Nico Hulkenberg, Renault, Circuit Gilles Villeneuve, 2019

Why F1 teams are divided over the next step in Liberty’s 2021 masterplan


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Formula 1’s post-2021 regulatory process has been bubbling under since early 2017, when Liberty Media formally acquired F1’s commercial rights, and appointed Ross Brawn, the former Ferrari technical director and team principal of both his eponymous title-winning teams and Mercedes, to oversee its sporting interests.

Although there doubts persisted about whether the current, highly convoluted 2013-20 governance process applies to regulations framed during this period or only to those which apply during this tenure – and hence whether the Strategy Group and, crucially, Ferrari’s veto hold sway over post-2021 regulations – the FIA and Liberty took the initiative by insisting the FIA’s International Sporting Code applies to the process.

This demands that “changes to [sporting and technical] regulations be published no later than 30th June each year and come into effect no earlier than 1st January of the year following their publication, unless the FIA considers the changes in question are likely to have a substantial impact on the technical design of the automobile and/or the balance of performance between automobiles, in which case they will come into effect no earlier than 1st January of the second year following their publication.”

Clearly the changes, arguably the most sweeping in the history of the sport given that they introduce Financial Regulations (aka budget caps) and a revamped governance process, will have ‘a substantial impact’, and thus need to be ratified by 30 June in order to take effect on 1 January 2021. However, ISC provisions allow the code to be overridden by unanimous agreement.

Although the major regulatory cornerstones are in place, some tidying-up remains after the entire process (understandably) lost some momentum due to the tragic death in March of FIA race director and head of F1 Charlie Whiting, who had played a major role in shaping the regulations.

In late April a number of teams lobbied the FIA to delay the process to either October or even January next year. At the time their arguments were driven not by practical reasons, but fears that better-funded teams would get the jump due to having resources to develop both current cars and post-2020 concepts. Not surprisingly, their advances were rejected.

Now, however, there are practical considerations. Bluntly put, the FIA believes the sport would be served by delaying presentation of the regulations to the FIA World Motor Sport Council for ratification until October in order to tie up all loose ends and clarify any (mis) interpretations.

Francois Dumontier, Jean Todt, Ross Brawn, Circuit Gilles Villeneuve, Montreal, 2019
Todt turned up in Montreal and met with teams
FIA president Jean Todt, in Montreal by prior arrangement for a mobility conference and to dedicate the control tower to Whiting’s memory, requested a delay by unanimous agreement during a team boss meeting on Saturday morning. While all players agree with the logic, a group of independent teams is concerned that the Financial Regulations in particular, which are in their final form, could be diluted during any delay.

“They’re unlikely to get any better [for us],” a team boss explained. “But the chances are the major teams will push for higher caps or more exclusions. That’s why we need to stand our ground on this,” adding that McLaren, Renault, Sauber and Williams had all signed a conditional letter, with Haas possibly to follow suit.

The FIA has convened a meeting for Thursday in Paris at which the governing body hopes to persuade all teams to sign up to the delay, but according to a number of team bosses there is a lack of consensus over various aspects, with one describing the technical regulations as “still green”.

Unless all agree to a delay, in terms of ISC provisions the dossier needs ratification by the WMSC during its meeting scheduled for Friday – the final opportunity before the cut-off unless F1 resorts to the untidy e-vote procedure – or the FIA could leave itself open to legal action. Equally, delaying the regulations by a year would make a mockery of F1 and its administrators/commercial owners, and possibly attract further legal action.

Jean Todt, Cyril Abiteboul, Zak Brown, Montreal, 2019
Midfielders fear cost cap rules could be watered down
The issue is that the FIA needs to submit the dossier to WMSC members by close of business as this is written on Monday to enable them to peruse reams of papers running into hundreds of pages. How else could the WMSC ratify the dossier without sufficient knowledge of the contents?

According to a letter sent to all teams by Nicholas Tombazis, the FIA’s head of single seater racing and the man who has recently overseen the process, and seen by RaceFans, the FIA is covering itself for both eventualities: It is going ahead with the preparatory stage, but would formally withdraw the dossier should unanimous agreement for a delay to the October WMSC meeting be reached.

