Sean Bratches, Otmar Szafnauer, Sergio Perez, Racing Point, Albert Park, 2019

Szafnauer: F1 needs financial, not technological, parity

2019 F1 season

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Racing Point’s Otmar Szafnauer has said that F1 must regulate to make sure teams get a more equal share of prize money, rather than trying to move towards prescriptive or even spec chassis design in an attempt to balance performance, saying spec and junior series have no audience without Formula One’s “special DNA.”

Ahead of potentially finalising the 2021 regulations, Szafnauer said that Formula One’s technical development – where each team independently develops their own unique chassis – was an essential part of the series.

“The one thing though, I don’t know where we’re going to end up on the sporting and technical regulations is what we can’t do is lose the special DNA or ethos that is Formula One, we’ve got to be really careful we don’t lose that.”

He said that racing in spec series (where every chassis and engine is the same) might be good but that it did not attract the attention that F1 does, shown by the limited interest in junior single seater series outside of Grand Prix events.

“We’ve got F2 cars that are not developed and you can say it’s great racing but guess what? If weren’t here, how many people would watch an F2 race? Or Formula 3, for that matter, that doesn’t follow a Formula One race and see how many people go watch a British F3 race at Silverstone. I’m sure there’s great racing there and the cars are all equal …so we’ve got to be careful.”

Szafnauer said that financial, rather than technological, parity was the priority to bring F1 teams closer together in terms of performance.

“I think that the big thing is more equitable money distribution will help the midfield teams spend more money on performance and will get them closer, for sure. There’s a reason the top three have kept moving away from us.

“So I think that will happen and that’s welcome.”

The Racing Point team principal said that a cost cap would have less effect than ensuring better prize fund distribution, as proposed exclusions for costs including driver salaries and power units would mean it had little impact even on teams currently operating above the proposed cap.

“The cost cap maybe will have an impact on the bigger teams, that spend more money than us but not so much on us – we’ll be under it, regardless. The 175 – you’ve got to look through all the exclusions a 175 can play 250 really but it will help, it will help the field get closer.”

24 comments on “Szafnauer: F1 needs financial, not technological, parity”

  1. “The cost cap maybe will have an impact on the bigger teams, that spend more money than us but not so much on us – we’ll be under it, regardless. The 175 – you’ve got to look through all the exclusions a 175 can play 250 really but it will help, it will help the field get closer.”

    I’d be curious to see how this affects the future of pay drivers going forwards. Obviously, “F1.5” needs income to even hit the $175m mark, but would it give teams more breathing room in terms of hiring more talented drivers who might not bring in massive sponsorship, or will they continue to favour well-heeled drivers?

    Then again, as I typed the above comment, I realized that there aren’t all that many pay drivers this year anymore, are there? Tons of new/young talent, one team owner’s son, and two encore performances. Hmm, is Kubica a pay driver? I’m not slagging on him, honest question, given his presence was in part motivated by the sponsorship he brought, and his relative standing vis-à-vis his teammate.

    1. Kubica brought PKN Orlen with him, so I’d safely say he was a pay driver.

      We’ve been through this before on this site, but “pay driver” is a nuanced term that covers a lot of types of driver, so saying someone is a pay driver isn’t automatically derogatory. The term covers (a) no-hoper gentlemen drivers such as Jean-Denis Deletraz, (b) monied “sons of X rich guy” like Lance Stroll, (c) drivers who are backed by corporate backers like Sergio Perez and (d) drivers who open you up to markets in their home countries due to their popularity like Robert Kubica and even (gasp) Fernando Alonso.

  2. F1oSaurus (@)
    13th June 2019, 18:04

    The cost cap maybe will have an impact on the bigger teams, that spend more money than us but not so much on us – we’ll be under it, regardless. The 175 – you’ve got to look through all the exclusions a 175 can play 250 really but it will help, it will help the field get closer.

    This in no way says what the writer of this article claims it says.

    We have already seen the projections and the prize money distribution will have hardly any effect. Maybe two midfield teams will get a significant amount extra (Renault and McLaren), but for the others it’s say 30 million. So compared to the 400 to 450 million budgets of the top teams, Racing Point might go to say 150 million with the extra prize money. How on earth does that help?

    The budget cap is the only thing that will give some financial parity, if they actually take a few hundred million of budget away from the big teams. A few hundred less for the top teams helps a lot more than a few tenths of millions extra for the midfield teams. Especially at the bottom end it helps nothing.

    In fact it will create a bigger rift between the higher and lower midfield teams. P4 and P5 really do get some extra money. The lower places it’s much less. So the P4 and P5 in WCC will now grow out of range for the lower teams and we will get a 3 tier racing league instead.

    1. If the budget cap was blanket, sure. But as Szafnauer identifies, large amounts of potential cost (engines, driver salaries, etc.) are already excluded from that cap – which is in itself well in excess of the total operating budget of midfield teams.

  3. Adam (@rocketpanda)
    13th June 2019, 18:04

    I agree with him. If F1’s financial disparity was equalised the field would close up.

