Home F1 News Redline: FIA, teams agree to cost cap and more

Redline: FIA, teams agree to cost cap and more

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The FIA and Formula 1 teams have apparently agreed on the following issues for the 2020/2021 season. 

The World Motor Sport Council has approved by e-vote further changes to the Sporting, Technical and Financial Regulations governing the FIA Formula One World Championship primarily due to the ongoing need to reduce costs and safeguard the sport in light of the COVID-19 pandemic.

Following the initial agreement to postpone the 2021 Technical Regulations to 2022 (which was approved by the World Council on 30 March 2020), additional amendments to the Sporting, Technical and Financial Regulations for 2020, 2021 and 2022 have received unanimous support amongst the Formula 1 teams and were ratified today by the World Council.

The following is a summary of these changes:

Technical Regulations:

  • Freezing of a large list of components between 2020 and 2021. The list includes the chassis, gearbox, a number of mechanical components and impact structures. A token system has been devised to permit a very limited number of modifications in accordance to the competitors’ specific needs.
  • From 2020, limitations to Power Unit upgrades.
  • For 2021, changes to the plan-view trim and simplification of the floor ahead of the rear tyres in order to moderate the increase of downforce between 2020 and 2021.
  • For 2021, minimum mass increase to 749kg.

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This is an interesting freeze and I am curious how many token are issued per team and what it would allow the teams who aren’t using them to fit a new engine to do to their chassis.

Sporting Regulations:

  • For 2020, provisions for “closed” and “open” events and the relevant regulatory structure for each (e.g. personnel at the paddock), depending on whether such events permit spectators.
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    Wonder what those provisions are? Would be nice to see a list of initiatives or provisions currently being discussed for both closed and open door races.
  • For 2020, various updates relating to tyre regulations, with provisions to allow for tyre testing during Free Practice 2 should it be necessary to approve a new tyre specification by Pirelli and the extended use of P140 tyres in the case of a wet Free Practice 1 session.
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    This is a big issue as they are now retro-fitting the 18″ wheels to the old chassis. Before, the new chassis slated for 2021 was to be designed around the new wheel size. This is most likely why the floor is being cut back to reduce the increased grip etc.
  • For 2020, a reduction in aerodynamic testing (ATR) and the introduction of Power Unit test bench restrictions for cost reasons.
  • For 2021, a further reduction in aerodynamic testing, and the introduction of a bias between championship position and ATR limitations. The ATR bias will be linear between P1 and P10.
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    This seems to be a mixed bag with many fans not happy about a performance penalty clause. How will this be policed and enforced? I read an article that said the FIA is designing a “whistle-blower” program and it made wonder if we haven’t gone a bridge too far.
  • For 2022, a number of key specific aspects of the regulations have been set out, including curfews, restricted number components (RNCs), scrutineering, and parc fermé prescriptions. These regulations work as a package together with the 2022 Technical Regulations that were approved by the World Council on 30 March 2020 and will be part of an ongoing review and refinement process throughout 2020 and 2021.

2021 Financial Regulations:

  • Reduction of the Cost Cap level to $145M for 2021, $140M for 2022 and $135M for 2023-2025, based on a 21-Competition season.
  • The following amendments/additions will be made to the exclusions currently provided for in the Financial Regulations:
  1. Increase of Year-End Bonus exclusion cap for exceptional sporting results from $10M to $12M and Social Charges for Year-End Bonus.
  2. Threshold for calculation of exclusion for Social Charges on Salary paid to staff lowered from 15% to 13.8%.
  3. Costs incurred for staff entertainment (capped at $1M).
  4. Wellbeing of employees: exclusion of costs incurred for medical programs (e.g. vaccination, eye tests, hearing tests) made available to all relevant employees.
  5. Sustainability costs incurred for environmental initiatives.
  6. Maternity/paternity/shared parental/adoption leave, exclusion for Salary costs.
  7. Sick leave and long term sick leave: exclusion for Salary costs.
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    Again, now in order to police the cost cap, we have to have the FIA involved in the HR aspects of a team and this seems untenable.
  8. Projects undertaken to assist the FIA.
  • Concurrently with these regulation changes, the Notional Values for Transferable Components (TRCs) have been defined by the FIA for 2021, which is of increased importance considering the reduced Cost Cap level. It has been reaffirmed that the concept of the Notional Values (subject to their correct and fair setting), achieves the following:
  1. Enables smaller teams to avoid the necessity to establish and maintain a capability to design, develop and manufacture the parts that have been designated as TRCs (Transferable Components)
  2. Prevents project “flipping” (a small team supplying a big one to circumvent the Cost Cap restrictions).
  3. Enables small teams to make genuine savings.
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    HAng on, I can’t imagine this being easy to manage for a regulatory body who says they don’t have the personnel to police a mandated limit on downforce during a race weekend.
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Rapierman

Say, didn’t they try a “token” system before? How’d that work out? (Answer: Not very well.)

Fabio

Yeah, that’s what I was thinking too.

Tom Firth

Hi all, Overall this sounds all rather complicated and I imagine will create a number of challenges for the sport and the governing body. On the question about what those provisions are around closed and open events, the FIA published a revised 2020 sporting regulations and a 2021 regulations, this is what they had to say: 2020 Text: 21.6 a) For the purposes of this Article 21.6 only: i) a Closed Event will be determined at the sole discretion of the FIA and the CRH and will be defined as one which does not permit spectator access; ii) an Open… Read more »

Last edited 4 months ago by Tom Firth
Nige

Formula 1 will go to any complicated length to make stakeholders in the sport happy….other than the fans of course. Half of the cost problems could be solved by ditching the socially-responsible (boring) hybrids and running proper race engines, AND the fans would actually feel like they are witnessing something special at a race.

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