The expense of Formula 1 has been a big topic for the last few years and with and 800% increase since the 80’s, it’s easy to see why the concern over costs continues to be at the top of every F1 Strategy Group meeting.
The fact is, F1 has two identities—the one from within the paddock and the one from without. What fans see is a markedly different version of F1 than what the pundits see. Then there is the F1 Strategy Group and they may see something very different than paddock pundits not fortunate enough to sit at the table.
Teams spend what they make and a 25-person operation in the early 80’s is now a 900-person juggernaut. Why? Because they can. They generate enough revenue to hire 900 people and make a business out of their effort to go racing.
It’s often been said in the US that one doesn’t enter racing to make money but to spend it. That may be true but Chip Ganassi has done well for himself and so has Roger Penske. F1’s small teams are clinging to existence in order to subsidize the big teams and in return, the big teams claim more and more prize money through bi-partite agreements with Formula One Management. Even the FIA came hat-in-hand to get their share of the F1 rice from the bag dropped serendipitously off the back of the aid/relief truck for stricken industries.
The series has ushered in new technologies that have been met with mixed reviews. High degradation tires, DRS, and hybrid engines were intended to improve the sport but to a large extent, it has merely cost the sport more money. The hybrid engine supply for smaller teams has bankrupted Caterham and Marussia and these two teams entered F1 under the promise of a cost-cap that never came.
The man who promised this cost-cap, former FIA president Max Mosley, is now advocating a radical change in F1. It’s nice to hear his opinion as his successor has been as quiet as a church mouse since taking the helm of the FIA. Mosely reckons you have to shake things up in order to get teams on board.
Mosley told German magazine Auto Motor Und Sport that free rules should be offered to teams who sign on to a budget cap. You sign up committing to a budget cap, you have free rules to make any car you’d like so long as it meets safety requirements and length measurements etc.
Mosley reckons the teams would realize that you can have great racing and technically advanced cars for a budget of $100 million. While I agree that a free-range F1 would be an interesting approach and most likely garner the attention of men like Adrian Newey, it must be said that the reduction of team budgets would leave more revenue in the system and the current owners need to have a serious plan for the future of the sport instead of just skimming the profits for big returns.
The plan has to be holistic in nature and should include the FIA, FOM and teams. CVC Capital have been anemic in any attempt to show organized planning for the series moving forward so perhaps Mosley’s system would work but it would be difficult if CVC wasn’t on board or willing to re-invest in the series.
All this is academic, however, as self-preservation will rule in F1 until such time as the revenue stream dries up or the bi-partite agreements expire between the teams and FOM.
At this point, I say mix F1 up with multiple engine specifications and build a low-budget formula to allow small teams to compete with the big teams who have captured the lion’s share of the prize money. Remove the subsidizing feature of the system and the big teams will be willing to talk. F1 needs a healthy middle class to keep balance and efficacy in the system.
This isn’t to marginalize the investments and contributions the big teams make to the sport. Big teams are definitely needed but as Mosely once reflected, trying to control costs through regulations is not very realistic. Teams will spend what they spend no matter what the regulations. That’s why he advocated a budget cap.
Another feature that has come forward since 2014 is just how important the engine is to the overall package and its ability to produce race-winning performance. Just three years ago, it was the black art of aerodynamics that made all the difference but now it’s the lump in the back of the chassis that is picking winners and losers.
The secondary element is the high degradation tires which, in this man’s mind, have run their course. It’s time to do away with tricky tires. With hybrid engines, reduced fuel loads and flow and HD tires, this series is a shadow of what made F1’s DNA and existence so compelling. Times change, sure, but F1 has to have a better answer than this. I’m just not sure giving the FIA a peek at their balance sheets is going to fly.
It annoyingly reminded me as I watched the 6-hours of Sebring WEC race that these cars are flat out for the entire race with a balance of power for classes and terrific racing. That’s an endurance series! F1 is acting more like a lift-and-coast, save the tires and fuel endurance series that the nationally renowned endurance series is.
What good is all this technology if it has outrun the very core reason the series exists? F1 has really impressive technology but is it a tech incubator or racing series first? I fear the change in F1 will only come with the implosion of its current business model and when teams are laying off employees, closing doors and rolling up their blueprints. The wave is with WEC and if F1 isn’t careful, it will find itself asking the WEC for a job.
Hat Tip: AUTOSPORT