“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 candidly told RaceFans, following Liberty Media’s pivotal revelations to Formula 1 teams regarding its ambitious plans for the sport from 2021 onwards.
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The anticipation surrounding Formula 1’s future has been palpable, with every stakeholder, from dedicated fans to team principals, eager to understand the extent of the proposed transformation. Speculation has been rife: would Liberty overhaul F1’s prize money distribution, finally introducing a stringent cost cap to level the playing field? Would the venerable Ferrari power of veto be abolished, grand prix weekends shortened, or a controversial new ‘qualifying race’ be integrated into the schedule? These were the pressing questions looming over the sport.
Publicly, the teams maintained a united front of tight-lipped discretion. However, behind the scenes, insights from esteemed journalist @DieterRencken revealed the intricate details presented last week and offered a crucial perspective on the likelihood of their acceptance by the Formula 1 community.
The decision-making processes governing Formula 1, often perceived as enigmatic, took a particularly perplexing turn leading up to these revelations. During a media briefing held in Melbourne, preceding the Australian Grand Prix, FIA President Jean Todt and Liberty Media CEO/Chairman Chase Carey jointly announced a significant post-2020 progress summit. This crucial meeting was slated for March 26 in London, coinciding with a combined Strategy Group and F1 Commission meeting, signaling an impending discussion on the sport’s future direction.
This announcement was met with widespread anticipation. News regarding the collaborative progress made by motorsport’s governing body, the FIA, and the sport’s commercial rights holder, Liberty Media, towards a complete overhaul of F1’s structure had been eagerly awaited. Teams, race promoters, broadcasters, the global fan base, and media alike had been clamoring for updates since the last formal session a year prior in Bahrain.
Yet, the enthusiasm was quickly dampened when a strict vow of silence was imposed on all delegates attending the London summit. This puzzling directive immediately raised questions: Why generate such widespread interest during a public media call, only to follow it with an absolute blackout and no official statement, however brief? This lack of transparency fuelled further frustration and speculation.
One could reasonably ask if Formula 1, despite its estimated half-billion-strong global fan base and the intricate ecosystem of entities enabling ten teams to collectively spend billions annually on exhilarating racing, shows such little regard for its stakeholders that they are deliberately kept in the dark about the sport’s most significant overhaul in recent history. Such secrecy risks alienating the very audience F1 relies upon for its continued success and growth.
Sources close to the situation suggest that a comprehensive template for press releases and statements had been meticulously prepared, ready for immediate deployment as details emerged. However, at the last moment, a decision for a complete news blackout was made. The authority behind this decision remains shrouded in mystery, further deepening the intrigue and frustration within the F1 paddock.
Despite this pervasive veil of silence and the mixed messages that managed to filter through, discussions with informed sources over the subsequent weekend led to a clearer, albeit concerning, perception. There appear to be six primary reasons for the imposed secrecy, stemming from the fact that seemingly very little tangible progress had been made over the preceding 12 months on the six crucial agenda items for Formula 1’s future. The ambitious revamp envisioned by Liberty Media seemed to have stalled in its critical implementation phases, creating an atmosphere of uncertainty and guarded optimism.
These six cornerstone items, critical to the sport’s evolution, include: a significantly revised governance process, designed to replace the current cumbersome and often criticized Strategy Group/F1 Commission/World Motor Sport Council procedure; a more equitable revenue distribution model across all participating teams; realistic, transparent, and auditable cost cap regulations to curb excessive spending; and a trio of comprehensive updates covering sporting and technical regulations, with the latter encompassing both chassis and engine clauses. Each of these areas presents unique challenges and requires intricate negotiation among diverse stakeholders with often conflicting interests.
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Amidst the widespread silence, some of the only attributable comments regarding the meeting surfaced during Friday’s FIA press conference. This website pressed a quartet of influential team delegates – Guenther Steiner (Haas), Zak Brown (McLaren), Franz Tost (Toro Rosso), and Frederic Vasseur (Alfa Romeo) – to describe the actual progress made since Liberty Media’s initial proposal was first presented in Bahrain a year prior. Their responses, though carefully worded, offered subtle clues into the ongoing negotiations.
While all the expected diplomatic “right noises” were made during the press conference, it was Guenther Steiner’s straightforward statement that resonated most: progress had been made “in the understanding of what needs to be done that everybody agrees. And that is not written on paper.” This remark, delivered with Steiner’s characteristic bluntness, highlighted a critical point: agreement existed on conceptual necessities, but formal, concrete implementation remained elusive. It underscored the formidable challenge of translating broad consensus into detailed, actionable regulations acceptable to all.
