“Liberty is fully aware that it will be impossible to make everyone happy, so their strategy is one of making as few people as possible unhappy,” one team principal told RaceFans after Liberty Media revealed to teams the latest on its plans for Formula 1 in 2021 and beyond.
The teams were tight-lipped publicly, but @DieterRencken has uncovered what they were shown last week, and whether they are likely to accept it.
The ways of Formula 1’s masters are baffling, even at the best of times. At a media briefing held in Melbourne during the build-up to the Australian Grand Prix, FIA President Jean Todt and Liberty Media CEO/chairman Chase Carey jointly announced that a post-2020 progress summit would be convened in London on March 26, held in conjunction with a combined Strategy Group/F1 Commission meeting.
So far so good, for news about the progress made by both motorsport’s F1’s governing body and the sport’s commercial rights holder towards a total revamp of F1 had been eagerly awaited by teams, race promoters, broadcasters, fans and media alike. The last formal session had been held a year ago, in Bahrain.
Yet during the meeting a vow of silence was imposed on all delegates. This begs the questions: Why whet the appetites of all and sundry during a media call, then not issue even the briefest of official statements afterwards?
Does F1 have so little respect for its half-billion-strong fan base and all the entities that enable ten teams to blow two billion bucks annually on making 20 cars go fast on as many Sundays per year that they are kept in the dark about F1’s biggest overhaul in recent history?
One hears from sources that a template had been prepared, ready for copy and statements to be dropped in as and when they arrived – and then a news blackout was decided upon. By whom? That too is blacked out.
However, despite the veil of silence and some mixed messages, following discussions with sources during the weekend our (informed) perceptions are that there are six very good reasons for the silence. Simply put, seemingly very little if any tangible progress was made over the past 12 months on the six key items.
These are, of course: a revised governance process to replace the current cumbersome Strategy Group/F1 Commission/World Motor Sport Council procedure; more equitable revenue distribution across the board; realistic and auditable cost cap regulations; and a trio of cheaper and more effective sporting and technical regulations, with last-named covering both chassis and engine clauses.
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However, about the only attributable comments about the meeting were obtained during Friday’s FIA press conference, when this website asked the quartet of team delegates – Guenther Steiner (Haas), Zak Brown (McLaren), Franz Tost (Toro Rosso), and Frederic Vasseur (Alfa Romeo) – to describe the progress made since Liberty’s original proposal was presented – in Bahrain – a year ago.
All the right noises were made on Friday, then Steiner stated that progress had been made “in the understanding of what needs to be done that everybody agrees. And that is not written on paper”.
Don’t shoot the messenger, for Steiner was simply playing it as straight as ever – but his comments indicate that in the two years that have lapsed since Liberty acquired Formula One Management and with it the sport’s commercial rights, its executives are still trying to get a proper handle on the teams and their business models.
Brown’s response to the same question raises further doubts as to whether headway was made: “There has definitely been progress in that we now have a deal in front of us to react to…” Unsaid was that it took a year to reach a stage where “a deal is in front of us”, this despite a substantial number of ex-team folk recruited by Liberty over the past two years, all of whom have solid insights into the various team business models.
One team boss who was not in the press conference, talking on condition of anonymity, opined that the protracted timeframe could form part of Liberty’s negotiating strategy: “By leaving it this late they’ve closed the window for Mercedes and Ferrari to try and start a breakaway series, but it does mean that F1 has backed itself into a corner with the FIA’s 18-month rule.”
The source was, of course, referring to clauses in the FIA’s International Sporting Code that stipulate that F1 operates to 18-month notice periods for major regulation changes that could have a “substantial impact on the technical design of the automobile and/or the balance of performance between the automobiles unless overriding covenants such as a Concorde Agreement override these clauses.
The mere fact that no alternate agreements exist with less than three months remaining before the clock starts ticking down on 1st January 2021 indicates just how ill-prepared for 2021 the sport appears to be.
It was known last year that the ISC provisions could, yet Mercedes motorsport boss Toto Wolff told Sky that the teams are now seeking to delay the process: “We’re discussing whether to extend the deadline. I think you could do it with a unanimous decision, but we need to check it from a legal standpoint.” How long do team lawyers need to check something that is so obvious, with scores of precedents?
Whatever, the deadline can be delayed, but that would require agreement from all – including the FIA and Liberty. Based on what some of Wolff’s peers said in Bahrain they are unlikely to agree, for compressed timeframes make life tougher for independent teams than for majors, as Williams recently experienced after the current regulations were signed-off late. Could that be the cornerstone of Wolff’s delaying tactic?
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From mixed messages floating about the Bahrain paddock it is absolutely clear that not one of the six key areas is totally sorted. Some are closer to final resolution while in other areas there seems to have been some regression since last year’s meeting.
One example: When I asked about the level of the budget cap, six team bosses, all of whom attended the same meeting, provided six different takes on the matter – including the proposed level of cap, and in/exclusions. Some said “under $200m all-in”; another said “way over”. There were non-committal answers about ‘pay drivers’: if driver salaries are excluded from the cap, is pay driver income included?
Indeed, one team boss didn’t know whether the ‘glide path’ to phase in the budget cap would happen. Were they feigning ignorance? Possibly – yet they had been open about all other aspects.
Nonetheless, based on our off-record conversations from last weekend the progress made in the six key areas can be summarised as follows:
The FIA’s area of responsibility after FOM, admittedly acting upon instructions of previous owner CVC Capital Partners, who conjured up the current dysfunctional process that sees half the teams effectively excluded from the regulatory process.
