F1 teams 20217/10/2023 ![]() On the other end of the spectrum, Mercedes, Ferrari and Red Bull won’t simply be able to spend their way out of problems anymore. The new budget cap is just a bit below what a midfield team like Alpine, which is backed by Renault, typically spends while smaller teams like Aston Martin, Haas and Williams have room to raise their expenditures. ![]() Haas' Mick Schumacher making a pitstop during the British Grand Prix at Silverstone on July 18. “Knowing going into the competition, knowing that you will be last doesn’t make sense. “If you have no chance, why would you do it?” says Steiner, who acknowledges that the possibility of luring Russian fertilizer company Uralkali as a sponsor was a factor in Haas’ decision last year to sign the driver Nikita Mazepin, whose father runs it. It was a feedback loop from which teams like Manor and Force India, which both crashed into bankruptcy, and Lotus, which was forced to sell for pennies on the dollar, couldn’t escape. Without a war chest to upgrade their cars, the smaller teams sank further in the standings. And sponsors had relatively little interest in partnering with teams that couldn’t consistently put their drivers on the podium. On the revenue side, F1 used a formula that funneled much more of the revenue collected from things like media rights and race-hosting fees to winning teams than to outfits at the bottom of the standings. By contrast, the powerful brands that owned the top teams chalked up the staggering costs as a marketing expense that ensured their logos were plastered on TV screens. “There are years where we had $5 million, $6 million, and I am sure the others had hundreds of millions of discretionary spend on car improvement,” says Otmar Szafnauer, CEO of the newly rebranded Aston Martin Cognizant, one of F1’s smallest teams with about 550 employees. First, while they could cover the basic costs of competing like tires, fuel and team travel, they had limited cash to devote to designing and testing their cars or to hiring problem-solving engineers. ![]() The problem for the smaller teams was twofold. “If you have no chance, why would you do it? Knowing going into the competition, knowing that you will be last doesn’t make sense. “Without that coming in place? I think we wouldn’t be here anymore,” says Steiner, whose team received a renewed commitment last year from owner Gene Haas to stay in the series amid speculation that he might walk away. But it is a lifeline for the series’ other seven teams, which typically spent half or even a third as much as the big three and which, in the words of Alpine Racing CEO Laurent Rossi, had been “almost doomed to stay in the midfield.” That is forcing huge cuts at F1’s three biggest teams-Mercedes, Ferrari and Red Bull Racing-whose spending had soared past $400 million a year apiece, with more than a thousand employees at each team. With new regulations being implemented this year, the series’ smaller teams have reason to believe that they can finally begin competing in a real way in the near future, a hope that could not have existed in recent years-or perhaps at any other time in F1’s history.Īfter a years-long argument over costs, Formula 1 introduced a budget cap for 2021, set at $145 million this season in the wake of the pandemic and dropping to $135 million by 2023. Sure, Haas has a weak car getting weaker in a transitional year and is emerging from a once-in-a-lifetime global economic disaster, but there are changes afoot in Formula 1. Mark Thompson/Getty ImagesĮven so, he can’t help feeling optimistic-as optimistic as he was when he was first putting the team together in 20. Haas F1 Team principal Guenther Steiner ahead of testing in Bahrain in March.
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