    At the moment the ‘bigger teams’ can use their financial strength and wider resources to chase development and tiny increases in laptime while the poorer teams just can’t afford the outlay. If the strongest teams at the front of the grid were restricted both in finances and resources comparable to the weakest – including fairer distribution of prize money, I’d imagine that’d go a long way to improving competitiveness.

  4. First and foremost, F1 needs to decide what it will be in the future. The needs of the manufacturers is not always in line with the needs of the racing teams and it doesn’t look like F1 can be all things to all parties.

    I don’t agree with a budget cap because that will, generally speaking, mean the end of technological advancement via F1. R&D costs money, and it’s not something that is likely to take place with a restrictive budget cap. And what then what happens in 10 or so years when F1 is running antiquated cars with outdated technology? How many people will tune in/show up to see that?
    I agree with Szafnauer that putting more money in the hands of the small teams should be the plan. That in conjunction with rules stability will give the smaller teams a shot. However even with that, I don’t think the smaller teams will close the gap with the current testing restrictions in place. I believe it’s a pretty safe assumption to say that at the start of the season, one of the big teams will have nailed their design and development and have a significant performance advantage. How then in the current structure are the other teams going to sort out the issues with their car without throwing bucket loads of money at the car? I think the testing restrictions also need to be removed, and there needs to be some funding of testing from Liberty for the smaller teams. Maybe even allow the lower placed teams more testing laps/time than the higher placed teams.
    There needs to be an understanding that some teams will get it right and some will miss the mark, and there needs to be something in place to allow those who got it wrong to sort their issues.

    1. Here’s a thought. Testing time should be allocated in amounts inversely proportional to the teams budgets. The bigger your budget the less on-track testing time you’re allowed. Granted testing time isn’t without cost but that would be a trade-off the smaller teams get to make.

      1. That’s actually a pretty good idea. But contrary to limiting the existing testing time (I’m not sure whether your idea suggests that), I would add the testing time to the bottom teams proportionally. It would be great if say Williams had the opportunity to further develop and test their recent updates.

    2. a budget cap because that will, generally speaking, mean the end of technological advancement via F1. R&D costs money, and it’s not something that is likely to take place with a restrictive budget cap

      @velocityboy – I’d like to draw a distinction here. The budget cap doesn’t apply to PU R&D. And I’m happy for this, because PU technology is probably the best case of something that can trickle down from F1 into consumer automobiles.

      On the other hand, the budget cap applies to aero and chassis, and that’s something I’m fine with. I’m particularly happy about the cap applying to aero, since that is probably something that has the least benefit for consumer automobiles.

  5. i agree with szaufner (how ever you spell that) in most of what he says. we dnt need a spec series. more equitable share in prize money will go along way in helping the smaller teams to be competative against the bigger teams.

  6. OMG, the first man in F1 to finally formulate the only proper thought about future needs!

    A pity he is one and only and alone in that.

    1. Ridiculous comment. Why do you even bother with F1 then?

  7. Couldn’t have said it better myself!

  8. I too agree with Otmar Szafnauer. From the outside it seems so easy to equalise payments. If teams can scrape up more money from somewhere or find some “free” factory facilities then good for them. Teams employ very good accountants, and they’d know how to use that money wisely. If a team wants to employ more people on lower pay, then that’s their business.
    Currently approximately 70% of the TV rights payout is handed out more or less equitably. About 34% being an equal payment (Column One payments) and 34% being performance based (Column Two payments).
    However there’s another 30% handed out in bonuses. Looking at the results from last season there seems to be about a $30M gap between teams with a bonus (excluding Williams) and those without. So, for example, Haas and Renault were given $70M and $73M respectively, while 6th in the WCC McLaren got $100M (with Mercedes, Ferrari, and Red Bull Racing getting more than that).
    We can all see that money buys performance, so the question becomes should F1’s TV rights payouts stay more or less as it is or be changed? I think the current bonus system has made F1 less credible as a racing series than it could be. We wouldn’t consider a cycle race credible if some of the competitors were allowed to use electric cycles or motor bikes and others rode mountain bikes, but that’s basically what’s happening. Yes, there will be a decline in performance by Mercedes, Ferrari, and Red Bull, but that decline should be accompanied by an increase in performance by the teams without a bonus.
    Consider Podiums and Pole Positions: Last season only one driver from a team without a bonus stood on the Podium at the end of a race. No one from a team without a bonus got Pole Position. I was going to say the same thing happened in 2017, but Lance Stroll got third place at Azerbaijan (Williams get a small bonus). The story is much the same for 2016. 2015 was a better year, but still no one from a team without a bonus took Pole Position.
    Ultimately we, the fans, are loosing because of the bonus payments.

  9. I won’t argue about the concept of financial parity, but at the same time I have no fear whatsoever that Liberty/Brawn wants to make this a spec series, and will repeat what I said about TW claiming they should leave the technical regs alone and let time and convergence play it’s role…these are not the cars to be locking in for the long term. The cars Liberty has presented concept shots of however, are the cars that need to be locked in for long-term convergence. They’ve got research from their nose to tail work in the wind tunnel that make car make much less wake and be much less affected in dirty air which we will never get with the current cars.

