F1: 2021 Budget Disputes Threaten to Sink the Sport


McLaren CEO Zak Brown has argued that fellow competitors Scuderia Ferrari are “living in denial” for not readily complying to plans to introduce a reduced universal annual budget cap for all F1 constructors teams in the 2021/22 season and beyond.  

Team Principle of The Italian Prancing horses, Mattia Binotto, has not explicitly stated that he and Ferrari would quit the sport over the issue or agree to a reduced a universal annual cap of £150 million for all F1 constructors’ teams. He is however on record as saying that the motorsport should not “react in a hurry” to the coronavirus crisis.

A knee-jerk response could result in the sport being “dumbed-down”, with Ferrari being forced to lay off more of its lower-paid backroom staff, due to the complicated Italian employment laws that the Italian-based team are subject to. This response from the principle of the motorsport’s oldest team has provoked controversy from his colleagues on the grid, including McLaren CEO Brown, who stated that any pay-reduction delay would be “a very poor leadership strategy”. 

The 48 year-old Californian went further, stating that if teams up and down the grid did not acknowledge “reality” and “F1 goes by its old habits, we are all at extreme risk”. Mr Brown believes the only way the sport can guarantee itself a long-term healthy future is by reducing the universal annual budget-cap for all constructors ahead of the 2020/21 season, from the $175m budget agreed last October, down to $100 million. He believes this prospective monetary reduction for all teams of up to $75 million will allow Formula One to remain the technological pinnacle of motorsport, considering the vast budget they would still have at their disposal.

Looking at these wildly varying viewpoints from Ferrari and McLaren in isolation, it’s clear to see why both teams are adopting their respective stances. Ferrari are one of the oldest and most successful Formula One teams to date. Since joining the sport they have won 237 races, 16 constructors’ championships, and seen 765 podium finishes. They have dominated the sport for a majority of Formula One’s lifespan, and are in no hurry to potentially end this via the introduction of standardised budgets and racing. Additionally, they have consistently had the highest annual racing budget for a vast majority of this time, a factor that has contributed to their long-term success and given them a historical advantage.

The 2019 budgets was no exception to this rule, with Ferrari having the second highest annual budget of $435 million, $285 million more than the poorest teams on the grid in 2019, Williams and Haas F1. This prospective budget reduction means that worse case scenario, Ferrari would have to reduce their annual budgetary spending by $185 million in less than a year. This will prove a difficult task to manage whilst simutaneously trying to make a competitive car for next season.

McLaren on the other hand are a constructors’ team who have been extremely successful in the past, finishing 4th in the 2019 Constructors’ World Championship, 272 points behind 3rd placed Red Bull Racing. Whilst McLaren have been in a healthy financial position – the fourth richest constructor with an annual budget of $250 million in 2019 – Zak Brown has claimed that he wants to bring the glory days of the 1980s back and make the team championship contenders again. This will be undoubedtly be a tough task to execute in the current financial landscape of F1; the gulf between McLaren and ‘The Big Three’ of Red Bull, Ferrari and Mercedes-Benz is huge, within the region of nearly $100m.

The financial predicament created by the cancellation of the first nine races in the F1 calendar has and will continue to have a profound effect on the poorest teams lower down the grid. While the sport’s owners Liberty Media have announced a host of economic contingency measures, including a $1.4 billion relief package to the F1 group, there are fears that this substantial amount of support will not save all ten constructors. Jean Todt, President of the governing body of Formula One remarked in an interview with the Auto Sport magazine podcast on April 9 that Formula One could lose a total of four constructors teams this season if it is completely voided. These words have been echoed by the Team Principle of ROKiT Williams Racing, Claire Williams, who posited that it is “absolutely critical” for the team that some form of racing resumes this season. Williams continued:

“We [Williams] are one of the true independents left, we don’t have the backing that the majority of our competitors have up and down the grid”. She added that the Covid-19 pandemic has demonstrated that “the model within which we operate has been exposed as unsustainable when something like this happens”.

While no official decision has been made as to how the sport will return this season or next, proposals from Team Principles, drivers and F1 officials have ranged from a full restart in July, a 20-race calendar, and a two-day race weekend every weekend. Proposals like these, alongside the possibility of Silverstone going ahead behind closed doors on July 19, will provide teams such as Williams, Haas, Toro Rosso, Alfa Romeo and Racing Point with hope that Formula One cannot only survive this crisis, but also thrive from it.

Fans of all loyalties will be hoping that regardless of the motivations and potential consequences for their respective teams, all ten constructors will make the necessary sacrifices ensure the sport survives. While an economic rescue package and advances on teams’ prize money payments may help sustain Formula One’s ageing, only the proverbial ‘drivers’ of the sport can ensure that F1 only has to come in for an unscheduled pit stop, and doesn’t have to ‘retire’ itself from the race in which it has ceaselessly been parttaking for 70 consecutive years.


3rd Year History Student. Politics, International current affairs and all-round sports enthusiast. Long suffering Aston Villa and Haas F1 Fan.

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