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Johansson’s radical proposal to make F1 awesome again – Part 1

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Johansson’s radical proposal to make F1 awesome again – Part 1
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Apr 22, 2019, 2:25 PM

Stefan Johansson, former Ferrari and McLaren Formula 1 driver, has done a lot of thinking – and writing – to come up a with a template for a radically revised version of the sport he loves. Here is the first of a four-part series on what needs to change and why.

This is an effort to offer my views on the current state of motorsport, and Formula 1 in particular. For some time now, and for whatever reason, there seem to be a lot of negative comments and chatter from the people inside the business as well as from fans all over the world.

Why is that? How did we arrive at this situation from a time not that long ago when things were seemingly mostly positive, viewership was huge, the cars were fast and spectacular to watch, we had some great personalities in the paddock, superstar drivers racing the cars and plenty of action and drama on the race track, both between the teams and the drivers? Money was flowing into the business and global corporate sponsors as well as manufacturers were all lining up to be part of the show. Teams were selling at a huge premium and everyone involved in the business was prospering.

Of course, there is not a simple answer to any of this. For sure, the majority of negative comments today is in part due to easy media accessibility for all, but it seems to me there are real elements of concern in the sport and they have arisen from a gradual process of poor decisions.

In some cases on the technical side, knee-jerk decisions were based on either a bad accident or complaints from the fans and media about the racing not being good enough; in other cases, decisions were based on pressure from certain teams or manufacturers in order to keep them in the championship; and finally, but very importantly, a level of political correctness has crept in that, at least in my opinion, has done nothing to make the racing any better on any level, but has instead only contributed to pushing the costs through the roof and created a greater division between the teams, and, as such, made the racing too predictable and less interesting to watch.

As a result of all this, the technology has evolved to where we are today, and most importantly, was allowed to evolve to a point where the budgets suddenly went into the stratosphere.

At the same time, the business model for the commercial rights holders have changed dramatically since the introduction of pay-per-view instead of terrestrial TV, which means that there is theoretically more revenue, even if derived from significantly fewer viewers. The byproduct of this is that there is less interest for sponsors to spend big money as their metrics are primarily based on the number of eyeballs watching, and in particular, eyeballs in places where the demographics support purchase of the sponsors’ products – not all eyeballs are created equally in the minds of the sponsor – Unilever and Heineken differentiate between reaching eyeballs in Azerbaijan versus Germany and the US.

In addition, there are now a number of different viewing platforms besides TV, which is causing even more confusion and a hard-to-quantify environment for companies to select the best strategy to market their products. The challenge the series and the teams are now facing is how to grow or even just maintain their eco system.

So, as a result of there currently being a less attractive return-on-investment proposition for the global sponsor, we now have a situation where every team is more or less wholly dependent on the money they receive from the series, i.e. from the FOM, as this represents the bulk of their income. This was never the case before, when major sponsors were the main contributors and the money the teams received from the series was almost the icing on the cake, especially if they did well. Hence, there are now several teams racing without a main sponsor, or if they do have one, it’s for a fraction of what a title sponsor used to pay.

Through all these various rule changes that have occurred in recent years I have a feeling that Formula 1 has somehow lost its identity and I am not sure anyone, whether it’s the FIA or Liberty (FOM), really know what Formula 1 stands for anymore. I believe we are now at a point where another two or maybe three decisions in the wrong direction could spell the end of F1 as we know it. People are already tuning out because they have either lost interest or it’s too predictable or not exciting enough. The younger generation doesn’t seem to care, F1 and motorsport in general is struggling to catch their attention. I challenge anyone to define in three words what F1 stands for today.

In order to arrive at a situation that has the right balance between Economics, Competition, Entertainment and Relevance, it’s important to first identify the individual areas that matter the most and focus on getting these right and at the same time eliminate the areas that matter least.

I will first attempt to identify the areas that I feel are important and will then go into more detail on each individual item and come up with what I believe could be a solution, or at least open the door for a debate or dialog in order to find the best way forward. Today.

ECONOMICS

Background

There’s been talk for some time now about various ways to bring down costs but no decisions have been made on how to achieve this. In the meantime, the costs are gradually creeping up every year and it’s now gotten to the point that even the world’s largest automotive manufacturers and the largest corporate sponsors are reluctant to compete in Formula 1. This being the case, the cost to compete is so high, so prohibitively expensive, that it serves as a barrier to those who would naturally be and traditionally have been involved in the sport.