According to sources, the dossier consists of five parts: Governance, Financial Regulations, Power Unit Regulations, Sporting Regulations and Technical Regulations.

Of the five components, the first three are said to be sufficiently complete to require only minor tweaks prior to implementation, with the sporting regulations being, in the words of a Liberty source, “90 per cent there, possibly requiring only clarifications”.

Thus, the only real sticking point is the technical regulations – and the primary reason for the delay request.

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FIA, Circuit de Catalunya, 2019
FIA, Liberty and teams will have 10 votes each in new F1 Commission
The current process commences with (non-executive) Technical/Sporting Regulation Meetings, which forwards recommendations to the Strategy Group, comprising six teams, FIA and Liberty, with six votes per group and requiring simple majorities for motions to be carried and forwarded to the F1 Commission.

Once approved by the F1 Commission (24 votes, comprising all teams, FIA, Liberty, plus engine, promoter, tyre, commercial and technical representatives) by 70 per cent majority/unanimous vote depending upon timing, changes are escalated to the WMSC for ratification and adoption. The WMSC is empowered to accept/reject motions but not amend them.

According to a source with knowledge of the revisions, they simplify the process by reducing the number of representatives while ensuring full representation by teams. The process maintains an element of stability while maintain the FIA’s responsibility for safety.

The FIA, Liberty and all teams will be the sole members of the revised F1 Commission, with each team having a vote and FIA and Liberty ten votes each. On engine-related matters only, such suppliers have a vote each. The structure is scalable, in case the number of teams or engine suppliers rises or falls. Checks and balances are offered via options for unanimous, ‘simple’ and ‘super’ majority votes depending on the timing of regulation changes.

For regulations changes affecting the following season a cut-off date of the end of April applies, or the end of September for budget cap matters. A simple majority – 25 of 30 votes based on the current grid – is needed for approval. A ‘super majority’ (28 votes) kicks in thereafter. Unanimous agreement is required for in-season changes, and voting may be conducted via secret ballots if requested.

Stability periods are provided for specific regulations such as power units, budget caps and the ‘DNA’ of Formula 1, whatever that implies.

Ferrari, Circuit Gilles Villeneuve, 2019
Ferrari’s veto – aka “protection right” remains
Four advisory committees are to be established – technical, sporting, financial and power unit – to review and advise on any amendments, but these committees have consultative and advisory roles only.

Finally, Ferrari retains its power of veto over changes to F1’s rules, which is referred to as its ‘protection right’. This covers changes to regulations governing the power unit, finances and F1’s ‘DNA’. It is subject to some conditions, not least that the changes need to have a substantial adverse impact on Ferrari’s legitimate [F1] interests.

Verdict: A simpler, all-inclusive process is long overdue. But references to F1’s undefined ‘DNA’ leave an obvious grey area.

Financial Regulations

Much discussed for over a decade but new for 2021, the financial regulations limit certain spends by teams over a full year reporting period, and will be applied by a cost cap panel. They form part of the conditions of entry, and all team personnel must be made aware of regulations and of the FIA whistleblowing policy.

As RaceFans revealed last week, the overall cap is $175m – the regulations include presentation conversion rates into Euro/GBP and Swiss Francs – with Clause 3 listing certain exclusions:

  • Directly attributable marketing activities
  • Considerations provided to F1 drivers and parties connected to them, plus travel/accommodation costs
  • Considerations provided to three individuals – other than drivers – earning highest aggregate amounts
  • All costs directly attributable to team heritage activities
  • Capitalisation of cars used during the specific championship season
  • Amortisation, depreciation, finance costs and taxes
  • Cost directly attributable to human resource, administration and legal activities
  • Property costs
  • Flight/accommodation costs incurred during competition or testing
  • Power unit development costs, and validation of fuels and oils
  • Employee termination costs (during transition period), and employer social security contributions

The regulations provide for a variety of sanctions ranging from financial penalties (to be decided on a case-by-case basis) through minor sporting penalties (reprimands, points deductions, suspension, restrictions on aerodynamic or other testing and reduction of the cost cap level) to major sporting penalties (as per minor penalties but heavier sanctions).

