F1 engine politics is destroying the sport

There is much talk going on at the moment in F1 circles about engine regulations for the future, with a suggestion that there might be a compromise with different engines being used by different teams in 2017. This would mean a revival of the old pre-2014 normally-aspirated V8 engines, with their KERS systems, for the smaller teams, while the bigger teams would go on using the newer and more interesting V6 hybrid turbos. Getting such a change through the decision-making process would not be easy because the engine manufacturers are not going to agree to anything that would lead to them being beaten by older engines, but there is no doubt that this could be a way to provide the struggling small teams with cheaper engines. (AR1.com addresses the real problem with F1 in this article)

In reality, it is also probably a way to try to get the manufacturers to agree to cut their engine prices to allow the small teams to use the existing engines, but at a much more affordable price. There is no doubt that the manufacturers can afford to do that if they want to, but obviously they are keen to make their F1 activities as cost-effective as possible and having customers to offset the expenditure is therefore a good idea for them. Logically, they should be arguing for the small teams to get more money from the Commercial Rights Holder, although no doubt he will be saying that that is fine, as long as the big teams provide the cash from their shares.

All of this remains something of a sideshow because the major conversation is actually about the way in which revenues will be divided up after the current deals end in 2020. A new Concorde Agreement, or its equivalent will be needed but it is clear that the manufacturers are keen for CVC Capital Partners to reduce the amount of money that they take from the sport. Having said that Bernie Ecclestone will still be working to divide and conquer the teams, as he has always done, and will no doubt be offering better deals to the big players. The only problem is that CVC may not be willing to reduce its shares of the take, in which case, it will need to sell the business, although that will be at a price that is far less than they want.

Having said all that of that, the costs of the new engines will be reducing in the years ahead as the research and development will slow as gains become more difficult to find and the level of competitiveness between the teams closes up again. This is a normal cycle in any new formula.

It would not be the first time that F1 has split its engine regulations to help smaller teams. In 1987 the big teams were running wildly-expensive turbos and the small teams were struggling with normally aspirated engines. In order to help them the FIA introduced two sub-championships: the Jim Clark Trophy for drivers of cars with normally-aspirated engines and the Colin Chapman Trophy for teams without turbo engines. Turbos were going to be banned in 1989 and with restrictions on them increasing in 1988, the sub-championships disappeared.

Such arguments are going to go on happening until the sport finds a long-term solution to its financing and that can only happen when the commercial rights holders agree to accept less, the big teams agree to reduce the amount they take and there is a solid structure in place with regard to the rewards. Debts will need to be looked after as well as CVC has taken a huge amount out of the sport, but if the commercial rights holder was to spend more time generating revenues from other sources and less quibbling with the teams, the sport might be able to move forward with everyone working together and everyone taking a fair share. That would be the sensible solution, but perhaps it is not achievable until a new generation arrives. Joe Saward

Leave a Reply