F1: USF1 Punished by FIA as They Argue Their Lack of Money Was Bernie’s Fault

What Happens When It’s More About Deterrence

1:53pm EST — The FIA announced today that USF1 has “infringed the FIA International Sporting Code, the sporting regulations of the 2010 FIA Formula One World Championship and the obligations resulting from its entry in this Championship.”  According to the FIA press release,

In these circumstances, the Judging Body of the World Motor Sport Council has decided to impose the following sanctions against USF1:
– a fine of 309,000 euros (a sum equivalent to the Entry Fees for the Championship);
– the disqualification of USF1 (which definitively deprives USF1 of the right to take part, in any way whatsoever, in any competition);
– and the payment of the costs incurred by the FIA within the context of this disciplinary procedure.

It is interesting that the FIA has punished USF1, an entity that no longer seems to exist except possibly in incorporation documents.  As noted here at F1B, the contents of the factory and the material possessions of the team were auctioned off exactly two weeks ago.  The legal decision of the WMSC provides some of the more specific details of the situation, including dates when the team requested their entry deferral (February 25, 2010),  when they were told it could not be deferred for 2011 (March 3, 2010), the date USF1 was notified that the PIA president had initiated a Disciplinary Procedure (March 29, 2010), and USF1’s arguments as to why they ought not be punished for signing up and then not showing up for the 2010 F1 championship.  USF1 argued that

[USF1] submitted its application to participate in the 2010 Championship on 3 December 2008.  This was one day before Honda withdrew from Formula One.  USF1 highlighted that the cost cap proposal announced by the FIA caused an adverse reaction among the teams which contributed to a long, drawn-put negotiation of the 2009 Concorde Agreement, which was signed on 31 July 2009.  USF1 stated that it had contracted for significant sponsorship in the months following the signature of the 2009 Concorde Agreement, which included payments due in January 2010.  According to USF1, repeated press stories from parties affiliated with FOM cast doubt on USF1’s participation in the Championship.  As a consequence, USF1’s sponsors held back on their payments. [emphasis added]

USF1 went on to argue that those issues (the removal of the cost cap and greater technical freedom for smaller teams) as well as the negative press stories from those involved in F1 [cough. Bernie Ecclestone. cough.] were not their fault, and were “force majeure” or an act of God they could not control.  As such, USF1 argued that they made all efforts to appear, but “encountered several obstacles.”  While USF1 also claimed that they still had $26 million in sponsorship coming in, the FIA investigator found only $8 million in binding contracts (possibly that brought in by Jose Maria Lopez?) and the other money in non-binding contracts that ought not have been relied upon.

As for those pesky media statements, the FIA noted that they nor their agents made any of them, and for the more recent one highlighted by USF1 on December 22, 2009, “by which time, it might be suggested, with less than three months until the first race, there might well have been genuine doubt over the ability of USF1 to make the first race.”  The decision also noted that “force majeure” is explicitly defined, and “the lack of funds” does not fall under that category.  Ken Anderson, from the decision, appeared to have been present in Geneva for the hearing, as it states that “he said the team had lost of the order of USD20 million and he was adamant that he had done everything he could.”

In the end, the WMSC determined that

the Team, whilst well-intentioned, had displayed poor financial management and had underestimated the requirement to present an F1 car for the 2010 season in the time and with the financial resources available to them.  It was wholly unacceptable that the FIA was presented with only three weeks warning of the total non-appearance of the team at the Grand Prix of Bahrain and for the 2010 season, and WMSC members had real concerns about the impact on the Championship, not least the deprivation of the opportunity of another team to have provided two cars to urn in the Championship in 2010 instead of USF1.

The aforementioned sanctions were therefore imposed, not that they’ll do much good other than making other potential teams give more notice before they back out of competing in F1.  The most interesting part, though, was the reliance on blaming Bernie for the failure of the team financially.  Seemed a bit of a weak argument, really.  Though there is room for the team to appeal, it seems unlikely that they or Ken Anderson have the financial wherewithal to go through the courts further.


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