Stuck the landing.
What is the perfect form of Formula One? There are no easy answers, but the sport’s authorities hope the plan they’ll present to teams today will be convincing enough to settle the long-running battle for the championship’s soul.
The current commercial, sporting and technical regulations governing Formula One expire at the end of 2020, beyond which only one team remains committed to enter the championship. It means from 2021 just about the entire sport is up for grabs. What shape the competition takes beyond that watershed is anyone’s guess.
The five matters outlined last year — power units, costs, revenues, sporting and technical regulations, and governance — remain key debates, but the battlelines have been drawn through three distilled and interrelated matters, the resolution of which will decide what sort of sport Formula One will be in its next era.
Constructors vs customers vs independents
If we’re talking about the spirit of the sport, there is no battle more intrinsic than that which defines what constitutes a Formula One team.
For virtually F1’s entire history there has been tension between auto manufacturer-backed constructors, customers and independents. Though each has brought value to the sport, maintaining a regulatory balance that empowers all three is incredibly difficult, and the 2019 season provides a particularly salient example of how unkempt the rules have become in this regard.
Anchored to the bottom of the field is Williams, the most staunchly independent of teams. Haas, at the head of the midfield, is a customer team as much as is allowed under the current regulations. Mercedes and to a lesser extent Ferrari dominate the sport as auto-backed entrants.
The Williams-Haas dichotomy is particularly telling. The two teams have similar budgets, but whereas Williams builds its entire car at its Grove factory, Haas is content to buy as many Ferrari parts as the rules allow and outsource the remainder.
That the Anglo-American team has rocketed to fifth on the constructors table in just three seasons says all you need to know about how the rules favour big-spending teams and, by extension, those who buy from them over the lifeblood independent squads.
Adjusting the rules by either swinging fully to customer machinery or enforcing more parts be made in-house would hurt Williams or Haas respectively, and instead the sport seems set to travel on a third path of enforcing off-the-shelf standard parts. Already a tender has gone out for a common gearbox cassette for 2021, and the FIA World Motor Sport Council earlier this month gave the nod to pursue this path more vigorously as a sort of middle ground between approaches.
However, this fails to address the underlying problem that has led to the gap between the midfield and the frontrunners, and in some respects it’s Renault rather than Haas that is the canary in this coalmine.
Renault is a manufacturer unwilling to engage in the spending war that has propelled Mercedes, Ferrari and Red Bull Racing to the front, and its inability to close the gap to the front talks to matters commercial rather than technical.
Smaller budgets vs smarter prize money
There’s no doubt money buys performance in F1. According to a Dieter Rencken RaceFans analysis, Ferrari and Mercedes spent approximately $570 million last season and Red Bull Racing around $440 million. Renault, the best-placed of the 2018 midfielders, used in the vicinity of $270 million.
The financial discrepancy corresponds with the performance gap between the top three teams and the rest. The rest of the midfield bar McLaren operates on budgets between $170 million and $210 million. Excepting Williams, all are closely matched.
Exaggerating the problem is Formula One’s notoriously lopsided prize money system whereby Ferrari, Mercedes, Red Bull Racing and to a lesser extent McLaren and Williams cream cash off the top before the rest is divided up, further disadvantaging the smaller squads.
It’s little wonder that attempting to bring budgets under control while neutralising prize money inequity is a major battleground.
But here there’ll be substantial negotiations. The best-funded teams don’t want to lose their dual advantages of financial backing and favourable payouts, and as a result the word is that any budget cap to be introduced in 2021 will start well beyond the reach of most of the midfielders somewhere around the $210 million-mark, decreasing slowly over time.
It would certainly be a start, but the sport can only be sustainable in the long term if expenses are rapidly reduced.
New teams vs established constructors
If the technical and commercial aspects of the sport can be made more equitable, the dream is for new teams to bolster the grid. Both FIA president Jean Todt and F1 CEO Chase Carey have spoken about their desire to see 12 teams compete, and the latter told a special press conference in Melbourne that the interest is there.
“There really is interest if we can provide a framework that they feel from a competitive and a business-model perspective is attractive to them,” he said. “Potential new entrants that expressed interest and enthusiasm if we provide a structure that they think enables it to be something they could enter more constructively.”
Fans would delight at the prospect of more cars and drivers in the sport, but it would create something of a paradox in satisfying the existing teams. Having presumably found agreement among all parties to make the sport so attractive, the established constructors would presumably be unhappy to see the sport’s declining revenue divided into 12 rather than ten slices, presenting only further complication for negotiations.
“You can imagine those who would get less income would not be happy,” Jean Todt admitted. “It’s also true to say it’s better to have ten strong teams, which is the case.
“I think now we can be satisfied to have ten solid teams in Formula One, so we simply need to secure these entries for the future.”
There are no simple solutions, but with a 30 June deadline to agree on the so-called global package of changes, the pressure is on to set a course for Formula One’s future.