Steiner’s comments, far from being dismissive, painted a clear picture: despite two years having passed since Liberty Media acquired Formula One Management and its commercial rights, the executives were still grappling with fully understanding the intricate business models and diverse interests of the teams. This learning curve, while perhaps inevitable given the sport’s complex political landscape, contributed to the protracted timeline for solidifying the new regulations. It suggests Liberty was still in the process of mapping the intricate power dynamics and financial structures that define F1.
Zak Brown’s response to the same question further fueled doubts about significant headway: “There has definitely been progress in that we now have a deal in front of us to react to…” The unstated implication was stark: it took an entire year simply to reach a stage where “a deal is in front of us.” This slow pace is particularly noteworthy given Liberty’s strategic recruitment of a substantial number of former team personnel over the past two years, individuals who possess invaluable insights into the various team business models and operational intricacies. Their expertise, seemingly, had not yet accelerated the negotiation process as much as might have been hoped.
An anonymous team boss, not present at the press conference, offered a revealing perspective, suggesting that this protracted timeframe might, in fact, be a calculated part of Liberty’s broader negotiating strategy. “By leaving it this late they’ve closed the window for Mercedes and Ferrari to try and start a breakaway series,” the source opined. However, this strategy carried a significant risk: “it does mean that F1 has backed itself into a corner with the FIA’s 18-month rule,” a critical regulatory clause that dictates the timeline for implementing major changes.
The source was, of course, referring to specific clauses embedded within the FIA’s International Sporting Code (ISC). These stipulations mandate an 18-month notice period for any 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.” This rule is only superseded by overriding covenants, such as a Concorde Agreement. The impending 2021 deadline meant that formal agreements needed to be in place well in advance, yet the sport was cutting it remarkably close.
The mere fact that no alternate agreements were in place with less than three months remaining before the clock began ticking down to January 1st, 2021, vividly illustrates just how ill-prepared the sport appeared to be for its supposed transformative year. This lack of readiness raised serious concerns about the smooth transition to the new regulatory framework and the stability of Formula 1’s future.
While it was understood last year that the ISC provisions could pose a challenge, Mercedes motorsport boss Toto Wolff publicly suggested that the teams were now seeking to delay the entire process. He told Sky, “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.” This proposal to extend the deadline, however, sparked immediate questions about the true motivations behind such a delay, especially given the apparent urgency of the situation. Critics questioned how long team lawyers needed to verify such an obvious legal point, particularly when numerous precedents exist within F1’s regulatory history.
Regardless of the underlying motivations, the deadline for 2021 rule changes could indeed be delayed, but this would necessitate unanimous agreement from all parties involved, including both the FIA and Liberty Media. Based on the sentiments expressed by some of Wolff’s peers in Bahrain, such a unanimous agreement seemed unlikely. Compressed timelines often disproportionately complicate matters for independent teams, who lack the extensive resources of the major outfits, as Williams recently experienced when current regulations were signed off late. This imbalance raises a pertinent question: Could the strategic advantage gained by larger teams from a delayed process be the fundamental cornerstone of Wolff’s proposed delaying tactic?
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From the mixed and often contradictory messages swirling around the Bahrain paddock, one fact emerged with absolute clarity: not one of the six key areas crucial for the 2021 regulations was anywhere near being fully sorted. While some aspects appeared closer to a final resolution, other critical areas seemed to have experienced a regression in progress since the previous year’s meeting, leading to growing concerns about the feasibility of the ambitious reform agenda.
A striking example of this disarray was evident when inquiries were made about the specific level of the proposed budget cap. Six different team bosses, all of whom had attended the very same meeting, provided six distinctly different takes on the matter. Their conflicting responses included wildly varying figures for the proposed cap, as well as significant disagreements over what would be included or excluded from the calculation. Some cited figures “under $200m all-in,” while another emphatically stated “way over.” Furthermore, there were non-committal answers regarding the sensitive issue of ‘pay drivers’: if driver salaries were to be excluded from the cap, would the income generated by pay drivers then be included? This lack of consensus on such a fundamental issue highlighted the deep divisions and unresolved complexities within the negotiations.
Indeed, one team boss even confessed to not knowing whether the proposed ‘glide path’ – a phased implementation strategy for the budget cap – would actually come to fruition. While it’s plausible they might have been feigning ignorance to maintain a strategic advantage, their candor on other, less sensitive aspects suggested a genuine lack of clarity on this crucial detail. This widespread uncertainty underscored the significant amount of work still required to finalize the intricate framework for Formula 1’s future financial landscape.
