Top five F1 teams face legal suit

Formula One supremo Bernie Ecclestone (center) walks on the starting grid before the start of the Belgian F1 Grand Prix in Spa-Francorchamps, Belgium, Aug 23, 2015.
Formula One supremo Bernie Ecclestone (center) walks on the starting grid before the start of the Belgian F1 Grand Prix in Spa-Francorchamps, Belgium, Aug 23, 2015. PHOTO: REUTERS

Force India, Sauber accuse them of forming illegal cartel that distorts proper competition

LONDON • The biggest teams in Formula One face accusations that they are taking part in an "unlawful" cartel worth tens of millions of pounds, in a legal challenge that could change the face of the sport.

The charges have been brought by two of the smallest teams - Force India and Sauber - who risk the wrath of their more powerful rivals and F1's authorities by calling on the European Union (EU) competition commission to investigate.

The two teams filed a complaint in Brussels on Monday after months compiling a damning report accusing CVC Capital Partners, the private equity group that controls F1, of paying five teams - Red Bull, Mercedes, McLaren, Ferrari and Williams - more than £150 million (S$325 million) a year to buy their co-operation.

The teams have told the EU that Bernie Ecclestone's F1 group of companies, controlled by CVC, is abusing its dominant position in motor racing and has a responsibility not to distort competition.

It could be weeks before the EU decides whether to investigate, but the mood in Brussels is said to be for a clean-up of the sport after the scandals engulfing Fifa, football's world governing body.

The complaint comes in a period of unprecedented turmoil in F1, as teams argue vehemently over money and rules, which have created one of the most one-sided world championship seasons in history.

Mercedes lead the constructor standings with 506 points - 169 points ahead of second-placed Ferrari, while minnows Marussia are still to register their first point.

Renault, the French carmaker, stepped in on Monday to save the Lotus team from financial collapse.

Lotus were in the High Court threatened with administration over a tax bill of £2.7 million, but Renault says that it has signed a letter of intent to acquire a majority stake in the Enstone-based team.

It was a last-gasp move with money running out at Lotus, who would probably have joined the complaint to the EU but for their financial woes.

An EU investigation could have a seismic effect. One source said that Ecclestone may decide to put the £155 million of special payments to the five aside until the outcome is known.

Already, Ferrari faces the disruption of its planned stock market flotation in New York, because so much of its history is tied to the performance of its F1 team.

The Scuderia were paid more than £102 million last year - £29.3 million more than champions Mercedes. That included a £60 million premium payment on top of the scheduled prize money.

In total, CVC lavished £365 million on the five teams last year from a total prize fund of £538 million.

It is not just the money that concerns Force India and Sauber, but also the privileged position of the five teams, who sit on the rule-making F1 Strategy Group, alongside Ecclestone and Jean Todt, president of the International Automobile Federation.

"These teams can, therefore, steer the rules and technological developments to their own advantage, further entrenching their sporting chances, and undermining equality between the teams," a statement from Sauber and Force India said. "By locking in a permanent advantage for a select few teams, the sport has been gravely undermined."

THE TIMES, LONDON

A version of this article appeared in the print edition of The Straits Times on September 30, 2015, with the headline 'TOP FIVE F1 TEAMS FACE LEGAL SUIT'. Print Edition | Subscribe