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Christian Horner’s comments to the BBC about delaying the new Formula 1 regulations even further – by another year to 2023 – carry a very strong economic logic.
Because the teams receive their share of F1’s income one year in arrears, their financial pain from the cancelled 2020 races will be felt most keenly next year.
Yet as things stand – with the radical new technical regulations postponed from 2021 by just one year – teams will have to be investing heavily in the new formula cars at just the time their income will be most squeezed.
There could never have been a good time for the coronavirus emergency to hit the world, but its timing has been particularly disastrous for F1 by intersecting with the plan for the new formula.
Combined with F1’s team payment system – which essentially means Liberty will be taking the pain this year, committed to paying teams based on last year’s full season but with vastly reduced income, but the teams will be feeling it next year – the COVID-19 crisis has essentially already impacted across three seasons.
The postponement of the new cars from 2021 to ’22 has at least ensured the new cars are developed while all the teams are subject to the spending cap of $175million.
But spending is only half of the balance sheet. The other is income. The smaller teams – many of which would not be reaching the spending limit anyway – aren’t really helped significantly by the spending cap if their income is vastly reduced.
Together with the development freeze just announced by the FIA, a further year beyond ’21 with the existing cars would ease that financial pressure considerably.
At the moment, this idea is just an open-ended discussion between the teams, but there does seem to be a general open-minded response to it from all of them.
Although the big teams could probably weather the financial storm, there is an understanding that the teams all need each other, that the smaller teams need to be protected as far as possible.
Assuming the specifics can be hammered out between the teams, the idea could then be presented to the FIA.
Under the new ‘emergency powers’ of the governing body announced on Tuesday, such a proposal – if made – could be approved directly by FIA president Jean Todt, without it having to go through the usual channels.
As such, although it’s only an idea at the moment, there seems little reason to believe it won’t happen.
