Liberty unveils new vision for F1, but will teams buy in?
Liberty Media, the owner of Formula 1 motor racing, is to proceed with plans for a revamp of the sport in 2021, with a focus on making it more competitive and cost-efficient, even though there has been resistance from some of the leading teams.
As expected, Liberty today presented proposals to the 10 teams and the FIA, motor racing’s international governing body, in a meeting ahead of the Bahrain Grand Prix.
The US company has been tinkering with Formula 1 since completing its $4.4-billion takeover at the start of last year, and is pressing for more far-reaching reforms when the Concorde Agreement, the pact which binds the teams to the sport, expires in 2020.
The key initiatives include a budget cap estimated to be around $150 million, with cheaper engines, a “more balanced” revenue distribution system, technical changes to address the lack of overtaking, a common criticism of the racing, and a new governance structure between the teams, the FIA and Formula 1.
However, front-runners Mercedes, the defending world champions, and Ferrari have been among the leading sceptics of Liberty’s plans, first outlined in a blueprint last November, as they are investing heavily in new engines, and there has been talk of a potential breakaway series if a new accord is not reached.
The two teams have yet to comment on the proposals presented today,
In a statement, Chase Carey (pictured), the chairman and chief executive of Formula 1, said: “Formula 1 is a sport with a rich history. We want to preserve, protect and enhance that history by unleashing F1’s potential, by putting our fans at the heart of a more competitive and more exciting sport.
“We are driven by one desire: to create the world’s leading sporting brand. Fan-centred, commercially successful, profitable for our teams, and with technological innovation at its heart.”
Sergio Marchionne, the chairman of Ferrari, warned recently that it could quit Formula 1 if Liberty introduces simpler engine designs and a performance-based redistribution of prize money after the 2020 season and last month Toto Wolff, the executive director of Mercedes, claimed that a breakaway series was a “realistic” possibility if Formula 1 did not satisfy its Italian rival, which has been involved in the series since the launch of the world championship in 1950.
Mercedes' British driver Lewis Hamilton, who won his fourth world title last year, said on Thursday that he would be waiting to see what Liberty's plans are for Formula 1 before signing an extension to his contract with the German team, which is due to expire at the end of the 2018 season.
At present, half of the prize money is split between the 10 teams based on performance, while the other share is split evenly and goes to teams which have finished in the top 10 in two of the past three seasons.
An additional 7.5 per cent is given to Ferrari, McLaren and Red Bull Racing, as those teams won the most races in the four seasons up to 2012, when Formula 1’s bonus payments agreement was put in place.
Ferrari is also entitled to an extra 5 per cent of the series’ profits as Formula 1’s longest-running team, and would be expected to suffer most if any revenue change was to be implemented, and could also face losing its veto in the sport.
However, the smaller teams are likely to back the reforms, with Bob Fernley, deputy team principal of Force India, telling BBC Sport: “It is a constructive programme. Liberty are going around getting the individual teams' opinions and putting it together collectively into what they believe is the best way forward for F1 for the future, whereas in the past it was a very divisive process.
"I can see the direction they are going in and from an independent team's point of view, it's very encouraging. At least four teams - Mercedes, Ferrari, Red Bull and McLaren - will have to make some adjustments. But they are keeping everybody on board with that process."
The Liberty proposals are as follows:
Power units (PU)
• The PU must be cheaper, simpler, louder, have more power and reduce the necessity of grid penalties.
• It must remain road relevant, hybrid and allow manufacturers to build unique and original PU.
• New PU rules must be attractive for new entrants and Customer teams must have access to equivalent performance.
• We believe how you spend the money must be more decisive and important than how much money you spend.
• While there will be some standardised elements, car differentiation must remain a core value
• Implement a cost cap that maintains Formula 1's position as the pinnacle of motorsport with a state-of-the-art technology.
• The new revenue distribution criteria must be more balanced, based on meritocracy of the current performance and reward success for the teams and the Commercial Rights Holder.
• F1's unique, historical franchise and value must and will still be recognised.
• Revenue support to both cars and engine suppliers.
Sporting and technical rules & regulations
• We must make cars more raceable to increase overtaking opportunities.
• Engineering technology must remain a cornerstone but driver’s skill must be the predominant factor in the performance of the car.
• The cars must and will remain different from each other and maintain performance differentiators like aerodynamics, suspensions and PU performance. However, we believe areas not relevant to fans need to be standardised.
• A simple and streamline structure between the teams, the FIA and Formula 1.
Formula One Group posted an operating loss of $40 million for 2017, while revenues fell by $12 million, or 1 per cent, to $1.78 billion, albeit turnover from the major sources of broadcasting and advertising and sponsorship climbed, and the number of grands prix goes back up to 21 in 2018, after dropping to 20 last year.
Viewership of races increased by more than 6 per cent across the sport's major markets in 2017, and, under Liberty, Formula 1 is stepping up its digital presence with a new over-the-top service showing live races, although the launch has been delayed until later this season.
Meanwhile, the second season of the Formula 1 Esports Series is set to get under way with all the teams except Ferrari represented.
Nine Formula 1 outfits will be offering positions in their eSports driver line-ups as part of the series, which made its debut, without their direct involvement, in 2017.
The series will again be organised by Formula 1 in partnership with Codemasters, the developer of the F1 2017 video game, and Gfinity, the eSports promoter, while DHL, the international logistics company, has come on board as an official sponsor as part of its extended deal with the sport.
The 2018 season will be split into two, with the first half involving online racers competing to join the official Formula 1 teams, and the second half comprising three live events that will determine the teams’ and drivers’ world champions with prize money of at least $200,000.
The first qualifying challenge for the F1 Esports Series will take place on 13 April.
Julian Tan, head of digital growth & F1 Esports at Formula 1 said: "It has always been our goal to get the teams involved as soon as possible and we are delighted that they have recognised the potential of the F1 Esports Series at such an early stage. Last year's series was a great success and demonstrated that there is a clear audience and interest in this innovative, exciting form of racing. We will continue to invest in the Esports Series as we feel it is a great way for us to interact and engage with a new audience."