Formula 1, its cost cap and the issue of customer cars

The COVID-19 outbreak has made many industries think about their current sustainability and what, if anything, needs to be introduced to ensure survival. Motorsport has been no different with a variety of series introducing cost saving measures in order to make sure that they retain as many teams, venues and sponsors as possible once the world has seen the back of the pandemic.

One of those series that has been active in attempting to react has been Formula 1 which introduced measures such as delaying new technical regulations, bringing forward and extending factory shutdown periods for teams as well as mandating that the 2020 cars be used for the 2021 season.

Formula 1 has also lowered the cost cap it is going to introduce in 2021 although there has been calls for this to be lowered even further. One team that has called for a further reduction has been McLaren who have stated that a cost cap of $100 million should be introduced.

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This hasn’t pleased Ferrari who, through its current team principal Mattia Binotto, have once again raised the possibility of the Italian team leaving the sport should the cost cap go, in its view, too far resulting in the laying off of staff. Binotto went on to suggest that introducing customer cars would be a better alternative than a further reduction in the cost cap. This didn’t impress McLaren’s Zak Brown who felt the idea of customer cars belonged to the 1970s.

Brown is incorrect in this regard as the Super Aguri Formula 1 team that competed in the sport from 2006 to 2008 used slightly reworked year old Honda F1 Racing chassis’s for the 2007 and 2008 season. It is also worth noting that when Prodrive aimed to enter the sport in 2008 they had intended to take a customer supply of McLaren chassis’s before a legal challenge from Williams meant the project was ultimately abandoned. These are just two recent examples without getting into the murky debate over whether the likes of Haas, Alfa Romeo, Alpha Tauri and Racing Point are effectively running customer cars due to their close ties with the likes of Ferrari, Mercedes and Red Bull.

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Binotto does have a point in that Formula 1, and other series to that extent, can’t solely rely on cost caps as a way of mitigating the medium to long term impact of the current pandemic.

With the current crisis the likes of Formula 1 finds itself in it is important that ideas aren’t quickly dismissed just yet and this, I personally feel, definitely applies to Formula 1 and the topic of introducing customer cars. This topic was likely to get a lot of debate during the 2020 season anyway due to Racing Point’s RP20.

The debate over customer cars in Formula 1 is one that needs to be had, especially in the wake of the current crisis as the introduction of customer cars, done correctly, could be beneficial to the series.

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Brown is right that the sport has had a long history of focusing on constructors but that should not stop Formula 1 embracing customer cars. It feels as if part of the resistance is down to the fear of some teams that they will have a reduced income while incurring the extra cost of designing and building its own car.

This could potentially be mitigated by the FIA and Liberty Media introducing a Teams’ Championship to run alongside its Constructors’ Championship. It would then likely be a case of adjusting the terms of the Concorde Agreement so that teams receive income from their position in the Teams’ Championship while, assuming they have built their own car and are therefore eligible for the Constructors’ Championship, receiving an additional and potentially higher amount of income from its place in the Constructors’ Championship.

It would likely mean that teams such as Ferrari, Red Bull and Williams would need to forfeit any sort of ‘legacy’ or special payments they currently receive from the Concorde Agreement as this money would go towards paying those three teams, and likely a couple of others, competing in the Constructors’ Championship.

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This is what is slightly baffling and frustrating about the resistance of introducing customer cars into Formula 1 as, on face value, it wouldn’t be too difficult to accommodate while ensuring that those incurring the extra cost of constructing their own car are financially rewarded and, to a certain extent, protected.

Protecting the current teams is important however should a couple of them leave the sport it is surely then important for the FIA and Liberty Media to ensure that the ‘barrier to entry’ is low enough that it does not deter anyone thinking of entering the sport. Making it easier or quicker to increase the number of cars on the grid.

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It is worth noting that prior to the COVID-19 pandemic there had been a few reports of either new teams being formed or a team in a junior category establishing a Formula 1 operation for either 2021 or 2022. This interest was partly achieved through the new financial regulations, but could be aided with the introduction of customer cars. The FIA and Liberty Media may have dampened some of the rumours of new teams imminently joining, potentially in part due to the uncompetitiveness and fate of the teams that entered the sport in 2010, but it is surely worth as a form of backup to retain interest from prospective new teams.

In the wake of the pandemic and even before it with the introduction of the cost cap in Formula 1, teams were going to be faced with making some difficult, and likely, unpopular decisions. This includes the laying off of potentially substantial numbers of its current workforce, if there isn’t scope or there is unwillingness to retrain and redeploy staff elsewhere within a team. The further lowering of the cost cap and the potential introduction of fully fledged customer cars are just another two issues that the sport will need to have a measured and likely extensive debate about, potentially having to come to an unpopular but ultimately correct decision.

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