Plans to make Formula 1 'more competitive' from 2021

Owners Liberty Media and governing body the FIA are to introduce a budget cap and restructure revenue distribution to try and make F1 more competitive. The agenda for the meeting has been sent to teams without specific details. The package is the result of 12 months of talks after Liberty first presented its hopes for F1’s future last April.

The meeting will discuss:

Cap on teams’ annual budgets, starting in either 2020 or 2021 at a figure above $200m (£151m) a year and reducing to below $150m (£114m) within three or four years
Revised revenue distribution in an attempt to narrow the gap in income between the top teams and the rest
Revised governance to end the current system where only six of the 10 teams have a formal say on rules
An outline of technical rules that will be aimed at making the cars able to race more closely
Revised engine rules, keeping the current 1.6-litre V6 turbo hybrids but with changes to make them louder
A change to the rules governing how many parts teams can buy from rivals while still meeting the requirement of being a constructor in their own right
Liberty’s aim is to stop F1 being a two-tier sport, where three teams have a huge performance advantage over the rest to the point that no team other than Mercedes, Ferrari and Red Bull can hope to win a race.

The budget cap is the key part of this plan, and has been the centrepiece of talks over the last year. F1 managing director Ross Brawn says these discussions have been intense and difficult and are unlikely to end when the 2021 rules are published.

“The revenue is a tough discussion, we know that,” Brawn said. “The ones that have got it all want to keep it and the ones that haven’t got it want more, and it’s finding the fair balance in how we can distribute the revenue, because we know if we have a more equitable distribution of revenue we will have a better F1, and that’s a fact. We’ll never be in a situation on the cost cap, for example, where we will issue definitive regulations at a particular date and that’s the end of it. The topic is too complex. So as it evolves and as we see new challenges and problems, we will have to evolve and refine the regulations to achieve the objectives and that is no different with the technical and sporting regulations. And in those two areas there are well-established routines and protocol and even then there are arguments. So it would be naive to think the financial regulations are just going to be put on the table and that’s it, leave it. Each team has a different set of priorities and we are trying to find our way through it to get the best solution but I can see some genuine progress.”

A number of areas are likely to be deemed outside limits on spending – including driver salaries, remuneration for top executives and many aspects of marketing. And one of the key issues will be how limitations on spending will be policed, especially in the context of the large companies involved in F1. Many are concerned about whether the FIA will properly be able to police teams such as Mercedes and Ferrari, whose F1 operations are part of much larger organisations where work could potentially be hidden.

The trend for smaller teams to buddy up with larger ones is also a major area of contention. Renault, McLaren and Williams have serious concerns about Haas, for example, who buy as many parts as they can from Ferrari, leaving only the aerodynamic surfaces and chassis for them to design themselves.