Nonetheless, drawing from the numerous off-record conversations conducted last weekend, the discernible progress made across the six key areas can be broadly summarized as follows, reflecting a nuanced picture of advancements and persistent challenges:
Governance
The overhaul of Formula 1’s governance structure is a direct response to what many considered a dysfunctional process, a system largely conjured by FOM, acting under the instructions of previous owner CVC Capital Partners. This old structure effectively excluded half the teams from meaningful participation in the regulatory process, fostering a top-heavy and often inefficient decision-making body. The new proposals aim to address these long-standing inefficiencies and ensure a more inclusive, albeit still tightly controlled, rule-making framework for the sport’s future.
Crucially, Ferrari will retain its long-held power of veto over regulation changes. However, this power will become “softer” and more precisely defined, effectively granting the legendary Scuderia the right of appeal to the FIA only “if the DNA of the sport changes substantially.” This nuanced adjustment aims to prevent trivial objections while safeguarding the core identity of Formula 1. As one source vividly described it, “The example used is the introduction of standard cars with V12s,” illustrating the extreme nature of changes that would trigger Ferrari’s softened veto.
The central pillar of the new proposal is a radical streamlining of the rule-making process. The cumbersome Strategy Group will be abolished entirely, and the current 24-member F1 Commission will be significantly reduced. It will be replaced by a streamlined body resembling a ‘Super Strategy Group,’ comprising only the FIA, FOM, and all participating teams. Each team will wield a single vote, while the FIA and FOM will command ten votes apiece. Notably, race promoters and technical/commercial partners will no longer have direct representation in this core decision-making body. Motions passed by this group will then be escalated to the World Motor Sport Council for final ratification.
While voting for most changes will operate on a simple majority basis (50 per cent plus 1 vote), a complex tiered voting structure is provisioned for major alterations or when exceptionally short timeframes are demanded. Despite the intended streamlining, concerns persist among teams that the new voting system remains heavily weighted in favor of the FIA and FOM. This imbalance, they argue, could place the teams at a significant disadvantage, limiting their collective influence on critical future regulations.
“I think the FIA is trying regain majority control, and who can blame them given the current debacle,” one insider remarked, acknowledging the motivations behind the power shift. However, they also cautioned, “But they risk alienating the teams in the process…” This sentiment underscores the delicate balancing act required to assert control while maintaining the cooperation and buy-in of the sport’s key competitors.
Readiness: 6/10
Revenue distribution
The distribution of revenue stands as one of Formula 1’s most contentious and historically inequitable areas. Although discussions centered on establishing a more equitable financial structure, team bosses widely felt that the final, critical details remained conspicuously absent from the proposals. The new system envisions bonuses still being paid, but at significantly reduced levels compared to current arrangements. Ferrari, for instance, is projected to receive around $50 million per annum, a substantial sum but likely less than their current earnings. Other teams would be compensated according to a newly devised heritage/performance table, a complex metric blending historic championship victories with rolling ten-year classifications. The intent is that, over time, every team could theoretically qualify for some form of bonus, fostering a sense of long-term opportunity and reward.
To illustrate this framework, consider the contrasting scenarios: unless Haas achieves consistently strong results in the near future, it is unlikely to secure substantial bonuses under the new structure. In stark contrast, Williams, a team celebrating 50 years in Formula 1 and boasting an enviable historic record of success, would be in line for various payouts based on its heritage, even if it currently places lower in the championship standings. McLaren would similarly benefit from its rich history, while Alfa Romeo/Sauber would qualify for heritage money but not necessarily championship performance bonuses. This nuanced approach aims to recognize both recent performance and historical contribution to the sport.
The proposed system would thus feature three primary payment categories: ‘Columns one’ and ‘two,’ mirroring the current prize money table’s foundational payments, alongside a new ‘column three’ specifically allocated based on the outlined performance and heritage criteria. According to one team boss, the total ‘pot’ for prize money, currently hovering around $1 billion, would still represent approximately two-thirds of the sport’s underlying revenues. Crucially, the payment from ‘column three’ would be significantly less than the existing bonus payments. This reduction would directly impact the traditionally highest earners – Ferrari, Mercedes, Red Bull, and McLaren – broadly in that order, as part of the effort to redistribute wealth more evenly across the grid.
Another notable change is the apparent scrapping of the proposed ex-gratia $10 million annual payment to engine suppliers. This decision, if confirmed, would represent a significant shift in how F1 compensates its power unit manufacturers.