  10. It is a good point. F2 provides better racing, closer competition, fraction of a cost and way lower viewership.

  11. Make one of the columns of $ based upon where you finished for the year – the bottom team gets the largest share, 2nd worst team the 2nd largest amount & so on. Similar to how USA sports teams give the worst teams the top new players from the draft. If you are not doing something to help the bottom people rise up then the sport will stagnate.

    1. I don’t see that working. For the tabs at the lower end, budgets are tight. They would end up competing to finish lower than their rivals.

      Consider what would happen if you put, say, 3 men who were struggling to feed their families in a foot race. You pay the winner £50, second place £200, and third place £1000. None of them would finish the race, because each of them would be battling to be 3rd to claim the biggest prize.

      I can, however, see benefits in allocating extra testing time, wind tunnel time etc to lower finishing teams (as long as they can do so at reasonable costs) to try to close up the field. Also, possibly, make PU costs lower for lower finishing teams (so the top teams are subsidising the lower ones). These, along with equitable distribution of funds, could have an effect.

      1. @drmouse A couple of things, there are multiple columns of $ so only one would be for finishing position so this would be a small portion of the total.

        In the USA sports the teams can trade their draft picks for $ or 1 high draft pick for 2 medium players. I like your thoughts about test time etc, because this is something of value a lower team can either use or trade for something more valuable for them.

        Bottom line there needs to be something to help boost the lower teams up so they can rebuild and have a chance to be on top again.

  12. When you look at the finances and compare them to other popular sports like football. You have to conclude that F1 teams are very cheap, considering any Premier League football gets more money just to have 22 guys run around a pitch… Even an NBA or NHL team spends more money than an F1 team.

    And these sports don’t develop new technology or scientific knowledge.

    F1 needs to be more popular, it needs to bring in more money instead of capping costs…

    But then again the past decade F1 has done everything to make the sport less popular, starting with taking away any unpredictability from the sport (it will be cheaper) through reliability, then taking away sensation by turning the races into Endurance stints (it will be cheaper to run).
    And the biggest kick in the metaphorical groin is the disappearance of Free to Air, so people can’t even get into contact with F1 except through mediocre simracing.
    (It also didn’t help that F1 used to sound like diving bombers, and now the dishwasher makes more noise)

    It is a perfect storm for failure and the solutions that they come up with to stop it all from sinking aren’t even properly planned out or researched.
    It all just seem to be a blind panic.

  13. Put a strict cap on budgets and let them build the cars they want within broader spec limits . And make sure teams don’t pay drivers $50M and then have the drivers give back $25M in order to increase the operating budget. :/

  14. Principles F1 should follow: 1. safety 2. close racing 3. world’s fastest cars 4. efficiency 5. optimizing 1-4 points. The most fans want to see close racing among the best drivers in the fastest cars. How can we solve it? This is, decision makers and engineers should work for. I think it is possible with compromises.
    Some possibilities we have to consider:
    1. Less differences between cars in lap times.
    Some teams are better in PU and others in aero but we need less differences in lap times. I think we should introduce Plus Weight Per Point system in short term (for example +20dkg/point, less or more. It means if a driver has got 10 points he has to carry +2kg as a minimum weight for the car) because it is a simple, cheap, fast, effective solution to decrease dominance and differences and we don’t need unification or freeze development. Smaller teams get the same PU (hardware, software, etc) as manufacturers. Decrease money/revenue allocation differences and decrease costs. I think it would be ideal if cars are close to each other in lap times but some cars are faster in straight and others are faster in corners. The slower teams get more test days.
    2. Less dirty air and less sensitive cars for dirty air in corners but fast cars: more mechanical grip, less or same aero downforce, the sport needs make it easier for cars to follow each other closely during races
    A, simpler front wing and aero B, (more effective diffuser) C, better tyres D, more powerful and effective PUs (natural development) E, slight changes in technical regulation year by year (differences will naturally decrease) and more freedom in development until regulations allow F, DRS? (open DRS time/race and drivers manage it) G, refuelling? (Cars can be faster and drivers could push harder during races but there would be less safety and more ’overtaking during the pit stops’) H, narrower cars I, less weight J, use active aero elements (no DRS) to decrease the following car disadvantage in the corners
    3. Increasing the role of drivers: A, drivers make decisions on strategy B, less radio instructions from engineers to drivers during races (maybe only safety reasons) C, minimum weight for drivers (for example 80kg with ballast less or more) but no limit for cars D, push on the limit as long as possible, and save (fuel, tyres, PU etc.) as short as possible -> faster lap times during races E, It should be more challenging to drive physically and mentally F, drivers manage ERS instead of a program (like they used KERS earlier) G, so more challenge mentally (drivers own strategy) and physically (more G force until it is safety) as well for drivers.
    4. Better tracks: It would be a good think if F1 valuated the tracks.

  15. I have to agree, I’m in favour of a cost cap as long as the innovation is not destroyed. Let it be a competition of who can do the most with the least. You never know it may make the drivers the biggest part of the winning formula again.

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