effectively a questionable cartel comprising, the Commercial Rights Holder [Ecclestone], Ferrari, Red Bull, Mercedes, McLaren and Williams, controlling both the governance of Formula 1 and apparently, the distribution of FOM funds."

Ecclestone resolute

It is understood Ecclestone has agreed to a request for further talks this weekend at Yas Marina, but in response to the 'cartel' claim had some harsh words for Fernley and other team bosses.

"I hope he understands what the definition is of a cartel, and if he does, how he could believe there is a cartel," he told PA Sport.

"He (Fernley) is talking complete and utter rubbish," he added. "This is the problem we get into in meeting with these team principals, or managers - they don't know what they're talking about."

"He (Fernley) is talking complete and utter rubbish" - Ecclestone

Need to find common ground

Indeed the 84-year-old continues to reiterate his position that those teams now calling for change agreed to their current deal with FOM and that it is their business approach that needs to alter.

"What we don't have any control over is how much they want to spend. That's the problem," he said.

"It doesn't seem like they've followed a normal business route."

It's a debate that now looks set to dominate the F1 news wheel over the winter, as both sides seem less willing to compromise now than at any point so far. Certainly there is a need for change by all parties because each other's points are vindicated, but it is finding common ground that will be the hardest.

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