For F1, the implications of Russia’s war go beyond one race and one team

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The economic pressure around the globe generated by Russia’s war in Ukraine is unlikely to spare F1. While Haas were first to feel its implications, the sport’s top teams are likely to be next.

Of course this pales into comparison with the far graver consequences of war for those involved in it. Next to the loss of lives in Ukraine, the matter of whether cars go around a track amounts to nothing.

But the reality is that the political world shapes the sporting one. We have seen obvious examples of this already as a result of the war, more are expected and given the volatility of the situation, who can say with certainty what is to follow?

Clearly when F1 designed the budget cap in 2019, ahead of its introduction last year, no one foresaw the circumstances the western world has found itself in and the financial implications. First came two years of businesses attempting to keep their heads above water during the Covid-19 pandemic. Then three weeks ago Russian president Vladimir Putin launched a full-scale attack on Ukraine, with devastating consequences for the country.

The budget cap was originally set at $175 million for its introduction last year. Following the Covid-19 outbreak that was reduced to $145m, with a glide path down to $140m this year and $135 million by 2023.

Report: F3 driver Smolyar joins other Russian drivers leaving FIA series
There are some exceptions including top staff salaries (including drivers), marketing and engine development on the engine. Nonetheless questions have been raised as to whether the limit should be raised if affected by global factors.

The cap has been described as a “lifeline” for some teams on the grid. But by its nature it has required significant cuts at F1’s three biggest teams, Mercedes, Ferrari and Red Bull.

All teams will experience the impact the war is having on costs, particularly in terms of logistics. Freight times to some countries are likely to increase, flight costs are also rising with global oil prices.

In the UK, where most F1 teams are based, inflation has shot up due to rising energy prices. There will be a direct hit across all sectors in a scale which was not foreseen, something team principal have already started to warn about.

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“We’re already seeing extremely high inflation,” said Red Bull’s Christian Horner. “You have to remember when the budget was set back in the midst of the pandemic in the middle of 2020, nobody could have foreseen the circumstance that we have in the world today.

F1 teams will feel the pinch of rising inflation, said Horner
“And of course, what we see going on in the world is only going to drive prices going up and inflation looks like it could hit record amounts. We’re seeing that impact already on things like air freight just to this event.

“It’s a very serious problem that we have to look at and address because this has a one-to-one impact on people’s jobs and livelihoods.”

Horner has urged the FIA to take action. “I think it’s the duty of the regulators to look at this,” he said. “There’s a degree of urgency to make sure that the relief has put in place to take into account what’s going on in the world with the cost of living increases that we’re all going to see.”

The direct consequences of the war have already begun to play out. Haas were quick to drop Russian title sponsor Uralkali and the associated colour scheme the ran last year. They also showed the door to Russian driver Nikita Mazepin, who along with his father Dmitry is now subject to sanctions in the UK. Ferrari has also removed the logos of Russian sponsor Kaspersky for its cars and facilities.

F1 has not only cancelled this year’s Russian Grand Prix but torn up the long-term contract of one of its more lucrative races. That will have cost implications as the sport’s bosses scramble to find a replacement.

That may not be the end of the conflict’s impact upon the calendar. Two days before beginning his invasion, Putin reached an agreement with his Azerbaijani counterpart, Ilham Aliyev, on “Declaration on Allied Interaction” between the two countries. “This brings our relations to the level of an alliance,” said Aliyev.

The United States, European Union, United Kingdom and other nations are trying to push Putin to back down with severe economic sanctions. If Azerbaijan allows itself to be drawn into the conflict, it would risk becoming a target for the same, with consequences for Baku’s race in less than three months’ time.

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But the war’s impact will also be felt in human terms. Mercedes team principal Toto Wolff said F1 must remember the “bigger picture” beyond the cost implications as their effect is felt over the coming months.

Drivers showed their support for Ukraine last week
“We all are witnesses of what’s happening in the world and we strongly disagree,” Wolff began. “You realise that what we do in our little microcosm has no relevance in the big picture if families have to flee their home country and civilian casualties happen.”

“It seems unbelievable that in this day and age you can have a war in Europe,” the Austrian continued. “It’s 400 kilometres to Vienna. And that’s why we are seeing robust steps in order to make clear what we think is the right way to go.

“I think invasion is not the answer to political questions, in my opinion. We as an organisation have to manage that as well. We have more than 25 different nationalities and we need to be respectful and that’s certainly not easy.”

Speaking in response to a question from RaceFans at the Bahrain test on Saturday, Aston Martin’s Sebastian Vettel described the situation as a “nightmare.” He wore a helmet bearing the message “no war” during last week’s test.

“I wish I would have not come up with the design because there was no need,” Vettel said. “It’s a strong sign to just show the support.

“All the drivers got together as well on Wednesday as we thought we’d use the opportunity to just show that we are united and take a stand. It’s horrible what’s happening. It’s like a nightmare and we don’t seem to wake up.”

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Claire Cottingham
Claire has worked in motorsport for much of her career, covering a broad mix of championships including Formula One, Formula E, the BTCC, British...