Ferrari will retain its power of veto of regulations changes. However it will become “softer”, effectively giving the team the right of appeal to the FIA only “if the DNA of the sport changes substantially”.
“The example used is the introduction of standard cars with V12s”, was how one source described it.
The proposal provides for streamlining the rule-making process. The Strategy Group will fall away and the present 24-member F1 Commission reduced to only the FIA, FOM and all participating teams – thus a sort of ‘Super Strategy Group’, with the teams having one vote each and the FIA/FOM 10 apiece, with no representation for race promoters and technical/commercial partners. Motions will be escalated to the World Motor Sport Council for ratification.
Although voting for most changes will be on a simple majority basis (50 per cent plus 1 vote), provision is made for a complex vote structure where major changes are tabled, or short timeframes are demanded. There are, though, concerns that voting is weighted in favour of FIA/FOM, placing teams at a disadvantage.
“I think the FIA is trying regain majority control, and who can blame them given the current debacle,” said a source. “But they risk alienating the teams in the process…”
A contentious area: although a more equitable structure was discussed, team bosses felt final details were missing. Bonuses will be paid, but at reduced levels, with Ferrari in line for around $50m per annum, and others paid according to a heritage/performance table – based on a mix of historic championship wins and rolling ten-year classifications. Thus, over time, every team could conceivably earn a bonus.
Expressed differently, unless Haas scores some top results soon it is unlikely to receive bonuses but Williams – which celebrates 50 years in F1 this year and boasts an enviable historic record – would be in line for various payouts despite recently placing down the current order. The same goes for McLaren, while Alfa Romeo/Sauber would qualify for a heritage money, but not championship bonuses.
Thus there are three payment categories: Columns one and two as per the current prize money table, plus column three – based on performance/heritage criteria. According to a team boss the total ‘pot’, currently around $1bn, will still be about two-thirds of underlying revenues, with column three being significantly less than current bonus payments – in turn affecting Ferrari, Mercedes, Red Bull and McLaren, in that order.
It seems the proposed ex-gratia $10m annual payment to engine suppliers has been scrapped.
A paddock straw poll indicated that the top three would be around $30m/annum worse off under the deal, McLaren down by around $5m and the likes of Renault/Racing Point benefitting by $25m.
The only certainty is there will be a cost cap but the devil lurks in the detail regarding the inclusion and exclusions as outlined above. While major teams are pushing for driver salaries (and earnings of up to three executives) to be excluded, one independent team boss pointed out that superstars bring valuable lap time, yet are not restricted by caps, as are other performance-related activities such as wind tunnel hours.
What sense in paying a driver $40/annum, but restricting wind tunnel time to 10 hours/week?
A three-year cost cap glide-path is likely, equating on paper to $200m/$175m/$150m – but the raft of exclusions could easily push that to realistically more like $250m/$225m/$200m. This is still significantly less than what F1’s richest teams spent in 2018.
A curate’s egg: on one hand little or no investment is required to bring changes to bear where on-track and weekend activities are concerned, but potentially a hornet’s nest when it comes to cost and manpower restrictions, and listed and standardised parts (strictly speaking these are sporting elements).
What has become clear is that weekend timetables will be condensed to reduce time spent away. Although events will still cover four days, programmes will start later so teams can potentially arrive a day later. Expect first practice to start after Friday lunch, with second practice running into evening, and various running changes to qualifying and tyre usage regulations. But, fortunately, no qualifying race, as had been threatened.
On the off-track side, further restrictions are planned to reduce manning levels and related costs, although the big sporting regulation is, of course, the cost cap.
Effectively little change to what was eventually agreed last year after it emerged no newcomers had expressed interest after proposed changes aimed at reducing costs of entry were tabled – which would, though, have penalised existing suppliers, who would have incurred development costs.
Expect post-2020 engines to be much the same as present; subjected, though, to dynamometer restrictions and other cost-saving regulations under a revised sporting code. It seems the overall plan is to aim for a major engine revamp in 2025, when the current crop will have seen service for 12 years old.
Plans for changes to F1 body shapes were largely based on research undertaken by FOM’s technical team headed by Pat Symonds working in conjunction with Nikolas Tombazis, the FIA’s head of single seater technical matters, and supported by studies undertaken by teams on their behalf, the 2021 technical regulations are edging towards finalisation.
Two chassis concepts resulted: Hotel and India. Intended to help cars run together much more easily than at present, they feature basic wings, no barge boards, but with ground effects and large diffusers. Expect covered wheel rims to reduce drag, fared-in halos and possibly canard fins.
An ‘India 2’ concept will be ready in May, in time for outline regulations to be submitted to the WMSC by the end of June.
Overall readiness: 7/10
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Until all keys required to unlock the various areas are available it is impossible to accurately gauge the progress made, but clearly much still remains open – particularly as many areas are interrelated, yet are not all are regulated by the International Sporting Code. For example, although the regulations may impose cost restrictions, the prize ‘pot’ falls outside the FIA’s ambit – yet ultimately affects teams’ spending.
Where to next? No formal meeting date has yet been set, but the teams met for breakfast in Bahrain on Sunday and another meeting is set for today 2pm at Racing Point’s headquarters. The indications are most team bosses will teleconference in rather than travel. Informal meetings are expected to be called during grand prix weekends, with a big one on Monaco Friday.
In the final analysis it is clear is that the FIA/FOM staved off the threat of a breakaway series while seemingly keeping Ferrari and Mercedes onboard. Yes, they may still exit F1, but the regulations provide no excuse for them to do so. Equally, the independents are smiling, for they again have a fighting chance.
It seems FOM achieved its objective of making everybody only a little bit unhappy.
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