Pit lane in qualifying before the Formula 1 Austrian Grand Prix in July.
Peter Fox / Getty Images
By Brett Knight
For years, Mercedes, Ferrari and Red Bull invested massive budgets to keep the top of the F1 rankings in a stranglehold. But new rules are limiting spending, and smaller teams are finally believing they can keep up.
Günther Steiner knew that this would be a tough season. His Uralkali Haas team ended up last in Formula 1, and the pandemic had only increased the financial pressures faced by a small company with a tight budget that it decided to stop developing its 2021 car giving up and saving your car Resources for Design 2022.
Since the team couldn’t get a single point in ten races, it was just as bad as expected – but somehow worse.
“Do you know how much I’ve aged in the last six months?” Steiner, the 56-year-old team boss at Haas, smiles. “Look at my hair – I went completely white.”
Haas F1 team boss Günther Steiner before the tests in Bahrain in March.
Mark Thompson / Getty Images
Still, he can’t help being optimistic – as optimistic as he was when he first put the team together in 2014 and 2015. Sure, Haas has a weak car that gets weaker in a transition year and a multiplication table – a lifelong global economic disaster, but changes are underway in Formula One. With the introduction of new regulations this year, the smaller teams in the series have reason to believe that in the near future they can finally get started with real competitions, a hope that couldn’t have existed in recent years – or maybe to another Point in the history of F1.
After years of dispute over costs, Formula 1 introduced a budget cap for 2021, which this season set at $ 145 million in the wake of the pandemic and will drop to $ 135 million by 2023. That forces massive cuts in the three largest F1 teams – Mercedes, Ferrari and Red Bull Racing – whose spending had risen to over $ 400 million a year, with more than a thousand employees on each team. But it’s a lifeline for the other seven teams in the series, who usually spend half or even a third as much as the big three and who, according to Laurent Rossi, CEO of Alpine Racing, “were almost doomed to be in midfield to stay”. . “
“To come without that? I think we wouldn’t be here anymore, ”says Steiner, whose team received a renewed commitment from owner Gene Haas last year to stay on the series, despite speculation that he might leave.
“If you don’t have a chance, why should you? Knowing how to go into the competition, knowing that you will be the last one, doesn’t make any sense. It would be madness. ”
Günther Steiner, Haas F1 team boss
The problem for the smaller teams was twofold. First, while they were able to cover basic competition costs such as tires, fuel, and team travel, they had limited resources to develop and test their cars or hire problem-solving engineers. “There are years when we had $ 5 million, $ 6 million, and I’m sure the others had hundreds of millions in discretionary spending on vehicle improvement,” said Otmar Szafnauer, CEO of the newly renamed Aston Martin Cognizant, one of the smallest teams in Formula 1 with around 550 employees. In contrast, the powerful brands that the Top teams booked the incredible cost as marketing expenses that got their logos posted on television screens.
On the revenue side, Formula 1 used a formula that channeled much more revenue from media rights and race hosting fees to the winning teams than to the outfits at the bottom of the table. And sponsors had relatively little interest in working with teams that couldn’t consistently get their drivers onto the podium. Without a war chest to upgrade their cars, the smaller teams continued to drop in the overall standings. It was a feedback loop that teams like Manor and Force India, both of which went bankrupt, and Lotus, which was forced to sell for pennies on the dollar, couldn’t escape. The crisis became existential.
“If you don’t have a chance, why should you?” says Steiner, who recognizes that the opportunity to sponsor Russian fertilizer maker Uralkali was a factor in Haas’ decision last year to sign driver Nikita Mazepin, whose father runs it. “Knowing how to compete, knowing that you will be the last, doesn’t make sense. It would be madness. “
Mick Schumacher from Haas makes a pit stop at the British Grand Prix in Silverstone on July 18th.
Mark Thompson / Getty Images
All of this is starting to change.
The new budget cap is just a little below what a midfield team like Alpine, backed by Renault, typically spends, while smaller teams like Aston Martin, Haas and Williams have room to increase their spending. At the other end of the spectrum, Mercedes, Ferrari and Red Bull will no longer be able to simply work their way out of the problems. “When suddenly everyone has the same number of hours, the same number of men, and resources to work, the reward might go to the people who are more creative than the people who just burn the midnight oil,” said Rossi of Alpine says, adding, “It’s not so much a ‘let’s bomb the field of possibility’ but more of a direction and hopefully this is the right one.”
The smaller teams’ enthusiasm is fueled by the expectation that they might actually start making money in a sport that has traditionally been a great way to lose money. As part of the new Concorde agreement – an agreement signed by the teams last year that sets out the structure of the series for the 2021-2025 seasons, including the introduction of the budget cap – Formula 1’s core revenue will be distributed more evenly to the teams paid across the table.
Aston Martin drivers Sebastian Vettel (right) and Lance Stroll at the unveiling of the prototype for the 2022 F1 season on July 15.
Michael Regan / Getty Images
That is not to say that the playing field is completely even. Certain costs – like driver salaries, engines, and marketing – are excluded from the budget cap, and Szafnauer estimates that taking these uncapped items into account, the budgets of the leading teams are likely to be about $ 100 million higher than the official cap. That may sound like a lot and it is, but the smaller teams are happy about every progress.
In the short term, Mercedes, Ferrari and Red Bull also take advantage of the staff, knowledge base, facilities and infrastructure they built before the cost cap was set. Szafnauer says his team won’t be fighting for the championship in the next three or four years, pointing out that it took Red Bull five years to win after buying the Jaguar team in November 2004 and that Even the mighty Mercedes took four years later, Brawn took over in November 2009.
Alpine Fernando Alonso overtook Aston Martin’s Lance Stroll in the Austrian Grand Prix on July 4th.
Jure Makovec / SOPA Images / LightRocket via Getty Images
Still, there are some positive early signs that the teams will be on a more balanced footing. Aston Martin plans to hire another 250 employees, is building a new factory and designing a new wind tunnel. Williams, whose founding family was forced to sell the team under financial constraints last year, has received a cash injection from new owner Dorilton Capital, which, according to team CEO Jost Capito, will be used to modernize the company’s IT structure and machinery as it “redefines” the Williams brand and prepares to hunt for new sponsors.
Especially with dramatically different technical regulations in the next year – which means that all ten Formula 1 teams with their car designs will essentially press the reset button – these smaller teams believe they can finally accelerate.
“It’s no longer a dream,” says Steiner. “It’s hard work.”
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