This may very well turn out to be the biggest week in MotoGP since the decision to replace the two stroke 500s with large capacity four stroke machines. This week, Dorna CEO Carmelo Ezpeleta is set to have meetings with each of the MSMA members at Motegi, to hammer out once and for all the technical basis for the 2014 season. If they succeed, the ground will be laid for a set of technical regulations which can remain stable for the long term, the goal being at least five years. If they fail, then one or more manufacturers could leave the series, reducing the number of factory bikes on the grid and potentially removing two of MotoGP's top riders from the grid. There is much at stake.

So much, in fact, that neither side looks prepared to back down. On the one side is Dorna, who see the costs of the championship spiraling out of control thanks to the increasing sophistication of the electronics, and the racing growing ever more clinical as fewer and fewer riders are capable of mastering the machines these electronics control. On the other side are the factories, for whom MotoGP, with its fuel-limited format, provides an ideal laboratory for developing electronic control systems which filter through into their consumer products and serves as a training ground for their best engineers. Dorna demands a spec ECU to control costs; the factories, amalgamated in the MSMA, demand the ability to develop software strategies through the use of unrestricted electronics. The two perspectives are irreconcilable, at the most fundamental level.

An Unstoppable Force

The tone of the debate has not helped. While Carmelo Ezpeleta has spoken of seeking a solution through dialogue and of conversations taking place in an amicable atmosphere, his tone when speaking in private is implacable. When Suzuki told Ezpeleta they would like to return to MotoGP in 2014, but would not if he imposed a spec ECU, he is reported to have told them "In that case, don't come." His logic is simple: when Suzuki asked for an exemption to the rookie rule so that they could sign Alvaro Bautista, on the grounds that they did not have a satellite team, Ezpeleta allowed it. When Suzuki asked for more engines in the first year of the allocation rules, they had their allocation upped from six to nine, in no small part thanks to the lobbying of Ezpeleta. As reward for his efforts, Suzuki cut back their MotoGP bike from two bikes to just one the next season, before pulling out altogether at the end of 2011.

When Honda tell Ezpeleta that a rev limit and spec ECU is unacceptable in MotoGP, he asks them why they are such strong proponents of the idea of a rev limit and spec ECU in Moto3, yet reject proposals for an identical system in MotoGP. The deal Dorna made with the factories at the beginning of the MotoGP era was that the MSMA would be allowed to make the rules if they promised to fill the grids. His faith in that deal has proven to be at best naive, as the factories have gradually either left the series or raised lease prices to unaffordable levels. Dorna subsidizes the factories twice: once directly, paying the factories a substantial sum - "more than a title sponsorship!" he told me at Assen this year - for their participation in MotoGP, and then a second time indirectly through subsidies to the satellite teams, which they need to be able to afford to lease the bikes from the factories.

Vicious Circle

Looked at from that perspective, Dorna's subsidies have actively helped to drive up the cost of MotoGP. The R&D efforts of the factories have been supported financially by the Spanish organizer of MotoGP; that R&D has improved the bikes, but made them more expensive; as a result, the satellite teams have had to ask for more subsidy from Dorna to allow them to continue competing; with more of their costs covered, the factories can pour more money into developing the bikes further, driving the costs up even further. The total amount a factory like Honda receives from Dorna is probably less than a third of their total MotoGP budget, but it is still enough to provide a strong incentive to continue to pursue R&D.

Seen from the viewpoint of the factories, they are not sure that they can afford to go racing if electronics are restricted. A manufacturer goes racing for two reasons: as part of their global marketing efforts to promote their brand as glamorous, high performance and technologically advanced; and to develop technologies which will help increase sales to consumer markets in the future. Every year, the racing department faces a tense meeting with the board of the company to explain why they need such a massive chunk of cash - Dorna subsidy or no Dorna subsidy - to jet off around the world and play at racetracks at corporate expense. The promise of increased sales and brand exposure in key markets such as Southeast Asia helps quell part of such interrogation, but the argument of a platform for their research and development proves to be a compelling one in persuading company executive boards to keep going racing.

