F1 could have fewer than 16 cars without affecting commercial agreements
The commercial agreements binding the FIA, the commercial rights holders, and the teams could survive with a grid of fewer than 16 F1 cars, without even having to impose a third car per team.
The number of cars on the Formula 1 grid could drop below 16 without affecting the agreements concerning the commercial rights of the discipline, according to some experts.
This information, revealed by Autoweek, comes from the journalist specializing in economic issues in F1, Christian Sylt. Following the financial difficulties faced by Marussia—ceasing operations since November—and Caterham—still searching for an investor for 2015—observers of the top-tier discipline have highlighted that if other struggling teams, such as Force India, Lotus, and Sauber, were to disappear, the contracts linking the FIA and Grand Prix organizers around commercial rights could be challenged.
However, this contractual stipulation would not appear to be an absolute obligation, according to reputable lawyers. Indeed, if the agreements are not public, the contract for promoting the European Grand Prix in Valencia became public domain two years after the last event in the Valencian harbor. It stipulates that F1 must make all reasonable efforts to ensure a grid of at least 16 cars. At the same time, the agreements between Formula 1 and the FIA indicate that the discipline must attempt to ensure that at least 16 cars participate in the world championship.
For Jonathan Lux, a London lawyer working in the motorsport industry, none of the contracts impose an absolute obligation on F1 to ensure a threshold of 16 cars. The contract concerning rights simply refers to trying to ensure it, not even requiring a reasonable attempt. Therefore, in principle, an attempt approaching a reasonable effort should suffice.
On Charles Braithwaite’s side, a collaborator at the law firm Collyer Bristow, he adds that the contract obligations regarding “reasonable efforts” to be implemented are not absolute. He continues: The burden is less than the obligation to employ “all reasonable efforts” or “best efforts,” two other frequently used terms. None imposes an absolute obligation.
In plain terms, if the situation arises, Bernie Ecclestone, president of the Formula One Group, would simply need to demonstrate that he has made reasonable efforts to try to provide a grid of at least 16 cars. Under French law, the Briton would therefore face an obligation of means rather than an obligation of result.
Then comes the question of the third car for certain teams. The contracts between the discipline and the teams stipulate that they may have to run a third car if the grid falls below 20 cars. At the end of the season, the grid fell to 18 cars, but another clause in these agreements, which allows a team to miss three GPs, did not make the implementation of a third car urgent.
This did not prevent discussions from taking place, with some small teams claiming they had been warned by email about the possible introduction of a third car within the Red Bull and Ferrari teams. However, these discussions and preliminary project outlines could be enough for Formula 1 to fulfill its obligation of means (the so-called reasonable efforts) to provide a grid of 16 cars contractually and thus avoid risking the end of the current contract, which runs until 2111.
