The new Formula One 2021 regulations don’t work

The long-awaited regulation changes for the Formula 1 2021 season were unveiled by the FIA (Federation Internationale de l’Automobile) during a press conference on 31 October. The changes were presented by FIA President Jean Todt and Ross Brawn, the senior figure behind the new regulations.

Currently the Motorsport and Technical Director of the Formula One Group, Mr Brawn, spent the last two years crafting a new set of technical and financial regulations in order to bring sustainability and competition to the sport.

While the technical regulations will have a profound impact on the F1, the financial rule changes have stolen the spotlight.

For the first time in the history of the sport, a spending cap has been introduced, inspired by leagues such as the NFL, with severe consequences if teams are found to breach the cap.

The FIA aims to level the field and allow mid and lower table teams to compete more consistently with the teams at the top of the grid.

Starting from 2021, constructors will have a $175 million budget (around £137 million) per season and this will cover everything under the umbrella of car performance, from the development to the construction and upgrade of the car.

The budget cap does not include the salary of the drivers, marketing and the expenses of the top three people in management.

It is not clear however, how the budget cap is going to affect the operations of the current four engine suppliers (Ferrari, Mercedes, Renault and Honda).

While a step in the right direction, the truth is that seven of the teams to this day do not reach the $175 million budget meaning that, while the top three teams (currently with budgets in the range of $400 million) will be limited in their spending, they will still outspend the rest of the grid by large margins.

The only solution for the financial disparity in the circuit is a rework of the shared revenue system, which is universally agreed to be the main cause for the disparity in performance between the big three and the rest of the grid.

In short, the top three teams receive a disproportionately large share of the circuit revenue at the end of each season due to bonuses and extra payments negotiated in the 2009 and 2013 Concorde Agreements.

To give an example from last year, Williams received 25% of the share compared to Mercedes or Ferrari.

This, in comparison with the Premier League 2018/19 which awarded bottom team Huddersfield Town a share 65% the size of Manchester City, the top placed team in the league.

The current system also operates a number of bonuses for the top four teams allowing teams like Ferrari, Mercedes and Red Bull to consistently receive the largest share of the revenue, even after underwhelming seasons.

If the FIA actually wants to increase the level of competition, especially between mid-table and top teams, there has to be a rework of the prize money distribution system in order to stop the richer teams from consistently outperforming the rest of the grid solely by outspending them.

Hopes are high for the 2021 season, with the FIA confident in their promises to deliver closer and more exciting races, but there is still a long road ahead with clear obstacles that will need to be confronted, sooner or later.

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Marco Rizzo

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June 2022
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