The major cost is in the constant development war, with the aerodynamics and the power units being the largest contributors of excessive expense for the teams and the engine manufacturers. Despite efforts to curb the costs through various sets of rules, such as limitations on the number of engines and gearboxes used in a season, all it seems to have done is the exact opposite and in fact driven the costs of producing these units much higher. The cost of manufacturing an already developed engine or gearbox is not that expensive in the overall scheme of things, but the cost of developing and manufacturing an engine that must last one-third of a season is extremely expensive and seemingly far outweighs the cost of using several engines during the course of the season

Adding the hybrid component to the powertrain has done more damage than all the other rule changes combined in my opinion. It seems that in order to meet the politically correct agenda that is now creeping in to every facet of life, it’s somehow been decided that this is the future of automotive engineering and needs to be part of Formula 1 as well. Pushed by the manufacturers (under the premise of wanting the formula to have relevance to the manufacturer’s production lineup) who put pressure on the FIA, Formula 1 had to follow, along with the WEC. Interestingly, both series are now completely controlled and dominated by the OEMs and would not survive in their current formats without the money being poured in by the manufacturers competing. The privateer or independent teams are now just the clowns that make up the show in both series and have no realistic chance of ever winning a race.

So, this means we are stuck with three teams in F1 and currently only one team in the WEC that have any chance of winning. This seems an incredibly high trade-off just to be doing the politically correct thing. By introducing this rule and subsequently allowing the manufacturers to effectively take control of both series, it will take some major undoing to get things back on the right track again. What we have now is an engine formula that is turning manufacturers away rather than inviting them to join, which is a very dangerous path.

As we all know from past experiences, it’s only a matter of a board decision for any manufacturer (except Ferrari) to stop any racing program if it doesn’t suit their purpose for whatever reason. None of them have any real emotional attachment to racing, which has been shown by Toyota, Honda and BMW who all pulled out of F1 within a few years of each other.

I strongly believe that the current concept of racecar design needs a complete reset in almost every major category, but particularly in Formula 1. There has been no real innovation since the discovery of aerodynamics. Every aspect of a current racecar design always has aero as the first priority, as this is what gives the most gain in lap-time by far. But as we all know, aside from making the car go faster, there are very few benefits from aerodynamics, if any. It’s the #1 factor in driving the costs higher, it’s the #1 factor in making the racing less interesting, it has no relevance aside from making the car go faster, yet it’s been the primary focus in every single form of racing the past 30 years or more. It’s time for a major reset. The cost of the development war is escalating every year and will continue to do so as long as aero is the prime factor in making the cars go faster.

Another contributing factor to the high cost is the fact that each team must build most components themselves rather than buying “off the shelf” components already manufactured and tested. A loose interpretation of the old “B” team concept (using the parts and resources from another team that is legally allowed) has slowly crept in for teams like Haas, Sauber (Alfa Romeo), Toro Rosso and Force India to some degree. Under the current set of rules, this is a far better approach than trying to design, manufacture, test and run every single component yourself. We can clearly see the result of this: Haas and Sauber (Alfa Romeo) are now consistently the “best of the rest” teams.

The result of this is that the “A” teams are starting to gather more and more control of the teams they are supporting, including the choice of drivers in some cases. The concern the midfield teams have is that if we are not careful, the entire grid will be controlled by the major manufacturers and it will turn into another version of the DTM, where three or maybe four manufacturers control the entire field with satellite teams that are under their complete control.

There has been much discussion about a cost cap, and how to implement it. I don’t believe you can ever entirely control a fixed cost cap because teams will always find a way to circumvent a rule like that. The most effective way in my opinion is to limit the development in all the key areas on the cars that are irrelevant in the bigger picture. There are many areas or components on a car that I believe could be standardized and no one would even know or notice the difference. This would have the same or similar effect to the “B” team concept, but it would be the same for everybody, and it would automatically level the playing field in the process. Some of these areas are:

AERODYNAMICS

  • Set a fixed limit on maximum downforce (more details to follow in the chapter on Competition). This will eliminate the massive spend on aero development that is currently by far the biggest line item in the budget.
  • No aero add-ons allowed on any surface parts of the car. This will still allow for each team to design a car that is unique looking and will have its own interpretation of the rules, but the emphasis will shift away from purely being made to optimize aerodynamic downforce, and instead shift to other areas that will be of equal importance.

