Formula 1 will have a cost cap from 2021 – a welcome move at least a decade in the making. But, somehow, the next generation now need a helping hand.
Formula 1 has finally responded to spiralling costs that have created a disparity. From 2021 there will be a spending cap of $145m and by 2023 this figure will reduce to $135. Sure, there are some exemptions, while clever folk will be scrutinising what rules can and cannot be bent. And the figure is still high – $2.5m per week to fund an F1 team. But medium- and long-term it will have a positive effect. Manufacturers will no longer have to justify astronomical budgets to their boards. Privateer teams will be on a more level financial playing field. It may also be more enticing to new entrants. Formula 1 has had just one new entrant in 10 years – Haas F1 Team – and no junior squad has even remotely looked at stepping up. The likes of Red Bull Racing, Racing Point, Renault and AlphaTauri can all trace their roots back to junior competition. We may not have them without a junior boss taking the plunge.
The gap has widened between Formula 1 and the rest to the extent that no right-minded junior team would contemplate stepping up. A couple of years an off-the-cuff remark to one junior boss about a speculative Formula 1 voyage was met with a dismissive laugh. It would be financial suicide. After all, some top teams in junior competition have all looked elsewhere: DAMS and Campos to Formula E, Carlin to IndyCar, ART to DTM. The difference in budgets and resources is enormous – but the cost of competing in junior formula remains eye-wateringly high. And as it is a business that gets passed onto the driver.
For the who-knows-what-will-happen 2020 season budgets are into the seven figures for a driver in pursuit of a top Formula 3 seat. Double that, at least, for the next category up. Then add into the equation other assorted costs, such as travelling, equipment, trainers, along with private test days for those who can afford it, and you can see where the expenses add up. Even the lower-level series, the likes of national F4 categories, FREC, or the stepping stones on the IndyCar ladder, command sums comfortably into six figures. At karting the sums have also rocketed. Mercedes boss Toto Wolff put a figure of $10m on backing a driver from karting through to the brink of Formula 1.
To make it in Formula 1 in the modern era drivers have increasingly required the finances of wealthy parents or the backing of a driver academy, whether run by teams or passionate investors. Most on those academies have earned, rather than bought, their places. There are stories of hardship and sacrifice up and down the grid during the early years. The likes of Charles Leclerc, Alexander Albon, Esteban Ocon, Pierre Gasly and Antonio Giovinazzi all faced potentially career-ending crossroads before finding backers on account of their talent. They are the good news stories now that they have made it. Many others faced insurmountable hurdles or did not get the break. It is not a slight on those who did have backing, and who still performed, put in the hard work, and claimed honours – such as Lando Norris, Lance Stroll or Nicholas Latifi – but more that motorsport is an environment where it is very easy to slip through the net. And, after all, the wealthier a driver is, the more likely they are to land a seat in a better team. Under some arrangements a well-backed driver may help subsidise the seat for their team-mate in return for experience or understanding. It is impossible to criticise a team for taking such an approach: it is business. Nor are the wealthy drivers hateful and arrogant, as some like to believe. Frequently they are personable and well-rounded individuals. But fans, in any sport, want to witness the best. Long-term, the desire to unearth the very best of the very best should be a target for Liberty Media.
During an interview with The Telegraph, in 2011, then Arsenal manager Arsene Wenger drew parallels between his sport and Formula 1 with regards to young talent, commenting: “Plenty of people have talent in life but they do not meet someone who gives them a chance. Can you name one Formula 1 driver from an African country, apart from South Africa? And can you really imagine that there is not one guy in Africa with the talent to be a Formula 1? Why are they not there? Because no one has given them a chance. So in life it’s important to meet someone who will give you a chance, and when I can do this in football, I do it.”
The difficult situation has not gone unnoticed within the sport itself.
“I think where Formula 1, where motorsport has gone now, if you look at Formula 3, it’s not the same as it used to be,” said Formula 1 World Champion Lewis Hamilton last year. “Formula Renault, for example, isn’t the stepping stone that it used to be. It’s now GP3, GP2 [sic: F3, F2] those things are continuously getting more and more expensive and they don’t need generally need to be. Karting’s getting more and more expensive when it doesn’t really need to be.”
An added complication is the pandemic, which has also left junior motorsport facing a perilous situation. Formula 1 teams are braced for a financial hit based on the absence of race fees, which makes up a chunk of revenue, but that is alleviated to a degree by sponsorship and broadcast contracts. In juniors the teams are effectively dependent on the money a driver (or driver academy) can bring – ostensibly through a sponsor. And given the global situation sponsors are going to be particularly hard to come by, especially as youngsters will be racing in front of zero trackside spectators, while those restrictions mean there will be no track access for sponsors or partners. It will also not help those with Formula 1 affiliations, or prospective Formula 1 hopes, that under the Closed Events regulations they will not have access to the bigger paddock, but that’s another discussion point.
“We talk about the budget cap but nothing was for Formula 2, they didn’t change the price of the fee of anything,” Jean Alesi, whose Ferrari-backed son Giuliano competes for HWA in Formula 2, told Sky Sports recently..
“So I’m sure a lot of drivers will not finish the season and that will be a disastrous season for the Formula 2 and Formula 3 drivers.”
Alesi’s prediction is likely to come true. In normal seasons drivers are regularly unable to stump up the budget, leading to regular chopping and changing, especially during the latter rounds. Consider that Formula 2 has eight rounds in just a 10-week spell, placing an unprecedented strain on the financial belts of both drivers and teams. And that these teams have had to invest in new hygiene measures and logistical arrangements.
“I hope in this big mess something will change and will give the opportunity of these drivers who make a big investment not only on the money side but also in the life side because they quit school, they quit university because they dream to be a racer and nobody is looking after them,” concluded Alesi.
Formula 2 and 3 has helped teams through the pandemic, with CEO Bruno Michel confirming to the official Formula 1 website that invoices for parts and assistance had been frozen, with thanks to suppliers further down the chain, due to the financial stress. The fact all F2 and F3 teams, and original drivers, are so far still signed up for the Austrian opener is a stellar achievement. But now should be the time to look long-term.
Formula 1 has always been an exclusive club (which is part of its USP) and while there is an element of a meritocracy – no useless driver becomes a World Champion – the increasing financial hurdles at a lower level are becoming more concerning. Now that Liberty Media has got the Formula 1 cost cap over the finish line it might be a good time to bolster the health of its junior divisions, and grass roots competition, to ensure the next generation are as worthy as the last.