A swift, informal poll conducted within the paddock indicated the anticipated financial impact: the top three teams (Mercedes, Ferrari, Red Bull) were estimated to be approximately $30 million per annum worse off under the new deal. McLaren could see a reduction of around $5 million, while mid-tier teams like Renault and Racing Point were projected to benefit, potentially gaining around $25 million annually. This suggests a clear intention to rebalance the financial landscape, offering greater stability and competitive potential to a broader range of teams.
Readiness: 7/10
Cost cap
The introduction of a cost cap is arguably the most transformative element of the 2021 regulations, intended to foster financial sustainability and a more level competitive playing field across Formula 1. However, as is often the case in such complex negotiations, “the devil lurks in the detail,” particularly concerning the comprehensive list of inclusions and exclusions from the cap, as highlighted earlier. This grey area remains a significant point of contention among teams.
Major teams, with their extensive payrolls, are strongly advocating for the exclusion of driver salaries, along with the earnings of up to three top executives, from the cap calculation. Their argument centers on the unique market value of superstar drivers and essential leadership. Conversely, an independent team boss articulately countered this, pointing out that while superstar drivers indeed bring invaluable lap time and marketing appeal, their salaries are not subject to the same restrictions as other performance-related activities, such as crucial wind tunnel hours or research and development spending. This creates an imbalance: “What sense in paying a driver $40 million per annum, but restricting wind tunnel time to 10 hours per week?” This question encapsulates the fundamental philosophical divide on how to best control costs without stifling innovation or talent.
A three-year ‘glide-path’ for the cost cap is widely anticipated, proposing a gradual reduction in spending limits: initially $200 million, then $175 million, and finally $150 million per season. However, the contentious raft of potential exclusions could easily push these figures significantly higher in practice. Realistically, if certain major items are excluded, the effective cap could look more like $250 million, $225 million, and $200 million over the same period. Even at these higher realistic figures, the cap still represents a substantial reduction from what Formula 1’s richest teams were reportedly spending in 2018, marking a significant step towards reining in the sport’s notorious financial arms race and promoting greater fiscal responsibility across the grid.
Readiness: 6/10
Sporting regulations
The proposed changes to sporting regulations present what could be described as a ‘curate’s egg’ – good in parts, but flawed in others. On one hand, modifications concerning on-track and weekend activities generally require minimal or no additional investment, making them relatively straightforward to implement. These often aim to enhance the fan experience and streamline operations. On the other hand, regulations pertaining to cost, manpower restrictions, and the introduction of listed and standardized parts (which technically fall under sporting elements due to their operational impact) pose a potentially contentious “hornet’s nest,” involving complex negotiations and significant resistance from teams concerned about their competitive edge.
One clear outcome is the condensation of weekend timetables, a move designed to reduce the time teams spend away from their factories and minimize logistical costs. Although events will still technically span four days, programs are expected to commence later in the day, allowing teams to potentially arrive a day later. Anticipate first practice sessions to start after Friday lunch, with second practice extending into the evening. Various running changes to qualifying formats and tire usage regulations are also on the horizon, aiming to inject more unpredictability and excitement into race weekends. Fortunately, a much-feared ‘qualifying race’ concept, which had been previously threatened, appears to have been definitively scrapped, much to the relief of many traditionalists and teams.
On the off-track side, further restrictions are planned with the explicit goal of reducing manning levels and associated operational costs within teams. This is a crucial area for smaller teams looking to compete more effectively. However, the single most significant sporting regulation, due to its overarching financial impact, remains the implementation of the comprehensive cost cap, which fundamentally underpins all other efforts to control spending and promote a more sustainable competitive environment within Formula 1.
Readiness: 5/10
Engine regulations
Regarding engine regulations for the post-2020 era, there is effectively little substantive change from what was eventually agreed upon last year. This outcome followed the concerning revelation that no new manufacturers had expressed concrete interest in entering Formula 1, despite proposed changes specifically aimed at reducing the costs of entry. These earlier proposals, ironically, would have imposed significant development costs on existing suppliers, creating a disincentive for their support and ultimately leading to their shelving.
Therefore, expect the engines used post-2020 to remain largely similar to the present power units, ensuring a degree of stability and predictability for manufacturers. These existing engines will, however, be subjected to a revised sporting code that includes new dynamometer restrictions and other stringent cost-saving regulations. This approach aims to cap expenditure on current engine development without necessitating a complete redesign. The overarching long-term plan is now clearly focused on a major engine revamp in 2025. By then, the current crop of power units will have seen service for an extensive 12 years, making a comprehensive technological refresh both timely and necessary to keep Formula 1 at the cutting edge of automotive innovation and appeal to potential new manufacturers.