The Pursuit Of Knowledge

The expertise gained from racing is also in areas key to consumer markets. MotoGP's fuel-limited formula means that much of the focus for electronics developers goes into working on strategies to save fuel in as many areas as possible, while preserving the best possible throttle response, especially at part throttle. The aim is to make the throttle response feel as natural as possible, provide acceleration which is as smooth as possible while still being as strong as the traction will allow, and reduce fuel consumption to the absolute minimum. All three of these areas transfer readily to production bikes and provide compelling sales arguments to consumers. That, in turn, helps persuade sceptical company executives that there is more return on their investment than just air miles on the corporate airline loyalty account.

Carmelo Ezpeleta is fully aware of these arguments. He has heard them many times over the years, but has grown impervious to them. After seeing the factories drive the championship down a financially unsustainable dead end, he has decided to call their bluff. What do the factories really gain from MotoGP? Do they really need the R&D to justify their racing programs, or does the exposure and branding provide sufficient return on investment to ensure their continuing commitment to the series?

An Immovable Object

HRC Vice President Shuhei Nakamoto - the de facto head of the MSMA, even though Takanao Tsubouchi is nominally in charge, as the other Japanese factories have always gone along with Honda's wishes - has been equally implacable. If they are not free to develop software strategies in their electronics systems, then racing in MotoGP has no added value, and they will withdraw. Imposing a spec ECU merely raises costs, Nakamoto says, requiring a massive investment to understand the new ECU and hack their way around the standard software. Honda does not believe in racing in a series which imposes such restrictions.

So will the factories knuckle under and accept the spec ECU? Or will Carmelo Ezpeleta back down and allow the factories to continue to develop their own software at least, compromising on standard hardware but unrestricted software?

Dorna and the factories have got themselves into a Mexican standoff, a situation where nobody dare back down and can only end in bloodshed. So much has been said on all sides that it is impossible to see one or the other side giving in. The first party to flinch will have lost, not just this argument but every argument into the foreseeable future. If Ezpeleta gives in, he will remain a hostage to Honda for as long as they remain in MotoGP, while if the factories accept this, then the acknowledge that they no longer have any control over the series. They become like any other team in MotoGP, with the ability only to advise, not to steer.

Showdown, And I Don't Mean BSB Style

From all that I have learned, Carmelo Ezpeleta looks to be the party most set on sticking to his guns. Conceding to factory demands that they be allowed to develop their own electronics will not guarantee they will remain in the sport in the long term. Indeed, if the economies of Europe and the US continue to stagnate, Honda, Yamaha and Ducati could decide to withdraw from MotoGP anyway. Honda came within a single board meeting of pulling out of racing altogether at the end of the end of 2008, and only their long tradition of racing in the spirit of their founder, Soichiro Honda, kept them in the sport. It is not an impossible scenario for Dorna to retain free electronics for the 2014 season, only to see Honda and Yamaha pull out before the season starts anyway, citing economic difficulties. Just as Suzuki did at the end of 2011, and just as Kawasaki did two years before.

If Ezpeleta digs his heels in, Nakamoto will find it very difficult not to pull out. Such strong statements have been made to the media that his credibility would be sorely tested. Nakamoto has proven to be a canny and extremely successful leader since he took over Honda's MotoGP program at the end of 2008 - indeed, some claim he was instrumental in saving it. Yet he finds himself in a position where his hand may be forced. The most likely scenario is not just that Ezpeleta will impose a spec ECU, but also that the software will be completely closed, with teams and factories only able to develop fuel maps, rather than traction control strategies. The miserly 21 liter fuel limit will almost certainly go as well, increased to 24 liters in line with the CRT machines, and a necessary prerequisite to imposing a standard electronics package.

The last time Honda pulled out of Grand Prix racing, in 1968 (over technical restrictions imposed to cope with an arms race that ironically brought us some of the most spectacular machines in history) the series suffered a massive blow. And given Honda's dominant position in the Grand Prix paddock, a similar disaster might be expected. Honda don't just put four MotoGP bikes on the grid, they also supply the engines for Moto2 through Geo Technology, as well as a large part of the Moto3 grid with their NSF250R motor. They also have two of the biggest names in racing on their books, current title challenge Dani Pedrosa, and upcoming talent Marc Marquez, whom they could ban from racing, though having to pay them very handsomely for the privilege.

Life After Honda?