In addition, under the regulations a Cost Cap Adjudication Panel – consisting of a group of independent judges – could levy sanctions on individual team personnel responsible for any breaches.

A ‘soft’ implementation period, specifically the full 2020 year, is planned as a ‘dry run’, while the regulations make provision for new entrants, who for the full year prior to entering the sport will be required to salient aspects of the regulations.

Verdict: Comprehensive regulations, but success hinges on consistent and stringent controls.

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Power Unit Regulations

Mercedes PU106B power unit, 2016
Stable power unit rules should yield cost savings
While technical aspects of the power unit regulations are little changed, the regulations make provision for single-supply high pressure fuel pumps, and non-exclusive supply of non-exclusive supply for energy storage cells, turbochargers, and fuel injection systems.

However, the number of permitted major components will be further restricted, while more long-life components will be introduced.

In addition, a number of sporting restrictions will apply, including limits on engine and energy recovery system dynamometer usage, with glidepaths for both to be implemented over a three-year period. For example, engine dynamometer operating hours will be halved between 2021 and 2023.

Stipulations such as obligation to supply a specified number of teams and maximum price for a single season two-car lease remain in place, the latter on a matrix basis dependent upon exact specification.

Verdict: Power unit suppliers seem in favour of such changes, but what happens if incomers lag, as happened with Honda?

Sporting Regulations

Circuit Gilles Villeneuve, 2019
Track activity will begin on Friday instead of Thursday
The strategy is to revise the sporting regulations in two phases: savings and spectacle. The changes in the dossier are aimed mainly at cost savings and efficiencies, while future changes will target improvements to ‘the show’.

Five main areas are covered:

‘Three-day’ race weekends beginning on Fridays instead of Thursdays. Savings are expected to be made by crews arriving a day later, although the jury remains out as the potential savings. Some suspect this is a tactic to reduce the number of ‘away days’ to enable Liberty to expand future calendars.

Parc Ferme regulations will operate from Fridays to cut set-up, and cars must race as scrutineered. Experimental parts may be fitted after scrutineering, but cars must qualify or race in their scrutineered specification.

Gearbox usage will be pooled for the season, rather than being used for a number of events. The intention is to reduce penalties without increasing costs.

Each team will be obliged to use at least two race weekend Fridays per year to give runs to rookie drivers. These are defined as drivers with no more than two grand prix starts.

Pre-season testing will be reduced from two four-day tests to a pair of three-day tests. Again this is aimed at cost savings, but the jury remains out…

Verdict: Arguably the most contentious changes, with split opinions on their effectiveness.

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Technical Regulations

F1 2021 'India' concept
How will F1 revolutionise the racing in 2021? Its new concept car analysed
These regulations are said to be the ‘greenest’ (i.e., the least complete). Four main goals are targeted.

These are: Improving the spectacle (closer racing, more overtaking, unpredictability), promoting sustainability (cost reduction, enable small teams to compete, attract new entries, eco-friendly message), and sustaining F1’s levels of technology (cutting edge, innovation, relevance) and performance (world’s fastest race cars, defined performance differentiators).

To this end a number of studies have been undertaken by Liberty, working in conjunction with the FIA and teams, to frame regulations that deliver aesthetic but less aero-sensitive cars by reducing ‘following car’ sensitivity. Currently the effects of turbulence can be felt up to eight lengths behind a car, but the new aerodynamic regulations should reduce this by 80%.

Another change is to the classification of parts. Out goes ‘listed parts’ terminology, and in comes:

  • Team-specific components (TSC): whose intellectual property is owned by a single team, effectively ‘listed parts’.
  • Standard supply components (SSC): manufactured by a single supplier via the FIA tender process.
  • Stipulated Design Components (SDC): manufactured to specification stipulated by the FIA.
  • Transferable components (TRC): components supplied by teams to teams, at prices agreed under cost cap regulations

In addition, the number of in-season aerodynamic upgrades will be restricted, while certain components will be homologated for the full season (or more).

Verdict: The devil lurks in the detail, which is currently lacking…

Apart from requisite fine-tuning of certain provisions of various regulations, F1’s five-year future now seems largely mapped out. The danger now is that team interference – particularly from the majors – dilutes the entire process. Friday will indicate which is the way forward.


