Why is F1 broken? – a simple analysis

Why is F1 in a mess?

Well it is a simple equation – cost can improve performance but the rewards of performance are not sufficiently high to justify the costs.

Required Costs: 

  • increasing massively (engines, tyres, logistics)

Discretionary Costs: 

  • stable if you don’t care about performance – increasing if you do care about performance

Guaranteed Income from FOM:

  • unbalanced favouring bigger teams

Performance based income from FOM:  

  • low if discretionary costs are kept low, but not high enough to warrant increasing discretionary costs

Sponsor income: 

  • declining and linked to performance, but not high enough to warrant increasing discretionary costs

 

What is the solution?

Required Costs:

  • don’t cap engine development, but do things like capping charges for engines to customer teams.

Discretionary Costs:

  • mandate lower numbers of pit crew, restrict passes, abolish back to base comms (close factory on race days)

Guaranteed income:

  • rebalance

Performance based income:

  • rebalance – award points all the way down to last place

Sponsor income:

  • ensure transparency and governance to lessen ‘dodgy’ image of the sport and attract more sponsors, enable them to advertise trackside

 

And we haven’t even talked about the economics for the race promoters, which are also comprehensively broken!

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