Why Formula 1 goes from absolute ruin to the new rich syndrome in five years

It is undeniable that the maximum specialty of motorsport lives in full boom at all levels. From the following indexes, the assistance to the circuits or the arrival of sponsors, the spectacular growth since the arrival of Liberty Media is undeniable. However, complacency and overwhelming success would be very dangerous in such a short period of time… which should also serve as a warning to warn that falls can be just as fast.

Part of the success that is also attributed to Liberty Media, in reality, is not exactly theirs, because if a Formula 1 team today is a highly coveted asset and is not the money-losing machine that it was until very recently, it has its roots precisely in the fact that the previous model hit rock bottom. Keep in mind that, as they say, it was the day before yesterday, when teams like HRT, Caterham or Manor and what ibrilliant names like McLaren or Williams flirted with the disappearance in a critical financial situation.

For things to change radically, it was necessary for sport in general to see the ears of the wolf and realize that they went straight to the precipice under the previous model. As if the economic tribulations of a large part of the grid members were few, there was also a significant uncertainty regarding the future of the specialty itself in the face of the transition in the automotive industry from combustion engine to electric drive. Many would-be gurus took it for granted that Formula E was the future and Formula 1 was the past, condemned to a slow and irremediable agony. Nothing good to convey solvency.

There is no magic recipe but show

If we had listened, for example, to ‘prophets’ like Richard Branson, the patron of Virgin, It’s been two years now that the electric propulsion Formulas would be ahead in follow-up and economic importance than Formula 1 and as we can see, Far from fulfilling such a prophecy, Formula E is going through difficult times while the one that has always been known as the Queen Formula, lives days of wine and roses. The reason is very simple: the show.

No matter how much packaging you want to give to a championshipat the end of the day what people want to see are the fastest cars on the planet, piloted by the best pilots in the world. Wherever the hair-raising machines and recognizable names are, there will be massive popular interest and the auto industry and big sponsors in their wake.

Because in addition, it is often forgotten that the ‘polluting’ Formula 1 has done much more in terms of research and technological development in electric propulsion systems than Formula E. Mercedes itself when it announced its departure from the electric single-seater championship and formalized its long-term commitment to the Formula 1 was very clear in stating that this specialty was a much better testing ground for new technologies. And when a giant like Mercedes, which is betting heavily on electric motors in its road cars, makes that decision… it is a clear sign that, although it is paradoxical, if you bet on sustainability you have to be in Formula 1 and not in Formula E.

The reason for the success of Formula E all these past years was because provided very contained participation costs and an excellent marketing platform to distribute the message of an electrified automotive future. However, as has always happened, the huge amounts of money that moved in Formula 1 they were the ones that propitiated the prodigious technological advances in record time. One thing leads to another: you give me an impact, I give you money for your engineers to do mischief.

The problem arises when, in this technological race, costs start to get out of hand and end up making them unsustainable even for the great titans of the automobile industry. That was just the point where the teams in general and the FIA ​​(International Automobile Federation) in particular they realized they were headed for the precipice and forced them to take drastic cost cutting measures and to level the competitiveness of the grid with a certain equality in the engines.

McLaren’s Mercedes engine, for example, may not have the last ‘magic screw’ that the official team has, but it has been proven that their level of competitiveness is even enough for the ‘client’ to outperform the ‘supplier’ on occasions. And not only that, but the price of these power units must be accessible. We already know that saying ‘affordable’ at 40 million euros per year sounds a bit sarcastic, but put in perspective of the income of the teams, having an engine as good as the best for that price is reasonable.

Budget limits will always suffer from loopholes that will be exploited by the most powerful teamsbut the reality is that the differences between the first and the last car on the grid are in recent years the shortest in history. That is the real factor that makes Formula 1 today an attractive club to join and a sport that is constantly growing in its number of followers. And it is that for a lot of marketing and a lot of Netflix’s ‘Drive to survive’ that you put on the product, if the races are always a tostón and there is no competition on the grid, there is nothing to do.

The importance of competitiveness

It is no coincidence that the aforementioned ‘boom’ of Formula 1 began last year in tow of the epic battle for the world championship between Lewis Hamilton and Max Verstappen. It is enough to compare the exponential progression that was taking place as the season progressed to realize that the main treasure to take care of is that there is equality, that there is a fight for the championshipthat there is talent from different parts of the world and ‘last but not least’ that the championship and its participants then interact in the digital world.

The latter is the part most attributable to Liberty Media, which has turned the restrictive model advocated by Bernie Ecclestone upside down. And it’s not that before it was done badly and now it’s good, it’s that in these last five years everything, absolutely everything in the field of communication has changed. Each model was appropriate to its time. Now, this brilliant growth should also serve to alert us that everything that rises very quickly can fall just as quickly.

The success that is currently being experienced in the United States will, for example, remain a fad unless in a reasonable period of time there is an American team and driver participating (and shining) in the category. Showing off, as the owners of Formula 1 recently did, that they have a queue of car brands interested in participating, or question whether to accommodate the Andretti team because the closed franchise model has skyrocketed the value of the teams, are tics of ‘nouveau riche’. They would do well to banish arrogance or complacency because a change of direction in the industry or the economic environment, we have seen several times in the past how fast and devastating it can be.

It is undeniable that the maximum specialty of motorsport lives in full boom at all levels. From the following indexes, the assistance to the circuits or the arrival of sponsors, the spectacular growth since the arrival of Liberty Media is undeniable. However, complacency and overwhelming success would be very dangerous in such a short period of time… which should also serve as a warning to warn that falls can be just as fast.