Readiness: 8/10
Technical regulations
The plans for significant changes to Formula 1 car body shapes represent a cornerstone of the 2021 regulations, primarily driven by the imperative to improve racing spectacle. These ambitious aerodynamic overhauls are largely based on extensive research undertaken by FOM’s dedicated technical team, expertly led by Pat Symonds, working in close conjunction with Nikolas Tombazis, the FIA’s head of single-seater technical matters. Their efforts have been further supported by detailed studies commissioned from various teams, contributing to the advanced stage of finalization for the 2021 technical regulations. The core objective is to design cars that can run together much more easily than at present, promoting closer wheel-to-wheel action and more overtaking opportunities.
This collaborative research has culminated in two distinct chassis concepts, internally code-named ‘Hotel’ and ‘India.’ Both concepts are engineered to dramatically reduce the aerodynamic turbulence (dirty air) experienced by a trailing car, a long-standing issue hindering close racing. Key features of these designs include significantly simplified front and rear wings, a complete absence of complex barge boards, and a renewed emphasis on powerful ground effects combined with large diffusers to generate downforce from underneath the car. Further aerodynamic refinements are expected, such as covered wheel rims to minimize drag, faired-in halos for improved integration and aesthetics, and possibly small canard fins for fine-tuning airflow. These elements collectively aim to create a more robust aerodynamic platform that is less susceptible to performance degradation when following another car closely, thereby enhancing the racing product.
Looking ahead, an evolved ‘India 2’ concept is slated for completion and presentation in May. This crucial iteration will provide the final details required for the outline regulations to be formally submitted to the World Motor Sport Council (WMSC) by the end of June. This timeline ensures that teams will have sufficient, albeit still tight, lead time to begin designing and developing their 2021 challengers in accordance with the new rules, marking a fundamental shift in Formula 1’s aerodynamic philosophy.
Readiness: 7/10
Overall readiness: 7/10
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Conclusion
Until all the intricate keys required to unlock the various and deeply interconnected areas of Formula 1’s 2021 regulations are fully available and agreed upon, it remains inherently impossible to accurately gauge the true progress made. It is unequivocally clear that much still remains open for negotiation and refinement, particularly given that many regulatory areas are intimately interrelated. Adding to this complexity, not all aspects are directly regulated by the FIA’s International Sporting Code. For instance, while the new regulations may impose stringent cost restrictions on teams, the crucial prize money ‘pot’ – the very lifeblood for many – falls entirely outside the FIA’s direct ambit, yet it ultimately and profoundly influences teams’ overall spending capabilities and competitive strategies. This interplay between financial and sporting regulations demands a holistic and finely tuned approach.
So, where does Formula 1 go from here? While no formal meeting date has yet been publicly set for the next round of comprehensive discussions, the teams already convened for an informal breakfast meeting in Bahrain on Sunday, signaling their intent to continue dialogue. Another important meeting is scheduled for today at 2 pm at Racing Point’s headquarters, though indications suggest that most team bosses will teleconference in rather than travel, highlighting the ongoing effort to balance urgent negotiations with practical logistical considerations. It is widely anticipated that numerous informal meetings will be called during upcoming grand prix weekends, with a particularly significant one expected on Monaco Friday, a traditional hub for high-level F1 discussions.
In the final analysis, the strategic maneuvering by the FIA and FOM appears to have largely achieved its immediate objective: successfully staving off the looming threat of a breakaway series, a perennial concern in Formula 1’s political landscape. Simultaneously, they seem to have managed the delicate task of keeping powerful entities like Ferrari and Mercedes onboard, preventing their potential departure. While both major manufacturers may still theoretically exit F1 in the future, the new regulations, as currently proposed, provide no justifiable excuse for them to do so. Equally significant, the independent teams across the grid have reason to smile; these reforms offer them a renewed fighting chance to compete more equitably, fostering a healthier and potentially more diverse competitive environment.
It seems, then, that Formula One Management (FOM) has adeptly navigated the treacherous waters of stakeholder interests, achieving its pragmatic objective of making everybody only a little bit unhappy. This delicate balance, while not generating outright jubilation, suggests a workable compromise that could pave the way for a more sustainable, competitive, and exciting future for Formula 1 as a whole, addressing key concerns without completely alienating any single party.
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