The Covid-19 pandemic showed Formula 1’s budget cap should have been agreed years earlier, says Haas team principal Guenther Steiner.
He said a lesson from the financial shock caused by the pandemic is that teams need greater margin within Formula 1’s economic model.“What I hope to take out of this pandemic this year is we need to have a little bit of a margin, a safety net,” he said. “We didn’t have anything. We just ran into it.”
He praised F1’s response, which has included lowering the new-for-2021 budget cap from $175 million to $145 million and introducing other rules changes intended to cut costs.
“The good thing is nobody panicked,” said Steiner. “I think how it is done now at least everybody’s thinking about how to do things right.”
“I think how they reacted, it’s not in panic. It’s like ‘OK, this is not sustainable now because we learned as soon as anything happens there is not enough reserve fuel in the tank’.
“So it’s always too late, for sure the budget cap should have been done a few years before, and it was suggested. But I hope we can get out of this that we are not ending up in this position again and that we learn out of this and [have] a little bit of reserve fuel in the tank.
“Because it can happen any days. It can happen again. So I hope we learn out of it and going forward we are not in this position any more”
Has the pandemic put two of Formula 1’s most historic teams in jeopardy? Read Dieter Rencken’s analysis in today’s RacingLines column on RaceFans
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2020 F1 season
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BasCB (@bascb)
24th June 2020, 7:45
Why is it that Steiner seems to say really sensible things so often?
S
24th June 2020, 8:03
Probably because he is a racer first and a businessman second.
His views are often better for his entire industry than they are for just his team. A very rare quality in the F1 paddock.
It’d be great if there were more people like him in F1.
Stubeck
24th June 2020, 8:28
Well yeah, people have been calling for this for years, and the teams said they could govern themselves. We now know that was inaccurate
SadF1fan
24th June 2020, 9:05
In a financially healthy Formula 1 a budget cap is like DRS, completely unnecessary.
But since the FIA and the teams thought it was a good idea to privatise F1 (sell it to Bernie and Liberty for perpetuity) it’s been going from one low to another.
But hey, it will be a semi-spec series soon, and most designer freedom has been eliminated, its getting better….
Yaru (@yaru)
25th June 2020, 19:27
DRS is necessary because of all the dirty air that comes out of the back gives huge disadvantages to the chaser car and from a long way out too.
If you can even get close to the leading car the way the current aeros disascarages chasers, quite you deserve the lead.
You could just also toss all the aero out but fans would decry that even more than having DRS. 2022 is an attempt to balance aero and cleaner air to allow for closer racing (with DRS being a just in case it doesn’t work).
@HoHum (@hohum)
24th June 2020, 13:38
The “Cap” should have been on FOM’s share of revenue.
Jimmi Cynic (@jimmi-cynic)
24th June 2020, 20:05
Zing! @hohum
Agree. It was Bernie and the Hedge Fund Jets that sucked the profit out of F1. With the blessings of all the teams, however, back when it seemed the smoke money would never end. And then it did.
@HoHum (@hohum)
24th June 2020, 22:28
@jimmi-cynic, It wasn’t with “the blessing” of all the teams, they expected they would be able to renegotiate the terms of their agreement with Bernie once the initial contract term ended, little did they realise that Bernie wasn’t working for them but they were working for Bernie, and any attempt to start an alternative series would leave them in a worse situation than they are now in, ie; a year without income while they reorganised.
Jimmi Cynic (@jimmi-cynic)
24th June 2020, 23:39
@hohum: I was referencing Bernie’s first FOM deal with the teams after winning the FISA/FOCA war. Only Ken Tyrell complained. Bernie only took 23% off the top. That wasn’t so bad. Besides, the big revenue stream for the teams was big buckets of big tobacco money.
But then, as you say, Bernie wasn’t content with a measly 23%, and then the smoke cleared… ;-)
@HoHum (@hohum)
24th June 2020, 23:55
@jimmi-cynic, Thanks, for as long as I can remember I thought Bernie started with 50% off the top, but guaranteed no team would earn less than they had prior to joining, which sounded sort of reasonable as there was some risk and few people realised that live TV would go global and lead to a huge demand for product. Ken Tyrell should have been listened to.