F1 is Steering in the Wrong Direction

Back in January 2017, it was announced that Liberty Media would be acquiring a controlling interest in the Formula One Group for $4.4 billion, which is in charge of the sport’s commercial rights. With this step, F1 was supposedly going to dive into the 21st century and modernize itself. The main idea was to cater to an upcoming younger audience.

Before the acquisition, F1 was very zealot of its media. Audiovisual media was mostly controlled by them and we were already in the age of social media. Certainly, after the acquisition F1 began to open up to these platforms and it started to resonate with a younger demographic.

The beginning was promising. We saw new visuals, TV overlays, a ‘song’ made up to further give the sport an identity. Younger people got interested in the sport, and new social media accounts and YouTube channels began to spawn. It seems that interest was growing.

With this shift, the ‘Ecclestone’ Age was over, or at least we thought. The problem with F1 is that Formula One Group only controls the commercial rights. The other main body to keep this sport running is the FIA, or the sanctioning body that governs rules and regulations.

F1 modernized its commercial side but is still left with the ancient management of the rules and regulations. It is imperative that this sport actually shifts from its current state to allow a more modern competition.

Attempting to reduce costs

FIA has a few examples of how outdated their regulations are, they implemented a cost cap with the consent of all the teams, in an effort to reduce the amount of money teams are spending to develop their car. This comes of course, in the era of hybrid power units, which were introduced to make more efficient cars that did not consume a lot of fossil fuels.

In this attempt, they ditched one of the most iconic things F1 had: the distinctive sound the engines had. They went from the roaring V10 engines to V8, and then a hybrid V6 that at the beginning of the era sounded like a vacuum cleaner. This made engines or ‘Power Units’, more complicated, hence increasing the budget the teams allocate for research and development.

The cars became bigger to increase the safety of the drivers, aerodynamics became more complex and teams spent millions trying to gain a few hundredths of a second per lap with complicated aero packages. FIA noticed this and started simplifying aerodynamic structures like in the wings for example, to force teams to reduce spending too much on them. Diffusers were also simplified, and more recently, barge boards will have reduced aerodynamic elements.

Complex aerodynamic elements also affected overtaking. Too much dirty air was being thrown by the cars at the rear end, which made it quite difficult for cars to overtake because of their sensitive aerodynamic elements on the front wing. A vicious circle.

All of this affected the speed of the cars, which was at the end of the V10 era, the fastest F1 cars have been. V8 became slower, and hybrid cars at the beginning even more. F1 corrected this with increased down force in cars and improving the energy recovery systems to further aid the power unit.

The problem with these measures was the overly complex elements in the cars, further increasing the cost for development.

F1 also attempted to reduce costs and carbon emissions by banning re-fuel stops. Cars were forced to start with all the fuel required for the race, and only stopping for tires.

While F1 attempts to be perceived as an environmentally responsible organization by reducing carbon emissions, tire usage, and also reduce costs and the time factories can operate, especially the wind tunnel. The F1 calendar has been adding dates to the championship. Increasing logistics costs and inefficient calendars will increase the carbon footprint the circus leaves on each season.

Prize money, the bone of contention.

F1 awards a percentage of the prize money allocated based on the position each team finishes in at the end of the championship. This is something that is also done in other categories or even other sports. Nothing out of the ordinary, really. The problem is that F1 teams have become too dependent on this prize money, simply because costs are too high, and teams are economically unsustainable on their own, mainly through sponsor deals.

There is also a ‘Ferrari Bonus, in which the team from Maranello gets extra money because they are patrimony to Formula 1. They have been in the sport since its inception. Quite a commendable achievement, but certainly the clause is worth revising.

These things have made teams overly zealous about the prize money given at the end of the championship. They will fight for the last point in order to finish as high as they can in the constructor’s championship.

Recently F1 has been tampering with the idea of introducing new teams to the grid. There are of course big names on the waiting list like Audi or Andretti. While the FIA is looking to expand the sport, teams have been a bit reticent about the idea. A new team coming will mean less prize money for each, since there are more ‘mouths to feed’. It is estimated that some teams will receive less than 10% of the pool if a new team comes on board.

This can be catastrophic to the economical sustainability of the teams, since their budgets heavily depend on the prize money. FIA has done very little to ensure that teams are sustainable on their own. Perhaps implementing something like financial fair play will force teams to seek ways to become economically viable. This of course will mean a huge restructuring of the Financial Regulations by the FIA.

Be consistent with the message

I believe F1 needs to set a date to have a major restructuring on the economic side of things. Also, they need to simplify many of the overly complicated things like aerodynamics, floor effects, car structures, and so on.

They also need to be consistent with the message about carbon neutrality and cost reduction. You cannot preach about that while adding more dates to the calendar and leaving a huge logistic footprint to carry all the cars and equipment, and have drivers fly on private jets to the country any given race is on.

In conclusion, the F1 circus seems to have all of its parties involved in dire need of an overhaul. Regulations need to be changed, teams need to restructure, and the sanctioning body needs to provide solutions consistent with the sustainability message they preach.

It is one of those situations where you need to take a step back in order to make two ahead. A major restructuring needs to happen soon, especially with the new engine rules for 2026. Perhaps 2030 is a good time to give the old Formula 1 a face lift.

What do you think of the current state of F1? Let me know in the comments down below.