Why F1's New Team Rule is a Double- Edged Sword

Money, Money, Money.....

4w ago


The 2022 FIA Formula 1 Technical regulations are insane, with lower downforce, more mechanical grip and less dirty air, which should help make overtaking easier, with more competitive racing. However, the sporting regulations have been changed up as well. For the first time in F1, there is a budget cap of around $140 million that will be put into place next year. There are now also "Balance of Performance" rules in F1, which will restrict development time for top teams and give more time to teams that finish lower in the championship. However, perhaps the craziest new rule is the new entrance cost rule. Stated in there is that from 2021 onwards, any new team wanting to join Formula 1 will have to pay a $200 MILLION entrance fee! Damn, I thought the £45 entrance fee at LegoLand was high, this is a whole new level! Jokes aside, there are some clear disadvantages and some not so clear advantages to this rule.

$200 Million. I wonder how many senior officials will have to sell their kidneys on the black market🤔🤔

$200 Million. I wonder how many senior officials will have to sell their kidneys on the black market🤔🤔


The first main disadvantage is that this will be a major deterrent for new teams. I don't think there are enough Lawrence Strolls to go around for each team to be able to get onto the grid. $200 Million is a huge amount and although most teams in F1 are more than able to pay this amount, I doubt that new teams (such as Panthera Team Asia) will find it easy to muster up this colossal sum.

Secondly, this may lead to problems further down the road for new teams. Let's just imagine that a team has taken a massive loan to pay this $200 million. It's pretty clear that said team will not be a top team immediately. In fact, they may be a bottom team. If this is the case, the team will focus more on saving money rather than improving performance in order to pay off their debts. This will lead to their performance getting worse, which means they won't be able to pay off their debt and the circle continues. Now you may think that this will never happen, but it has. Virgin Racing, turned Marussia, turned Manor was a backmarker team that raced from 2010 to 2016. In early 2016, the parent company of Manor racing went under and the team was left abandoned. This meant that manor had no money left, so they shut down most of their departments. This lead to poor performances all around and huge debts to Mercedes, suppliers and staff. In the end, the team members relented and the team was liquidated. So, this could be a real issue.

Manor was ready to race in 2017, but had no money

Manor was ready to race in 2017, but had no money

So, this rule is bad and should be removed from the rulebook. Right? No.


Ok, so things don't look too good for new teams, but every cloud has a silver lining. This rule has certain advantages that people may not think of. The first and important one is that it will filter out the penniless privateers from the well- funded firms. Let's be honest, F1 is an expensive sport. There's no getting past that. In 1989, the engine formula in F1 was changed and suddenly there were nearly 30 teams in F1. Most of these teams were privateers who were unable to run one car, let alone two. These included: BMS Scuderia Italia, Life F1, Onyx, Rial, Fondmetal, Andrea Moda, Simtek, Pacific, the list goes on. These teams left F1 with crippling debts and hurt prides. However, there were survivors. Sauber, for example, lives to this day with decent results. Why? Because they had good funding and money. This means that F1 remains an exclusive sport with a maximum of 12 teams, not overrun by teams that operated out of sheds and with no money. This was one of the things that set back last decade's new teams. Caterham for example, had to survive on crowdfunding to get to the end of the 2014 season.

Caterham exhibiting the amazing tech in F1

Caterham exhibiting the amazing tech in F1

Secondly, this will make F1 attractive for manufacturers. Formula E has managed to poach most of the manufacturers in motorsport. However, there are some manufacturers still interested in F1. Renault, Mercedes and Honda are committing to F1, while Porsche, who have been having on- off talks with the FIA, may join later in this decade. Aston Martin is also joining the grid in 2021, so the future of F1 may be set as manufacturers will know that they won't have to run the risk of being embarrassed by smaller teams and go to their boards saying "this was a failure", as is happening with Renault.

So, a new rule, a controversial one, perhaps? Who knows, we'll find out more next year.

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Comments (5)

  • So, they've lowered the budget cap to 140 mil, but the entrance fee is almost one and half year's budget worth?? Well, thats one way to do it...

      29 days ago
    • I know, my thoughts exactly. Teams will probably have to freeze development of their car for a year before they can actually afford to develop them

        29 days ago
    • Well, the big boys like Mercs, Red Bull, Ferrari, and Stroll F1 probably, will manage it okay, but guys at Renault, Haas, etc may really struggle there. Maybe thats what they are after, so that the top teams can be even more unreacheable?

        29 days ago


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