By having a fixed limit on downforce, it will stop teams spending time and money on constantly finding different avenues on aero development in order to gain back the original loss. If the amount of downforce is always fixed, they will be forced to look in different areas to get more performance out of the car. This will drastically reduce the budgets as a large majority of the R&D budget is spent on the neverending aero development war.

FRONT WING: Provide a standard front wing issued by the FIA (no one can tell the difference anyway so it really wouldn’t matter). Even Adrian Newey agrees that if you painted all the wings white and put them next to each other no one would know what wing belong to what car. A large portion of the aero budget would go away if the front wings were fixed and the same for all the teams, supplied by one manufacturer chosen by the FIA. As there is no innovation involved in any aspect of this because of the way the rules are written, it is purely a matter of optimizing to the umpteenth degree. Whoever has the most resources will eventually gain an edge, and the money being spent on this entirely worthless endeavor is just mindboggling.

BRAKES: To put things in perspective, a top F1 team’s brake budget is nearly equivalent to a winning IndyCar team’s full-season budget. No one can see or relate to the insanely complicated brake ducting systems each team now must develop. If they were all given the same brake system and brake ducts it would be the same for everyone and no one would even know. With the greatly reduced importance of downforce, it would make sense to go back to a simple brake system whose primary function is to stop the car, not to add more downforce or create more efficient aero.

MONOCOQUE: The FIA should produce a standard tub for all the teams to use that fits their safety criteria and that’s been crash tested by them. It’s a very expensive and unnecessary cost to have every team design, build and then crash test their monocoques before the start of each season. It would make much more sense for the teams to build their engine, cooling and aero package around a tub that is being provided by the FIA at a fixed and reasonable cost. It would save a huge amount of money and again no one would know the difference. Whatever creativity goes into the design of the tub would simply shift to a different area. It may not be the ideal solution for every team and engine manufacturer, but so what? The tub has little relevance apart from bolting the engine, suspension and all the aero bits onto it.

ELECTRONICS AND DRIVER CONTROLS: Implement standard electronics for all the teams. Eliminate most of the current adjustments on the steering wheel. Every button, dial and switch on the steering wheel ultimately leads to somewhere on the car, whether it’s the diff, engine, brakes, steering or whatever. Assume then that each one of these functions requires a significant number of people to design, develop, build, test and maintain for each system. Rinse and repeat every race. The sheer manpower required to develop and maintain all these functions is staggering, and in the end, every team must do the same in varying degrees, and all it does is eliminate more and more skill elements in the driver’s arsenal. This may be the most obvious area that needs to be addressed in order to make the racing a little less predictable and put the emphasis back on driver skills, and by doing so, reduce the costs dramatically.

GEARBOX The gearbox on a current F1 car is a work of art, the engineering is simply mindboggling and the size of some the components are so small they almost look like a Swiss watch in certain areas. Then bear in mind that each team must design, build and maintain these gearboxes. It would be very easy to have one independent manufacturer build the same gearbox for all the cars, no one would know or indeed care. We are already at the point now where the “B” teams are using the complete backend of the “A” team they are associated with. This includes the gearbox, differential, rear suspension and electronics. It would bring the costs down massively if everyone would just use the same gearbox, supplied by the FIA. It would also help level the playing field as this is one very costly component that has very little relevance to the overall importance of the package.

BAN ALL FORMS OF COMMUNICATION WITH THE FACTORY DURING RACE WEEKENDS
This is another area which is completely and utterly unnecessary. I have seen the set-up from one of the top teams first-hand and although it’s incredibly impressive, it does absolutely nothing to add to overall package. Do we really need a team of 20-30 people at the base to assist the race team with setup and race strategy, including test drivers running intra-session setup scenarios or overnight full-race simulations of various setup alternatives? It’s just another added cost that one team started and then everyone else had to follow. It’s only helping teams to optimize the setup and race strategy, and by doing so, taking another element of unpredictability away, again at a huge cost.

