Rather than it being a side story to F1’s ongoing Netflix-era soap opera, it potentially marks the start of a change of dynamic in the way the championship is run.
While in public there has long been a united front between FIA president Mohammed Ben Sulayem and F1 CEO Stefano Domenicali, paddock regulars know that things have been different behind the scenes. Away from the spotlight of television cameras, microphones and journalists’ notebooks, tensions have been simmering away for months now.
Although many of the clashes of opinion between the FIA’s top man and chiefs at F1 owners Liberty Media were previously dealt with amicably behind closed doors without the need for dirty laundry to be aired in public, things have taken a big turn this week.
Indeed, F1’s angry letter to Ben Sulayem about his remarks of an ‘inflated’ $20 billion price tag for the series has effectively made, what one senior paddock source says, is now ‘open warfare’ between F1’s regulator and its commercial rights holder.
Power battle
This clash is a world away from the decades where the FIA and FOM were as thick as thieves. Indeed, it is the polar opposite to the time when then FIA president Max Mosley and Bernie Ecclestone era would collude to divide-and-conquer the teams.
Now we appear to be back to the kind of scenario from the early 1980s where there was a FISA-FOCA war – with Ecclestone on one side of the fence and FIA chief Jean-Marie Balestre on the other, with little common ground between them.
While the straw that broke the camel’s back was the way that Ben Sulayem spoke out about concerns over the rumoured $20 billion offering for F1 from the Saudi Arabian sovereign wealth fund, tensions between him and FOM have been steadily bubbling away for the last 12 months.
There has been a sequence of events and responses that have served to ratchet up the situation. Some of it is related to the governing body and the way it has been running F1’s regulatory matters. This includes what was felt to be an unsatisfactory response to the errors the FIA made at the 2021 Abu Dhabi Grand Prix, Ben Sulayem’s initial blocking of more sprint races being on the schedule for 2023, and unease about some of the race control decisions and rule enforcement last year (such as the Monza safety car and the Japanese GP points rule confusion).
There has also been angst in some quarters about the way that Ben Sulayem favours dealing with matters personally rather than using more typical presidential channels.
While it could be argued this personal focus can be a strength – like the way he spoke to all drivers and teams about the porpoising problem last year to formulate a response – there have been times when such an approach has annoyed those within F1, especially when he has not been across all the details of incredibly complex matters in front of him.
The FIA’s issuing of the record-breaking 2023 calendar press release with his quote before F1 knew it was going out, and that awkward on-stage moment with Red Bull boss Christian Horner at the FIA gala over the Japanese GP confusion, provoked some figures within the series.
But things have escalated dramatically in recent weeks thanks to social media posts on Ben Sulayem’s personal account. The first was criticising pushback over Andretti’s new team bid, even though current competitors had largely kept their views private on the matter. Now though, his remarks about the Saudi interest and a $20 billion price tag have proven to be a step too far.
The Saudi situation perhaps typifies all that paddock sources are uneasy about: Ben Sulayem’s need to make a strong personal response to a story that insiders suggest was wide of the mark and could be safely ignored. Rather than the Saudis having looked at buying F1, the trigger for the story was talks involving the Saudis around the time of the 2021 Italian Grand Prix to get involved in sponsoring grand prix racing, which did not come off.
Given that story has resurfaced now has all the hallmarks of a deliberate leak to try to get the $20 billion price tag figure out there. Who stands to benefit the most from it being talked about, and why now, is unclear...
F1 shareholders did gain though, with the share price of FWONA jumping by 7.8% from less than $59 on Friday before the Bloomberg story appeared, to hit a peak of $63.60 later that day before steadily slipping back. The share price lift also meant ultimately, a $20 billion price tag does not seem excessive, with the market cap of FWONA currently standing around the $16 billion level.
The team impact
While teams are currently sitting on the sidelines as observers of the battle between F1 and FIA, they are mindful about how things develop from here. At a time when F1 has been going from strength to strength with record attendances and earnings, a power battle at the top could serve as an unnecessary distraction.
Several sources Autosport has spoken to suggest that the goings on at the top are not something that has triggered alarm about potential damage to the teams or F1’s global image for sponsors and fans.
The teams’ lifeblood of commercial rights income should not be impacted by it and, even if relations between Ben Sulayem and FOM breakdown completely, the FIA’s governance structures should still allow the processes that FOM need (such as the running of weekends, approval of the F1 calendar, and sorting out of rule changes by the World Motor Sport Council) to go on.
Where they point to the biggest change coming is perhaps within the corridors of the FIA, depending on how Ben Sulayem’s action is viewed by those inside the governing body. FOM’s warning that the FIA could be ‘liable’ for damages caused by Ben Sulayem talking on commercial matters will not be lost on members – for government regulators do not take kindly to anything that unduly impacts company valuations.
Let’s not forget that Elon Musk was fined a total of $40 million back in 2018 by the Securities Exchange Commission (SEC) when he was accused of having misled investors over a Tweet that suggested he was considering taking his Tesla company private.
Furthermore, the FOM letter served as a reminder that the FIA had agreed long ago not to get involved with any commercial matters relating to F1.
As part of a sign off by the EU’s anti-cartel authorities back in 2001, it was made crystal clear about where the FIA’s control ended.
In the press release issued at the time by the European Commission, it stated: “The role of FIA will be limited to that of a sports regulator, with no commercial conflicts of interest.”
It added: “The FIA will, therefore, have no influence over the commercial exploitation of the Formula One Championship.”
Moving on
So what next? In the short term it will be interesting to see if Ben Sulayem stands firm on what he said, or apologises and changes his tact going forward. Longer term, it would be wrong to suggest that F1 will settle for nothing less than a FIA coup and someone else brought in to head the governing body.
However, what it most likely does want is some clearer definitions of spheres of responsibility from the governing body. In particular, in the way that things are handled going forward so Ben Sulayem does not act as a thorn in F1’s side in evolving the series the way it wants.
But, almost definitely, F1 will want guarantees that the FIA sticks to what it agreed with the EU decades ago: not getting involved, or trying to influence, any commercial matters.
Ben Sulayem himself has long insisted that he does not see big problems between himself and Domenicali. At last year’s Abu Dhabi Grand Prix, he said they speak every other day about matters.
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Last weekend, at the Monte Carlo Rally, Ben Sulayem again pointed out that things were good at the top – even though he knew there were times when F1’s promoter had to act in ways it felt was best.
“Yes, but the FIA has to do its job, also,” he said. “The good thing is that I have a good relationship with Stefano. Stefano comes from motorsport and the automobile industry, so that makes it easier for both sides to go forward. It is not something where you bring in somebody who has total commercial knowledge and [knows] zero about sport, no.”
Most pointedly, Ben Sulayem suggested that talk of friction between FIA and FOM had been the creation of the media.
“It was also the media that created [this],” he said. “When they say, ‘every time you do something to correct [each other], oh there is a split.’”
What F1’s letter to the FIA has shown is that the schism at the top is not a figment of journalists’ imagination. Instead, it is a real fight for control of F1’s future direction, and something that looks set to dominate the paddock agenda in the months to come.
