Doug Nye: ‘F1 teams have been arguing over promoter fees for decades’

Motor sport’s governing body used to be the FIA’s Commission Sportive Internationale – or CSI. Over many years it came in for a few brickbats from unhappy constructors and entrants, and one such spat erupted pretty much behind the scenes at the turn of 1972/73.

In that period of oil crisis, recession and economic inflation – sound familiar? – the emerging Formula 1 Association really began to make its mark, thanks largely to very new members Bernie Ecclestone of Brabham and Max Mosley of March. The issue was a money-terms dispute with the circuit owners/race promoters, which had led to them persuading their friends on the CSI – whose members were elected by national motor clubs including effectively all the Grand Prix race organisers – to suggest including ‘cheaper’ Formula 2 and 5000 cars to bolster F1 GP grids through 1973. When this was announced on December 6, 1972, it hit the F1 Association as a real shock.

Recently, in a long-buried F1CA archive, I found this explanatory context review –probably from Max: “…in June 1972, the association reminded the race organisers that the amount of payment received by entrants was hopelessly inadequate to cover the cost of competing and a substantial increase was needed for 1973…No offer of any kind was received from the organisers.

“In November, Grand Prix International was formed, which effectively joined together the European circuit owners into the one single body which the association has been seeking since 1970. However, on December 6th, without discussion, GPI issued an ultimatum requiring constructors to accept an increase of 12½% by December 14th ‘or else’ they would apply to the CSI to allow Formula 2 and Formula 5000 cars to run in Grand Prix events.

“The CSI then acted as arbitrators between GPI and the F1 Association. Just after Christmas 1972 the GPI offered £52,000 for each event with the constructors requiring £85,000 to retain a viable interest in the 1973 season. The constructors, however, made a proposal aimed at sharing the problems jointly. They proposed to reduce their payment levels to £68,000 and invest further finance promoting each and every event with their cars and their drivers…”

“It has been pointed out that the growth in the number of competing Formula 1 cars must prove that the present financial structure is sound. It has also been argued (by GPI) that the large sums paid to drivers prove the teams are adequately financed.

“Actually, in 1972 only two of the ten entrants’ [earnings] were profitable and for 1973 one team has withdrawn and two more have announced severe curtailment of their programmes. Moreover, only a few star drivers are highly paid – many of the lesser drivers pay…by bringing a sponsor to the team…” – and so on.

The ’73 season went ahead without F2/5000 dilution, but as global recession progressed, and some currencies devalued – significantly, Sterling – on July 16 then still new but increasingly influential member Bernie Ecclestone penned this Association circular, making his position quite clear:

“Member Bernie Ecclestone made his position quite clear”

“Dear Brethren, we have reached, what I thought to be at the time, satisfactory agreements for a three-year period with all the European countries except Spain on a basis of £65,000 Sterling with escalation clauses for the two subsequent years of 7½% plus the EEC Cost of Living Index. Everyone agreed to this and in fact, thought it was impossible to obtain. It is quite obvious now, in the light of currency dramas over the last three weeks, that we would have been marginally better off to have accepted the 475,000 Swiss Francs that we were originally offered. However, in our wisdom…” – he wrote, sarcastically – “…we decided to decline this. Negotiations therefore took place with Sterling as the base currency… and as we had obtained at the time in some cases an increase of 45% over the previous year, also with 90% of the teams based in England, there was little [alternative] argument in our favour.

“You will remember it was Max and myself that wanted to stick out for $800,000 and I am sure time has not erased the memories of the members present at a meeting we had at the Racing Car Show, when… some…reluctant members thought we were demanding too much…[but]…I am perfectly sure in my own mind that anyone far-sighted enough to know the Swiss Franc, Deutschmark, etc, would be as firm as it is today…would more than cover the unfortunate decision made by the less knowledgeable…members.

“If there are any…dissatisfied with the…negotiations, they could only be the ones that urged for us to accept much less than the £65,000 which the majority agreed we would hold out for – even to go as far as not participating in the races… I trust this clarifies the position to anyone who is interested but has been unable to attend meetings.

“Your obedient servant, Bernard Ecclestone.”

Fifty years since and fissures still remain between those who put F1’s actors on the stage – and those who provide it.

Doug Nye is the UK’s leading motor racing historian and has been writing authoritatively about the sport since the 1960s