Will these changes hurt Formula 1’s DNA? F1 lost its original DNA a long time ago as far as I’m concerned. The original rule which was kind of the foundation of F1 and what made it different from almost every other category in racing was that “every team had to manufacture their own cars.” The argument from the purists is that if we allow standard parts, then F1 will just become another form of IndyCar, where all the teams use the same chassis. If we are brutally honest, F1 is already almost at that point due to the incredibly strict rules every team has to operate under. There is little room for innovation in any area under the current rules, so every team basically ends up doing the same thing, instead of just using a number of items that are supplied directly from the FIA at a fraction of the cost of having to manufacture every component themselves.

COST SAVINGS: A very rough ballpark estimate of the potential savings from the suggested changes above would be somewhere in the region of $80-100m/year, maybe a lot more than that for the top teams, as their development would effectively stop in many areas. The breakdown of savings would look something like this:

BRAKES: $5-7m
AERO DEVELOPMENT: $30-40m
MONOCOQUE: $3-5m
FIXED FRONT WING: $10-15m
GEARBOX: $10-15m
ELECTRONICS: $5-7m
POWER UNIT: $20-30m

I’m not sure how many jobs these changes would eliminate, but it would be more than a few. Payroll is always one of the highest line items in the budgets. I understand and I am sympathetic that there will be many jobs lost due to these changes but, like in any business, sometimes you need to change to make things work. Car manufacturers are not afraid to shut down entire factories, with tens of thousands of jobs lost, if it doesn’t fit whatever decisions they make at the time. Just because the teams have themselves gradually created a monster, in large part thanks to the manufacturers pouring crazy money into the series, and the governing body not recognizing this until it was too late to stop it, they are now faced with how to fix all this in order to ensure their long-term survival.

REVENUE FLOW: The total payout from Liberty (FOM) to the teams over the past 3 years is averaging around $950m/year. This is then distributed through a complex formula among all the competing teams with a very complicated set of rules based on different tiers and how long each team has been competing, the importance of each team, and not insignificantly, what deal each team was able to cut with the old F1 owners when they needed some sort of concession. As things stand today, the FOM payout is heavily biased towards the top teams.

Hardly any followers of the sport are aware of how this works except the die-hard fans. It would be much fairer and also more interesting to the fans if a payout system was used that started with a fixed amount for each team. The total amount could be $500m ($50m/team). The remaining funds would be the official prize money paid out based on performance in each race, so a rough total of $450m/year paid out over 21races. These numbers should be official, transparent and the same for each race. If the winner of each race gets $5m, then there would be something to talk about. Money talks and people are intrigued about it, it’s human nature. Why keep one of the key talking points for people a secret when it’s already one of the highest payouts in sport and would create some excitement and intrigue among the fans? If we use a very simple formula that everyone can understand based on $200,000/point scored, the total payout for 2018 would look like this:

Mercedes-Benz: 655 points x $200,000 = $131m+$50m = $181.0m
Ferrari: 571 points x $200,000 = $114m+$50m = $164.0m
Red Bull: 419 points x $200,000 = $83.6m+$50m = $133.6m
Renault: 122 points x $200,000 = $24.4m+$50m = $74.4m
Haas: 93 points x $200,000 = $18.6m+$50m = $68.6m
McLaren: 62 points x $200,000 = $12.4m+$50m = $62.4m
Force India: 52 points x $200,000 = $10.4m+$50m = $60.4m
Sauber: 48 points x $200,000 = $9.6m+$50m = $59.6m
Toro Rosso: 33 points x $200,000 = $6.6m+$50m = $56.6m
Williams: 7 points x $200,000 = $1.4m+$50m = $51.4m

TOTAL: $925.0m

In addition, there could be a $25m bonus for winning the championship, bringing the total payout to $950m.

With the proposed technical rule changes, there will be sufficient income for every team to operate and be fiscally sound. If they then wish to improve their competitiveness it is up to each team how hard they are willing to work to find more sponsors, hire better drivers and personnel – and there will still be a level of skill placed on spending money efficiently on the right things to bring the success each team aims for – whether it be winning the championship or having the nicest hospitality unit.

 

From the editor, also read:

 

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Series Formula 1
Drivers Stefan Johansson
Author Stefan Johansson