Yet the impact of a Honda withdrawal may not be as large as feared. If Honda goes, there is a good chance that Yamaha might follow, but Ducati will stay. If Yamaha leaves, MotoGP will be completely gutted, as only a single manufacturer would look rather too threadbare. However, Yamaha have always said that they will only go racing if they have someone to race, and if Ducati stay - and Suzuki enter - then there is every reason to believe that Yamaha will remain in the series as well. And while holding Dani Pedrosa to his contract should be relatively easy - Pedrosa has repeatedly said he did not expect to be racing for many more years - keeping Marquez off the racetrack could prove impossible. The young Spaniard has too much ambition to sit out a year or two, and too much talent for another factory to pass up the opportunity to pay off the penalty clause in Marquez' contract and pick him up.

Honda leaving Moto2 would appear to be a mortal threat to the class, but Ezpeleta has made it clear he does not fear such a move. If Honda decide to pull out, Ezpeleta has said, he will simply go to the nearest Honda dealer, order forty CBR 600 engines, and hand them out to the Moto2 teams. Honda have already lost some of their grip over the Moto2 class, as Geo Technology - closely linked to HRC - have lost the contract to prepare the Moto2 engines to the technology park at the Motorland Aragon circuit. Motorland Aragon is charging a very great deal less to prepare the engines than Geo Tech did, and is much more willing to listen to and work with Dorna.

A Highly Profitable Petard

That leaves Moto3. If Honda were to pull out of that class, it would gut the field. The problem is that the way the new class has been set up, it is very difficult for Honda to pull out altogether. The bikes have been sold, and while Geo Technology has been given the contract by Honda to develop the engines, there is no reason why that role could not be taken on by another supplier, completely independently from Honda. The bikes, after all, have been sold, not leased, and already the numbers sold are in the hundreds, to be raced in series around the world.

What's more, the Moto3 class has proven to be rather lucrative for Honda. Unlike MotoGP, production runs are large enough for it to be a profitable venture. Honda is making money from its NSF250R racebike, and so instead of causing the class to collapse, pulling out of Moto3 would actually hurt Honda more than it would damage Dorna.

Honda's last avenue of escape was closed off last week. Private equity firm Bridgepoint, which owns both Dorna and Infront, parent company of the World Superbike series, last week put Dorna in charge of both MotoGP and WSBK. Honda's threat to withdraw from MotoGP was always backed by an implicit threat to switch to WSBK, where they would be free to develop electronics as they saw fit.

Game Changer

It would have proved highly rewarding for Honda. The new V4 sportsbike which Honda will introduce in 2014 has all the makings of a bike which will dominate World Superbikes. The bike had initially been leaked as a production racer version of the RC213V, a cheaper version to be sold to private teams in MotoGP as an alternative to CRT machinery. Whether Honda actually ever had any intention of building a pure production racer is unknown, but it is becoming increasingly clear that a roadgoing version for homologation purposes had been planned all along. That bike will form the backbone of Honda's increased involvement in World Superbikes, and will be a title contender from the very moment it hits the track.

However, with Dorna running World Superbikes, it is inconceivable that electronics development will continue without some form of restriction. The most likely scenario is that a spec ECU will be imposed on that series too, most probably at the same time (and possibly also the same unit) as the unit to be used in MotoGP. Any factory withdrawing from MotoGP over the imposition of spec electronics will have little credibility if they then switch their attentions to World Superbikes where the same restrictions apply. What's more, Dorna could simply refuse the entry of a factory which had deserted MotoGP, even though such an entry might be made under the guise of a supposedly independent team with a long history in World Superbikes.

End Game

How all this will play out remains to be seen. News will start to emerge after the first meetings this week, but we will only really know the outcome once the minutes of the Grand Prix Commission, due to be held at lunchtime on Saturday, are published. If those minutes contain new regulations for 2014 including a spec ECU and a rev limit, then Carmelo Ezpeleta will have stood his ground and won. If they contain nothing of real significance, then Ezpeleta will have backed down under pressure from Honda.

Carmelo Ezpeleta and Shuhei Nakamoto will be calling each other's bluff this week at Motegi. Right now, it is hard to see who holds the stronger set of cards, both men having very strong hands. By Saturday, though, they will have to lay their cards on the table, and we will get to see who blinked and who didn't.