Formula 1 has its engines turned off this month, but the system is in full swing, thinking not only about the present, but also about the future. Discussions are underway to define the new Concordat Agreement which will regulate the Circus with its introduction in the new 2026 regulation, given that the current one will expire next year.
One of the topics on the table is the budget cap: rumors had spread about a possible easing of cost controls which, instead, made F1 sustainable even for the smaller teams. Let’s not forget that just a few years ago there was a risk that some teams would blow up.
With Liberty Media’s policy the music has changed: the American promoter, also thanks to the work of Stefano Domenicali, president and CEO of F1, has managed to bring GPs back to the top of world sport with more widespread visibility to a new generation of fan cultivated with the Netflix series, “Drive to Survive”, and a massive work on social networks.
At the same time, the paddock has once again become coveted by VIPs and the ten-year agreement that F1 has signed with LVMH, the French luxury multinational, says a lot about the relocation of the GPs in an area that combines record attendance in the grandstands of each circuit, to the exclusivity of the event for those who have the privilege of experiencing the Paddock Club.
In a context where all indicators are growing, there is a need for the future challenge to be fought on equal terms. The financial regulation, the third element of a regulatory framework that had always been only technical and sporting, contributed to a leveling of the performance of the single-seaters (four different teams won races this year: Red Bull, Ferrari, McLaren and Mercedes), but precisely the stringent constraints of the cost cap can generate important disparities in the management of a team.
Valtteri Bottas, Team Stake F1 KICK Sauber C44
Photo by: Lionel Ng / Motorsport Images
The cost of labor, for example, is an aspect that can have a major impact on the organization of a team. In Switzerland where Sauber (which is transforming into Audi) is based, while in Italy there is Ferrari, two companies that suffer personnel costs that exceed the costs recorded in Great Britain by 20 – 30%, where the other teams are based, with the exception of Haas and Racing Bulls.
Haas has its headquarters in the United States in Kannapolis (North Carolina), and three operational headquarters (two in Italy: in Maranello at Ferrari and in Varano de’ Melegari at Dallara and one in England in Banbury), while Racing Bulls is divided between Faenza and Milton Keynes and Alpine unites Enstone with the Renault motoring center of Viry Chatillon, but the Parisian headquarters will be abandoned by the F1 team to prefer a customer Mercedes engine.
Nico Hulkenberg, Haas VF-24
Photo by: Alastair Staley / Motorsport Images
It is clear that taking the numbers we have cited at face value, a great disparity emerges: Ferrari, Sauber and to a lesser extent Racing Bulls and Haas, despite having the same spending capacity, are forced to hire decidedly fewer staff than the English teams . To fill the positions necessary for a modern F1 team (we are talking about a thousand employees for the top teams) there are those who expand the ranks with lower salaries, so even moving on the market can become more complicated.
The proposal, therefore, would be to expand spending capacity based on a parameter which is not only that of inflation (every year there is already an adjustment in purchasing power), but also taking into account the cost of labour.
It would be a choice of fairness that would rebalance values, together with the idea of getting out of the ambiguity of sharing the costs of an employee who would theoretically be used partly by the team and partly in other F1 Activities (the boats for America’s Cup, rather than the study of Hypercars or supercar road cars. Thanks to a consistent annual increase in spending capacity, all figures would be included in the F1 team, avoiding possible tricks.
The suggestions that emerged are very rational: it will be interesting to find out if it will really be possible to achieve a true equalization of spending…
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