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29 comments on “Why F1 teams are divided over the next step in Liberty’s 2021 masterplan”

  1. @dieterrencken Thank you for another of your usual informative comprehensive articles spelling out the lay of the land.

    1. +1.

      Foxes, Ferrari and hen houses. A metaphor waiting to be vetoed.

  2. Marvin the Martian
    12th June 2019, 12:43

    Thanks for the information, that’s the most comprehensive piece I’ve read on this subject to date. I can see why teams are not comfortable with the technical regulations as is, especially the restriction on in season aero upgrades etc, as this would effectively cement your place in the running order giving you limited capacity to make changes to catch up with the rest of the pack, or challenge for the top tier. There is very little there that gives me a positive outlook for the future of F1, certainly not in the first season or two, as the very good will prevail and the limited resource teams will be sunk if they make a minor mistake. With the current regulations, the 107% rule is never used but I foresee it being put to quite a lot of use in 2021 if Williams performance in the last 2 off seasons is anything to go by. Huge changes will breed a huge variance until convergence occurs maybe 5 years down the line based on the proposed restrictions.

  3. “the number of in-season aerodynamic upgrades will be restricted”

    If you get your aero wrong this could be an issue like the engine token issues

    1. Correct! In a way it should be the reverse of the WCC points, so the teams with the least points have the most ability to upgrade. Unfortunately that could appear to be a handicap type system … which is something a lot of people (like me) oppose.

  4. I hope the Ferrari Bonus(mafia tax) and veto are culled in favour of fairer prize money distribution to smaller teams and all teams getting equal right of say in rule making.

    1. Sadly, it appears the veto will remain.

    2. Ferrari’s bonus money comes out of the Liberty parasites cut, and does not effect the cut of the small teams 1 penny. Ferrari’s bonus is not the problem, the real problem is the liberty parasites(and bernie before them) stealing half off the top.

  5. Regarding the five covered areas of the sporting regulations: I thoroughly hope part 2 won’t get through. It’d add nothing to the spectacle if anything it’d just bring in unnecessary safety risks including to what Toto has pointed out concerning the matter on why he’s against this suggestion, and I thoroughly agree with him.

    The same views concerning the first part, which I’ve brought up a few times before, and BTW, if that were to happen, then how could part 4 happen? They seem somewhat contradictory to each other.

    The last part: Not as fussed, although given how limited testing already is at present and has been for a long time, I don’t see much benefits reducing it even more either.

    Part 3: I don’t care either way.

    1. Yep, that seems to cover most of my thoughts on that too @jerejj, apart from part 3, where it’s a small tweak to finally have the gearbox follow the same rules as the other bits, though I do wonder how that interferes with crashes, esp. those w/o the damaged gearbox’ car being at fault; and, the part 4 rookie drivers doing it too.

  6. Death by a thousand cuts.

    1. Nah that’s what happened when BE and CVC gave all the power to the top 4 teams. I see all this as written by Dieter as them sorting out a mess which was always going to be complicated, for a much better new era to come. It will never be perfect but I cannot see how all this effort to improve everything cannot result in something much better than we have now. For me this is an effort to inject new life into F1.

  7. “Parc Ferme regulations will operate from Fridays to cut set-up, and cars must race as scrutineered. Experimental parts may be fitted after scrutineering, but cars must qualify or race in their scrutineered specification.”
    Why would it be good? If drivers couldn’t change their cars, why would they run in free practices?
    It causes more simulations and may help for wealthier teams. So I think F1 doesn’t need this part of regulation.

    1. @patent – they can still determine tyre wear on that circuit, to fine tune their strategy. Of course, in the process if it is apparent that their setup eats tyres, it’ll be obvious for all. I’m not a fan of the proposal, so I’m not defending it, just pointing out what little they can do.

      The key takeaway is not that the car setup if frozen, it is that the race weekend starts a day later (Fri instead of Thu). That’s the big thing that Liberty are driving at, as Dieter points out.

      1. …”the race weekend starts a day later (Fri instead of Thu).” It is ok.
        I just don’t understand the ‘car setup frozen’ before first free practice on Friday. I think it’s a bad direction.

