Prior to the pre-season testing in Bahrain the F1 commission will meet for the first time in 2023. A number of thorny issues will be thrashed out between the teams, the FIA and F1.
At the final meeting in 2022 the commission approved changes to the DRS procedure to encourage closer racing by bringing forward the activation by one lap at a safety car restart and the start of the race.
F1 Engine grid drop penalty system to be revised
One outstanding topic to be picked up will be the thorny issue of engine penalties. In 2021 Mercedes set a precedent to ‘game the system when they fitted Hamilton’s car with a new PU in Brazil while openly admitting it was for performance reasons.
Last season teams followed suit en masse at circuits where overtaking is considered easier. This led to the stewards spending hours ensuring the grid penalties were applied properly and final starting positions which resembled nothing like the qualifying session.
The FIA have proposed making the engine penalties more stringent to deter the teams from making performance related power unit changes.
New F1 competitors up for discussion
The new system proposed will attempt to discourage the change of change of more elements than needed once a driver has accumulated more than a certain level of penalty. This ultimately causes higher parts costs and undermines the PU element annual restrictions.
Another issue up for discussion is one that has grabbed the F1 headlines all winter has been the inclusion of new competitors in Formula One.
The most recent Concorde Agreement made in 2020 which defines the the terms agreed between Formula One Management, the FIA and the current 10 teams, states that any new F1 entrant must pay an anti dilution fee of $200 million.
New FIA process for F1 entry needs ratifying
This is then distributed amongst the current teams as compensation for any reduction prize money due to the expansion of the grid.
The FIA opened a process this month by which any new F1 competitors can apply to join F1 and their application be evaluated. To be agreed at the commission is the criteria the applicants must fulfil and at the McLaren launch Zak Brown revealed increasing the joining fee is on the agenda.
“I’ve not really spoken with other teams about it [but] it will be a topic at this upcoming FIA commission meeting,” Brown confirmed to assembled media.
“We’ve been sent the agenda and new teams is a topic.”
F1 Teams failed to consider original fee properly
The entry fee was introduced into the eight Concorde Agreement which covers the period 2021-2025 and replaced the previous provision that any new F1 team had to wait to season two before sharing in the prize money.
In the autumn of 2020 when the agreement was being finalised, there was no realistic proposition of a new team any time soon and it appears the teams failed to consider the details properly.
Now that Andretti and others are knocking on the door and as F1 goes from strength to strength the majority of the teams feel the entry price is too low.
“I think it’s ultimately up to F1 and the FIA to decide what’s an appropriate fee,” said Brown. “When we came up with the fee almost five years ago now, F1 was a totally different place. So I think they need to land on what they feel is appropriate.”
F1 entry fee to treble to $600m
Given the timescale Brown suggests, It appears the fee was discussed long before the new Concorde agreement was signed.
The BBC revealed last month that a number of the current F1 teams have been discussing a revised entry fee of between $600-700m. This is based upon a recent precedent set as new team Seattle were charged $650m to join the US professional Ice hockey league.
As TJ13 revealed this week, Red Bull Racing are now close to being self sufficient based on the income from their sponsors alone. Further just 5 years ago Sauber had just 10 partners, that list now exceeds 40 such is the growth in F1’s popularity.
The terms are clearly now much less reliant on prize money than prior to Liberty Media’s purchase of the commercial rights in 2017.
Brown: “Its value for money”
Zak Brown believes such a fee is justifiable, “And it’s good value for money, right?”
“I mean, these franchises are worth quite a bit of money. So it’s an investment as opposed to a fee because these franchises, if not already worth billions, certainly will be in the not-too-distant future like other major sports.”
In the US, each of the NFL teams is valued at present in excess of $1bn with the Dallas Cowboys topping the list at $7.4bn. So if the marketing exposure is comparable to an NHL outfit, Brown’s argument appears sound.
Over the past year, the Andretti organisation has been most vocal about its desire to join Formula One, though this has not been received well amongst most of the current teams.
Brown: Supportive of Andretti F1 application
Zak Brown and McLaren however, have been supportive of the American team joining the sport “as long as they’re additive to the sport”.
“I’ve always been focused on how can we make the pie bigger, less focused on how can I get a bigger piece of a pie that’s not growing,” he explained,” Brown explained.
“And so as long as a new team is is additive, helps us get better TV deals, brings awareness that drives more sponsorship, pays an appropriate franchise entry fee that’s in line with what the value of what F1 is today, then we’re very supportive of of having up to a 12-team grid.
“Ultimately it’s up to F1 and the FIA to decide what they think those values are. But if all those boxes are ticked, then we’re very happy to welcome additional competition and growth of F1.”
Audi paying $600m to buy Sauber F1 team
The Concorde agreement in fact allows for 13 teams and a maximum of 24 races.
Interestingly its believed that Audi will ultimately pay $600m to acquire the Swiss based Sauber though of course this includes an existing infrastructure, data and knowledge that a completely new team does not get.
If the F1 commission agrees a new entry fee next week it will come as somewhat of a shock for Andretti and others as this may well be treble the amount set out in the Concorde agreement of 2020.