FIA, Circuit de Catalunya, 2019

Lower budget cap, ‘aero handicap’ and more cost-saving F1 rules officially approved

2020 F1 season

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The FIA World Motor Sport Council has approved new rules for the 2020 and 2021 Formula 1 seasons, mostly aimed at reducing teams’ costs.

As previously revealed by RaceFans, the changes also include provisions for how the championship will hold races without fans this year, which it calls “Closed Events”.

The WMSC approved a reduction in the budget cap, a rise in the minimum weight limit and the new ‘aero handicap’ rules, all due for introduction in the 2021 F1 season.

The ‘aero handicap’ will limit how much aerodynamic development teams can do based on where they place in the constructors’ championship. Leading teams will have to obey tighter limits on wind tunnel and computational fluid dynamics (CFD) research than their rivals.

In addition to the tighter restrictions on aerodynamic development, limits on power unit test bench use will also be introduced, though these will not be linked to championship positions.

As reported previously, next year’s budget cap of $175 million (with exceptions) will be reduced to $145 million, and fall by a further $5 million in each of the following two years. Staff entertainment costs will be capped at $1 million, but employee wellness programmes including, significantly, provision for vaccinations, have been excluded.

Following the earlier decision to postpone new technical regulations from 2021 to 2022, new measures have been agreed to limit how teams can develop their current designs next year. The details of which components will be ‘frozen’ from 2020 to 2021 have been ratified and a system of ‘tokens’ introduced to allow teams to make a limited number of changes ahead of next year.

The rear floor of the cars will be reduced in size next year in order to reduce the amount of downforce cars can generate. This is to counteract a forecasted gain in downforce as a result of aerodynamic development elsewhere on the cars.

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McLaren, who announced yesterday it would reduce its F1 workforce by around 70 staff members as part of cuts totalling around 1,200 jobs in its wider group, immediately released a statement praising the new regulations.

“Formula 1 wins today,” said McLaren Racing CEO Zak Brown. “This is a crucially important moment for our sport. F1 has been financially unsustainable for some time, and inaction would have risked the future of F1 and its participants, who are to be commended for resolving this issue collectively and determinedly.

“A uniform budget cap, in concert with more even distribution of revenue among the teams, will ensure greater competition and more people wanting to watch live and on TV, driving more sustained revenues to underpin the long-term financial health of the teams and the sport. Ultimately the fans win, and if the fans win, the whole sport wins too.”

More on F1’s new rules for 2020 and 2021

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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28 comments on “Lower budget cap, ‘aero handicap’ and more cost-saving F1 rules officially approved”

  1. I can’t help but feel like they’re grasping at straws. Perhaps I’m just missing being able to see the entire picture, but it doesn’t feel like they have a well defined statement of the problems, a list of solutions and a plan to implement the solutions, either at once or in stages, to get them from where they are to where they want to be. An example for me is the new aero handicap, with the budget cap and testing restrictions, how are the smaller teams going to perform in-season analysis, testing and modification of their aerodynamics to the extent that they can make significant in-roads into an existing performance gap? Keeping in mind that they’ve already spent a significant amount of their budget on the initial design of the car and pre-season testing and will likely have to hold back a large portion of the remaining budget for car repairs and maintenance.

    1. I kinda agree @velocityboy – not sure if they’re grasping as straws or just adding window dressing to make it seem like they’re doing something marvelous to pander to shareholders etc.

      The budget cap being lowered – yeah I can see that, but then surely that just means they got it wrong initially? Teams like McLaren have already cut their spend, not because of the regs but because of current conditions and I expect others will too.
      The rest – some really weird handicapping system? if the teams that stand to benefit haven’t got either the budget or the expertise won’t make any difference. changing the floor of the cars for 2021 – adds expense all round for everyone.

      Maybe like you I’m missing seeing the full picture but I can’t shake this feeling that its all a bit of window dressing that is meant to make us all feel like something extra’s been done to “save” F1 when

      1. @dbradock Yes, absolutely they got the initial budget cap wrong. F1 held ransom by the top teams not wanting to give up their advantage pushed for a much higher cap. It was the result of compromise—once which realistically wouldn’t have changed the status-quo.

