Could F1 lose any teams? Will the budget cap be reduced? Who’s holding up negotiations? And why teams should want battle on ‘equal terms’; Brown and Brawn debate on the Sky F1 Vodcast
Formula 1 and its teams can “survive, and thrive” after the coronavirus crisis, according to Zak Brown – although the McLaren boss urged the sport to make “aggressive” decisions on its financing and budget cap during an in-depth debate with Ross Brawn on the Sky F1 Vodcast.wn, Brawn and Sky F1’s Martin Brundle and Simon Lazenby spoke at length about F1’s next steps as it deals with an enforced delay to its season due to a coronavirus pandemic which has ravaged the sporting calendar.As well as Brawn’s comments on when and how the season could start, topics on the show, which you can watch at the top of the article, included:
- Why Brown believes F1 could lose teams, but why it also could flourish if the right decisions are made
- Brawn on making the sport economically viable for all of its teams and given them an “exciting” reason to continue
- Brown and Brawn in agreement that budget cap should be reduced
- Why bigger teams should stop being “heavyweights fighting middleweights” and embrace a battle with others on “equal terms”
The 10 F1 teams have been regularly communicating with F1 and the FIA to discuss the season and cutting costs, among other things, and Brown provided an intriguing insight into those meetings – while also claiming that the current crisis provided a wake-up call for everyone involved in the sport.
“I think in life when you have something that’s hit you, a crisis or an issue, you can either run towards it and try and solve the problem or run from it,” said Brown, the McLaren F1 CEO.
“And I think the industry as a whole is running towards the issue.
“But we also know that the business model of Formula 1 has really not been sustainable for a long time and I think it does kind of take an event like this to maybe wake everyone up and realise we now don’t have the luxury that we have had in the past.
“And we need to make some tough, aggressive decisions to give all the stakeholders who are committed to Formula 1, the confidence and the reason to continue to stay committed.”
Brawn, F1’s managing director of motorsports, agreed: “It’s going to be painful but the sport will have a future.
“And I think actually we’ll come out of it in a much stronger place once we come through this.”
Could F1 lose any teams?
Brown insisted that F1’s issues stretch far beyond “just levelling the playing field” and decreasing the gap between the top three teams and the rest, a comment which backed up his quotes to the BBC earlier this week where he feared that four teams could leave the sport if the financial model stayed as it is.
Brown stood by that statement on the Vodcast, while also saying that F1 has a positive future if changes are made.
“Unfortunately I think [losing four teams] is realistic if we don’t handle the situation appropriately. But I think we can get through this and lose no teams.
“We’re fortunate that the majority of the owners in Formula 1 have the means to continue and get through this, which is a very big speed bump. However, if they don’t like what Formula 1 looks like coming out of this, then what’s their motivation to stay in the sport? The Saubers [Alfa Romeos], the Haas, these teams want to be competitive. They have the means to stay in the sport, the question is more do they want to stay in the sport?
“From a McLaren standpoint, we’re quite a big brand, an iconic team, but we don’t have an unlimited chequebook. I’ve got the boundaries with which I’ve been tasked by our shareholders, I need to create value for them. What I don’t have is the ability to continue in F1 at any and all costs.
“But if I can go back to my shareholder base and say, this has impacted all of us but F1 is going to be an economically more viable sport, a more competitive sport – then I’ll get a tremendous amount of support to get through this.
“I think if we don’t handle it right we could lose teams. I think if we handle it right, which I think the majority of the people in F1 know what that looks like, then I think not only can we survive, I think we can thrive.
“That’s the frustrating part when you get together with everyone. A very successful Formula 1 is there for the taking, we just need to make sure we don’t make any mistakes.”
Brawn was adamant that the commercial model F1 are presenting for the future is “much better” for the smaller teams.
“We need the teams to survive, we need them to feel that they’ve got a future,” said Brawn. “But even so [team owners] are going to have to support their teams in the short term.
“If you’re supporting your team and the prospect is to run around at the back of the grid, it’s not a very exciting prospect.
“With a new car and a new economic model, particularly the income, we are making the sport much more attractive for teams of that sort.”
Brawn and Brown want reduced F1 budget cap
Key to that economic model is the budget cap. The limit on spending – currently set at $175m (£141m) – will be introduced next year in a bid to give the teams behind Mercedes, Ferrari and Red Bull a chance to compete with their big-spending rivals.
But there are now negotiations – due to the financial concerns coronavirus has brought – to significantly lower the cap further, back to what F1 initially presented two years ago – around $130m a year.
“The COVID crisis has created an opportunity to really take a second look at what’s a realistic and sensible level of the budget cap,” explained Brawn. “And it’s allowed us to renegotiate again with extra motivation and extra commitment.
“I think when we introduced the budget control there was always the anticipation that if we had a crisis we could turn the dial down. The dial has been set at 11 for too long. We need to wind it down.”
“We said this [sort of crisis] was what the budget cap was for when it was introduced, we’re there sooner than anyone hoped or wanted, but we are there now and it would be irresponsible to ignore it. We’ve all got to respond.”
Brawn compared the budget cap to football’s use of Financial Fair Play, while Brown agreed that the figure presented to the teams in Bahrain two years ago was “where the sport needed to be”.
“If we look at where conversations are now, that’s effectively what we’re headed back to,” he added. “We weren’t able to get that through in Round 1 but maybe it takes the situation we are in now for everyone to wake up and realise that what Formula 1 presented a couple of years ago was spot on, and while maybe we didn’t have the luxury of not doing it then, today the world has changed and we need to do it.
“I think it will be great for Formula 1, I think a more competitive Formula 1 will drive more fans, which means more sponsors, which means more countries want to have Grands Prix. And so we all win.”
Are two teams holding up negotiations? Brown on why they should want to fight on ‘equal terms’
Brown said the majority of the grid were in agreement about a reduced cost cap but that two teams – who he heavily inferred were Ferrari and Red Bull – still wanted a higher budget for all teams.
Ferrari boss Mattia Binotto said that F1 should avoid an “emotional” cost-cap decision.
But Brown said: “Without 10 teams or at least 9 teams you don’t really have Formula 1. So I think these, it’s really a couple of teams, need to be very careful because I think they’re playing with fire. It takes a full grid to have a sport. “If they continue to have the sport be unsustainable and a couple of teams lose interest and are financially not able to participate any more, then they’re going to be racing against themselves and that’s not going to work.”
The McLaren chief compared the current situation to being a heavyweight boxer fighting against a middleweight.
“I think they need to be confident in their capabilities,” he added. “It’s a huge marketing platform for those two teams so I understand why they want to keep the fiscal balance where it is now.
“But in sport you kind of want to think everyone can fight fairly, and may the best team win. I still think the biggest and best teams, biggest brands, are going to attract the best drivers, the best engineers. Right now the gap between the front and back is seconds, and in IndyCar it’s tenths.
“We shouldn’t have to rely exclusively on [weather and Safety Cars] to have an unpredictable race. It should be that another team can have a better strategy, catch the Safety Car at the right time, capitalise on someone having a bad pit-stop.
“I think [the top teams] need to have confidence. It’s like a heavyweight only trying to fight middleweights. These are great teams, they should be prepared to fight everyone on more equal terms.”