Cost Caps in Formula 1: Could Limitations be the key to Freedom?

Earlier in the month the Formula One Strategy Group met and agreed on a series of provisions to be introduced to the sport over the coming seasons. However, a notable absence from these discussions was the addressing of the costs of F1. Without wishing to sound like a broken record, the sport’s spending and cost to participate is far from financially viable for the smaller teams. So although talks to cut costs were overlooked, there still remains discussion from the smaller constructors that do not make up the Strategy Group as to how the sport can be sustainable for the smaller constructors. One such solution could be to introduce cost caps for part of the field.

The basic principle behind this would only affect the smaller constructors such as Sauber, Manor, Lotus and Force India. The idea is that the teams constrained by smaller budgets could voluntarily opt to operate under a cost cap to limit their spending. This obviously would lead to an even greater division in performance between the Mercedes, Ferraris and Red Bulls. So to resolve this, the suggestion is that the teams limited in cost would be granted greater technical freedom.

This would ensure the survival of the smaller teams. They could limit their spending to a manageable level, and the nature of a 'cap' would allow the teams to calculate a 'worse case scenario' each season and if this is financially survivable then the team may live on. What’s more, if signing up to a limited budget would grant the team greater scope for technical freedom it would avoid the issue of the customer teams being left behind by the works constructors whose budget dwarfs those in the lower half of the field. They could revert back to pioneering designs of past cars or invest in new advances. This would act as damage limitation to the reduced spending and stop the field from separating into the two categories of  the 'cost capped' and 'not'. 

Recently, attention has been directed to the constricted regulations when designing a car for the forthcoming season. Designers are becoming increasingly apathetic as they are not able to work to their full potential. The stringent regulations confine ground breaking design such as double diffusers or active suspension for example. It’s no wonder technical supremo Adrian Newey has sought pastures new by working with Sir Ben Ainslie for the America’s Cup. So to allow new designs to flourish and give the small teams a chance of competing at the front of the field with a restricted budget seems intriguing. The idea of implementing cost caps as suggested would seem to navigate the problems of both cost and growing frustration around the confinement of car design.

Technical Supremo Adrian Newey
© Octane Photographic Ltd.

It is all just an idea out of many to solve the sport’s financial troubles and to stop the grid from falling below 20 cars. But unlike a proposed ‘Junior Championship’ it encourages and diverts attention toward a technology race. As the highest tier in motorsport, F1 is synonymous with ground breaking design which has filtered down to road cars over time. But this element seems to have been gradually eradicated by the ever tighter rules of the FIA. As such the proposal would reintroduce this element back into the sport.

The most technically advanced F1 car, the FW14B

Although at first this may seems illogical, a cost cap could make the smaller teams more competitive. If you look at the current gap between the Ferrari and Sauber for example, Sauber do not have the means to spend and close the performance gap. But a wider scope to exploit design loopholes that are closed to the teams who would not be able to opt for a cost cap may see the performance of the slower car increase and close the gap. This would in theory lead to a closer and more competitive field. And who doesn’t want that? The Premier League is often heralded as the greatest division in world football because it is so competitive throughout, unlike the Spanish League. If this could be replicated in Formula 1 the added spectacle would be excellent. It would draw back TV audiences and also allow the smaller teams to gain more sponsorship. Hypothetically, if a cost capped team could use the proposed regulations to their advantage to design a competitive car, combined with a tighter field would ensure they feature on more TV coverage. This attracts more sponsors, and higher paying sponsorship deals will ultimately further solve the financial issues of the smaller constructors.

The exact way in which cost caps for design freedom would be implemented is still unknown and may never be if the proposal does not take off. But it makes for an interesting prospect as it certainly does feature a resolution to the financial fears for those competing lower down the running order. But beyond this, cost caps in exchange for freedom would offer another variable to the sport. Variables result in uncertainty, the key to excitement.