  8. Could I receive a point of clarification?

    Is the 10 votes by both Liberty and FIA a block of votes or 10 separate individuals each voting?

    I know it is probably a block, but in that case it means without FIA and Liberty agreeing a vote becomes much more difficult.

    1. It’s a block of ten votes for each FIA / FOM, and 1 vote per team. The numbers are scaled depending upon number of teams.

    2. If unanimous decision is required, it does not really matter how many votes anybody has. If the 70% majority is maintained, then (under current structure) it would take one team to vote with FIA/FOM to pass a non-engine related measure. So I suppose the argument is that team votes are relevant. And the Ferrari veto looms over it all still…

      1. @gpfacts
        Correct me if am wrong, but i think the 70% mentioned in the article is for the current process.

        A simple majority – 25 of 30 votes based on the current grid – is needed for approval.

        I think the votes of atleast 5 teams are needed for an approval. Either ways, irrespective of how many teams agree to a proposal, FIA and Liberty will have to agree in unison for a change.

  9. Perhaps a soft spending cap like the luxury tax MLB has in place would be more acceptable to the big teams.
    What I am thinking of is a 100 million soft cap with all spending above that taxed 1 for 1. If a rich team wants to spend 200 million, they can, they just need to pay 100 million in tax.
    Place all they luxury tax collected in to a fund that is split amongst the other teams that did not exceed the spending cap. The money from this fund would not count towards the spending limit for the teams receiving it.

  10. Brawn claimed he would be making races better. He only needed 3 years and we’d see the difference. It’s apparent Ross forgot that he’d have to deal with people like Brawn to get his ideas through. Also, his great plan had to be workable for all of the teams in F1. Not all poachers make good gamekeepers.

    By the way, MotoGP has a ridiculous rule regarding engines. At the first race of the season, all of the engines that the teams have built for the year are counted and sealed. That’s it, if they’ve built a lemon, hard poo, they can’t change it for an improved version for 12 months. Let’s hope Ross Brawn doesn’t get to hear about that.

  11. Limited aero development? So what are the teams going to develop over a season? Mechanical changes where teams are engine customers will be limited to hydraulics, suspension and brake setup. That isn’t F1. I want to see ingenious solutions turning up on the cars, not hidden away under their skin.

  12. I feel that of F1 want to attract a new engine manufacturer into the sport, they will need to offer various benefits which will allow them to catch up to the curve quickly.

    Additional testing allowances will be one. For example, the new engine manufacturer’s works/customer team are allowed 10 additional test days in the first year, lowered to 7 in the next year, followed by 4 in the third. Benefits also extended to use of additional components in the first year without penalty.

    It doesnt have to be as such, but there has to be some sort of compromise. If not, no manufacturer will be interested.

    1. @jaymenon10 – I agree.
      + New engine manufacturers will be needed a new type of engine regulations to build simpler, cheaper engines in F1.

    2. How about unlimited testing until your engine gets in a car that makes the podium, starting fresh every year?
      THEN, start ratcheting down the testing.
      If you (or the teams using your engine) aren’t good enough for a podium, it really doesn’t matter how much you test.
      And it would be the engine. Merc wins the 1st race of the year? Sorry Williams.

      If you get good, welcome to the winners club. The engine wouldn’t be there if it wasn’t any good.
      If one of the big players got it completely wrong, it would let them fix the problem until it went away.

  13. “Non-exclusive supply of non-exclusive supply for energy storage cells, turbochargers, and fuel injection systems”. What does this even mean? If I could get past the lack of an editor and the atrocious grammar I am sure that article would be interesting.

    Having said that this seems like a total disaster. F1 has devolved into a bunch of politicians only out to line their own pockets. Especially Todt and Brawn. Liberty really needs to fire the whole lot of them and start over or this is going to end badly for them. Break from the FIA and WMSC(whatever that even is) and just sort it out.

  14. The sporting regulations seem more aimed at gimmicks than anything genuinely helpful and I’d have thought that by now there’d be more substance to the technical regulations that the blue sky motherhood statements that they have been spouting for two years now.

    Seriously disappointing but not the least unexpected. I’m not the least surprised teams are beginning to fracture in their opinions.

Comments are closed.