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  • 14 comments on “For F1, the implications of Russia’s war go beyond one race and one team”

    1. The Russian oligarchs and their money will be replaced by Chinese and Arab oligarchs that are possibly worse.

      And will keep having hypocritical quote from teambosses that receive, what is in essence bloodmoney, from the company’s of these oligarchs.
      While trying to ignore what’s going on. They call it sportwashing for a reason it has been going on for 100 years and will continue to do so.
      Anything said about it by people involved in the sport is trying to absolve themselves from any responsibility. It’s not their concern where the money comes from, aslong as they can build and play with the F1 toys.

      1. although I agree with your position, still, shooting on escaping civilians and bombing hospitals is, if possible, on yet another level

    2. Yes well, we could see not just F1 but all international sports come to a halt if China decides to help Russia out by supplying them with assistance. The US is putting huge pressure on China to stop buying Russian oil & gas as well. What I read the other day about the US-China meeting in Rome, was basically a screaming match, it’s going to be very dangerous in the next few weeks.

    3. Yes, implications could go beyond the Russian GP cancellation+contract termination & Haas.
      Interesting note on Azerbaijan. While pondering possible Azerbaijan GP impact is premature, I already started doing that a bit by thinking what circuit would be the most fitting replacement in a cancellation scenario & that’s Indy unless unviable for that June weekend for some reason.

    4. For me, statements like those by Toto Wolff show how poorly Formula 1 as a sport and the western world in general have handled this illegal war waged by Russia.

      Human rights, democracy and equality are held up as western values by the same people who support tinpot dictators and lunatics like Putin. This hypocrisy needs to stop.

      1. This. Exactly this. Leaders in one of the most global sports makes statements like this. Unbelievable. This goes to show the West only cares about humanitarian crisis when it hits their continents. The same bosses, the same sport is racing for the next two weeks in countries with bad human rights records and one of them is directly involved in bombing two countries.

      2. That is certainly a fair point to make, yes @husseynrazaq. We all know who pay most for these races to take place. And we know where the money earned by such regimes is hoarded and spent.

    5. As noted above, I think the bigger concern in terms of other countries getting drawn into the conflict will be China. They are trying to walk a fine line between supporting Russia but not supporting them so much they get sanctioned. If they cross that line by offering military equipment or further financial assistance to allow Russia to mitigate the sanctions that have been placed, that will undoubtedly incur some form of sanctioning on China from a large portion of the rest of the world. It is anyone’s guess what those potential sanctions would be if China were to get more involved, but given how tied into China’s economy F1 is, that could have far larger implications than the Azerbaijan GP and would potentially impact not just a single race, but a driver as well as sponsorship money for many, if not most of the teams. For teams like Mercedes, Ferarri, Aston Martin, Red Bull, etc. where their parent organization’s income is strongly tied to the Chinese economy, sanctions there would further impact the budgets of the teams.

      1. @g-funk Good notes concerning China. Perhaps even COTD worthy.

      2. Considering that the vast majority of Apple Inc.’s (“Designed by Apple in California Assembled in China“) product assembly remains in China, any sanctions against China would have a catastrophic effect on their trillion-dollar evaluation. American automaker Tesla has a major factory in China that accounted for around half of the 936,000 vehicles they delivered globally last year. CEO Elon Musk has stated publicly that Gigafactory Shanghai has surpassed Fremont, California factory in production capacity, and Tesla has made the Chinese factory its new main export hub.

        The USA is all about the money. US sanctions against China will not happen.

    6. “It seems unbelievable that in this day and age you can have a war in Europe”

      Europeans can be involved in many 21st century conflicts, but it’s sucks to have to host one.

      1. It’s a fair point. Though some Europeans are more implicated than others. Looking at you UK.

    7. Why the hypocracy
      17th March 2022, 7:44

      Can we also boycot the races in the US? I mean warmongers there too right?

      The western world only cares when the casualties are fair skinned.

    8. David Dzidzikashvili
      20th March 2022, 12:19

      What is happening in Ukraine today these events had been happening for the past 20+ years, when Putin came into power by bombing his own people – civilian apartments and committing atrocities against the Chechen people. The response from the US, EU and NATO had been just complete silence and welcoming Putin to the summits and holding red carpet meetings for him. This further emboldened Putin who attacked Georgia in 2008 and conquered Abkhazia and Samachablo. What did the Western powers do? Absolutely nothing! Reset by the Obama Administration and warm handshakes by Merkel, total ignorance of the international laws and Putin’s war crimes against the Georgian people. What happened afterwards? Putin invaded Crimea and Eastern Ukraine. What did the Western powers do? Bare minimum of symbolic sanctions that continued to feed Putin’s war machine. Then Syria, use of chemical weapons, more atrocities… What did the Western powers do? Absolutely nothing!
      So we are here as a result of Putin’s false perception that he could chew more than he could bite and the 20+ year ignorance from the EU, US and the NATO. Today there is strong response and sanctions that will take the Russian economy back to the 1990s indicators, however it is too late and too little. Ukraine needs the Patriot missiles, S-400s, S-300s, missiles to shoot down airplanes and incoming rockets at much higher altitudes than Stingers could reach, Ukraine needs much more firepower and the ability to control and close its own skies. Lets help Zelensky establish the No Fly Zone! The Biden administration looked weak, but slowly they are starting to wake up and see the true face of evil – Vladimir Putin who is trying to restore the new Russian empire…

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