Formula 1 CEO Chase Carey believes the top three teams feel it is necessary to match their rivals’ spending if they want to be competitive rather than doing so through desire.
Since becoming the new majority shareholders in the sport earlier this year, the topic of costs and spending has been high on the agenda, with the Formula One Group wanting to create a more level playing field across the F1 grid.
Speaking about the current gulf in budgets between the likes of Ferrari, Mercedes at the front and Sauber, Force India lower down, Carey claimed: “What some of the teams spend on the sport today is an incredible amount and they’ll acknowledge it’s an incredible amount. To some degree they’re saying, ‘We need to be protected from ourselves.’
“There are a handful teams that spend an extraordinary amount that aren’t really spending to create something that enhances the consumer experience.
“What they’re doing is spending because two other guys are spending it, so they’ve got to do it to compete with the other guys.
“And we want this to be healthier for all the teams, we’d like to be a healthy business for them.”
2021 is being targeted as the year Liberty Media can fully implement the style of F1 they want, as the current Concorde Agreement signed with Bernie Ecclestone expires in 2020.
What that does do, however, is give Carey and his new team time to decide where costs can be cut, with talks on a new engine formula recently getting underway.
“We came out of a meeting a few weeks ago on the engines to sort of say, we think we’d like the engine to be simpler, cheaper, louder,” Carey claimed.
“This last generation became more expensive and complex, which is what enabled for a period Mercedes to build a better engine than everybody else.
“We want technology and engineering to be part of the sport, but it shouldn’t be a defining part of the sport. You should get an edge, but first and foremost we still want the drivers to be the stars.”
Also a key part of the puzzle is the distribution of revenue between the teams, with historical payments and other clauses giving the top teams a major advantage. However, Carey hinted the type of decisive action many want to solve the inequality in this area would only be part of a broader financial focus.
“Costs and revenues are all inter-related. You have to deal with it in pieces, but you want to start with a focus on the whole,” he explained.
“So it’s costs, revenue, rules, engines, which is why our real focus is that we want to make for everybody the business of owning a team a much better business proposition for everybody.
“There are certainly benefits for some of the teams in marketing, branding and other benefits that come out of it, but we think it’s good for everybody, including us, to make the economics of owning a team much healthier.
“We’re addressing that more holistically at this point.”