        Now there’s no need unanimity, and Carey has called Ferrari’s bluff, they’ve been able to implement the budget caps they wanted originally.

  2. I thought the aero handicap would be some loathsome apparatus like the CART handford device. But the reality is more silly. I don’t think there is a relationship between tenths on the track and hours on the computer at the margin. It depends who is holding the mouse (or in Newey’s case the pencil and paper).

    1. But isn’t that the whole point of it @dmw? Just as we want drivers to get the most out of their equipment to show who is the best, this also motivates the teams to get the best out of their limited aero “budget” by hiring the best and developing the most efficient way of going about development.

      I think one reason why Red Bull, and Mercedes too have been good at improving their cars constantly, is how they have been able to make sure that most of the stuff they develop andbring to the track works. In contrast we saw Ferrari having to walk back on development, saw Haas never really being able to figure out how to get on top of their chassis and learnt that Williams felt doomed from the first tests for much of the last 2 years because they weren’t able to even find anything that could give them that step forward.

      The point shouldn’t be to just “cut down” the big teams. And equally so, no sport should be about who can pay for the most development to get something out at the end either. Instead the target is to reward those who can make the most out of what is available

      1. Richard Phillips
        28th May 2020, 14:30

        I agree; pulling down the leaders isn’t the best way to level the playing field (though I’m not for that, either, in any sport.) It would be better to give the last place team two weeks alone with any other team’s car, the last-but-one team a little less time, etc. and let them copy what they want. No engineering data would be exchanged, beyond what the lower placed team can glean from the physical car.

  3. In times of crisis we see the value of true leadership or lack thereof. Pathetic micromanagement measures adopted. This will only speed up the demise of F1. One can hope Formula E becomes bolder and take over the pinnacle position in motor racing by the end of the decade.

  4. So instead of seeing how the new (now) 2022 rule changes will effect the racing, we’re getting ridiculous micromanagement of which teams get to spend more time developing.

    When did F1 stop being a sport? Could you imagine the likes of Usain Bolt being told he’s not allowed to train as much just because he won so many times? It’s ridiculous.

    I can understand the cost cap, but the development thing is just utter rubbish.

    1. @jamiefranklinf1 it stopped being a sport the moment Bernie was granted the commercial rights for 99 years.

    2. We’re often too concerned with equality in F1, because we still think this is a sport, but it should be regraded more as a show or an entertainment program.

      I actually like the aero handicap rules. The top teams have the best engineers anyway, either because they can pay more or because of their fame. So I’m sure these brilliant engineers will find creative ways to still be put their teams on top, but hopefuly the races will be a lot closer.

  5. I’m surprised by the amount of negative comments on this.

    F1 has had a handicap for many, many years already, except it was the opposite, it handicapped the slower cars and rewarded the faster ones through a grossly unfair team payment structure.

    It is well understood and accepted that dollars equals resources, personnel and design hours which in turn equals performance on track. This regulation is simply trying to reverse some of those years of damage by allowing more development to the back end of the grid without pushing up costs.

    I think it is quite a clever and unobtrusive way of achieving the clearly stating goal of tightening up the grid for the health of the sport. 6 years and counting of three teams sharing almost every podium position on offer, race after race, has to stop.

    I for one applaud the FIA and Liberty on this one.

    1. So, because F1 can’t change the payment structure, instead they change the nature of the sport.
      Trying to cancel out the negatives.
      Or a paradigm shift from purist sport to pro wrestling.

      That just doesn’t sound right to me.

      1. F1 HAS changed the payment structure, and quite dramatically. But it will take some years for the effect of this to be fully seen.

        In the meantime, they have implemented this aero development handicap to help close the field. I imagine the effect will only be subtle, Williams are not suddenly going to find 2 seconds because of this.

        1. Aero handicap is nothing more than the modern equivalent of punitive ballast…

          It is artificial and it is lame and has got nothing to do with sport.

