As the Formula One season kicks off this weekend at the Sakhir circuit in Bahrain, the racing league also enters a period of transition—not only because it plans to operate 23 events in 22 countries through a global pandemic. Whether it’s the sport’s public face or the behind-the-scenes business moves and legislation decisions, F1 is on the cusp of a new era.
Lewis Hamilton – The Greatest Ever?
Winning his seventh F1 championship in 2020, Team Mercedes racing icon Lewis Hamilton could very well break the league’s most hallowed record this year and pass the legendary Ferrari star Michael Schumacher with another championship season. Hamilton and Mercedes recently announced a one-year contract for 2021, which includes non-monetary incentives like veto power over teammate selection and a commitment to the Hamilton Commission, a racial diversity initiative he launched in June of last year. Though the numbers of the deal have not been disclosed by Mercedes, the short term of the contract allows for flexibility, which is important for both team and driver because the Formula One chassis rule update is set to launch for the 2022 season. Teams will design and develop a new car from scratch to comply. It raises the question, if he were to break the record this season, is it worth his hassle and energy it takes to set the team up for the next chapter of the program? If he were to step away from the coveted Mercedes seat, who would be tapped to fill it?
2021 is the first season with an imposed spending cap in the history of Formula One. In order to help level the playing field, teams are now required to spend no more than $145 million per season. But, this budget constraint does not include money spent on marketing; benefits to team members, including healthcare; or the salaries of each team’s top three earners. These pivotal roles are often paid well into the millions per season and are often key decision makers when it comes to car construction, strategy and the like.
Coming soon will be a vote on a proposed salary cap for drivers, though they are pushing back against this because it puts a hard, public value on the talent behind the wheel. While contract numbers are rarely disclosed, this cap would require the veil of secrecy to be lifted. In a sport where your teammate can be your fiercest enemy, public discussion of salaries can create more friction, preferential treatment, and a limit on a driver’s worth. There is much to be decided before the implementation of said salary cap before it is rolled out for 2023. For example, since the limit excludes marketing spending as of now, cash-flush teams can ostensibly earmark funds for drivers as marketing money as a way to manipulate the system.
Much to the relief of Red Bull Racing, F1 voted to enact the “engine freeze” earlier than planned. Formula One teams have only four (now three) engine manufacturers to choose from. Of the 10 teams, Red Bull was the last to carry the flag for Honda. Honda announced earlier this year that it will be bowing out of this level of motorsport to focus more on other areas of the business. Given that the new chassis is already a big undertaking for all teams, the F1 Commission unanimously decided to halt development on requiring a new engine package as well. Honda has agreed to provide technical assistance to Red Bull in the meantime, but Red Bull will be taking over the majority of the engineering responsibility until the freeze is set to lift in 2025. This period forces the teams to focus more on car development, adjusting to the new spending cap, and riding out the rest of COVID while the series looks for other prospective engine manufacturers to participate.
A COVID Season: Part II
Formula One was not impervious to the global pandemic last year. Traveling between countries and continents quickly became an issue as borders were closed and cases began to rise all over the world. In 2020 many races were reshaped, rescheduled or canceled outright. As vaccines become available worldwide, the league has made it clear that the calendar is still in flux. As of right now, there are 23 events scheduled with fans expected in both the grandstands and in the paddock.