          1. You call Mercedes budget, facilities and head count vs Williams fair..?

            We could do this all night… F1 is not fair, never has been.

        2. Equality of opportunity vs equality of outcome.
          The first is fair, the second is a utopic communist dream state. You are preaching the second.
          Being able to find the resources to run a succesful F1 team is as much a skill, as it is to design the car, manage the staff, drive the car, cook the staff food, transport the equipment etc, etc.
          Every cog of the machine is important and every team will have and has had the same opportunity to do so.
          Punishing competitors for being good at the sport, is just lowering the bar of the required skills.

          1. @SadF1fan
            When did Williams have the opportunity to pull unlimited money from their global manufacturing superpower parent company?

            You say it’s punishing the winner, others say it’s assisting those less fortunate for the benefit of the entire competition/show/business and everyone who is connected to it. Yourself included.

      2. synonymous
        28th May 2020, 7:58

        When was F1 a purist sport?
        Not since before Bernie took control, at least.
        Spending more money than your competitor isn’t sport. That’s business, which F1 has put before sport for several decades now.

    2. I agree too. From what I can tell it appears the teams at the back of the grid have more “floundering” in terms of getting a car’s aerodynamics to work correctly in different environments than the teams at the front of the grid. So while this should help those at the back of the grid, I’m definitely not expecting those at the back of the grid one season to be at the front of the grid next season (unless they bring in that reverse grid start system).

      1. @drycrust exactly. The teams at the back don’t understand their cars as well as the teams at the front (Haas, Williams) so the extra aero development is much less effective/efficient than a top team with the same time.

  6. This is a good outcome for the sport. All the detractors around restricting development really need to understand how F1 cars are actually designed and built before they shoot off comments about micromanagement and such like. The actual resource amounts is a small (admittedly important but crucially disproportionately expensive) part of the puzzle, but beyond these hours/runs/TFlops, there is a huge amount of tooling for analysis and development – none of which is restricted. Teams have to become smarter, hire the best people, and be innovative – all things that are trademarks of some of the best eras in F1.

    1. Thank you! Some actual understanding! What a relief.

  7. I’m a fan of the cost cap, not so much the aero penalties. I’d rather them just introduce a cost cap, and see how it goes than introduce both at once. Give the teams an equal playing field to start with before you start handicapping them.

  8. The ‘aero handicap’ will limit how much aerodynamic development teams can do based on where they place in the constructors’ championship.

    Setting aside the whole argument about penalizing success, I have a question about the implementation of this aero handicap: – are the caps determined solely by finishing position, or by the points gap involved? I sincerely hope it’s the latter, even though it is going to be mathematically more complex to compute.

    For instance, if two teams finish 6th and 7th but are split by a single or two point (a not-uncommon occurrence in the midfield), then is the difference in the aero handicap should be minimal, since they almost tied. However, if the rule goes by “each WCC position drops the aero research ceiling by 2%”, that seems unfair to the sixth-placed team.

    Conversely, if there’s a points gulf between the last-placed team in the “upper midfield” in 6th, and leader of the “lower midfield” pack in 7th, then I’d expect that the group starting at 7th get a much healthier leg-up in the aero handicap.

    1. @phylyp Interesting points (no pun intended).

      I wonder if there would ever be a situation where a better sponsored team could afford to forgo the prize money difference in lieu of gaining extra aero development time.

      1. I think this is a good point, as we have seen from Racing point this year their car looks like last years Mercedes. How much real R&D have they done in testing this as a model or have they just built the car from the specs they have gathered? If we for example say they have built it without R&D costs then they still have a full budget to then develop and tune it. So Is it better for a well funded team to bring last years car to track, know its off the pace and then sit back and watch the arms race and then decide on how to develop a car?

    2. @phylyp: You have made your point. However, what hasn’t been revealed is that no team will be ranked below 3rd place.

      For the first time in F1, every team will be on podium! It’s the fair thing to do. Reward incompetence and the cream can take care of itself.

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