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Formula 1

Ferrari would consider future should cost cap be aggressive

by Matt Beer
5 min read

Ferrari says it would be forced to consider its future beyond Formula 1 if stakeholders aggressively reduce the incoming budget cap, and suggested customer cars could be a better short-term solution.

F1 teams, championship bosses and the FIA have been locked in discussions for weeks to chart a course through the consequences of the COVID-19 crisis, which has forced nine races to be officially cancelled or postponed and severely harmed revenue streams.

While they were quick to agree the delay of new technical rules until 2022, carrying over this year’s cars to 2021, discussions over lowering the incoming budget cap of $175million have been less fruitful.

Talks have remained “constructive”, according to the parties involved, but a suggestion last week to reduce the cap to $145m and then even further to $130m in 2022 was rejected by Ferrari.

Along with Red Bull, it has remained adamant that F1 cannot impose a universal spending limit because bigger teams have greater infrastructure and development costs to meet the demands of supplying major components to rivals.

The likes of McLaren, which has tabled an even more aggressive $100m budget cap, dispute this on the grounds that the 2021 financial regulations allow teams to adjust their spending based on the sales/purchase of transferable parts.

“We would not want to be put in a position of having to look at other further options for deploying our racing DNA” :: Mattia Binotto

With more meetings expected at the end of this week and beyond, Ferrari team boss Mattia Binotto has hinted his company could look at “other further options” if undesirable spending levels are enforced.

The Guardian has reported Ferrari is prepared to quit F1, as initially recorded on this website too, but Ferrari says Binotto’s comment was taken out of context.

“The $145m level is already a new and demanding request compared to what was set out last June,” Binotto was quoted as saying.

“It cannot be attained without further significant sacrifices, especially in terms of our human resources.

“If it was to get even lower, we would not want to be put in a position of having to look at other further options for deploying our racing DNA.”

The Race says

While Ferrari says this is not a quit threat, speculation over its future amid unfavourable rule changes is nothing new.

This is not the first time such conversation has occurred because of a budget cap and it’s not the first time under Liberty’s F1 ownership.

Sergio Marchionne

“If we change the sandbox to the point where it becomes an unrecognisable sandbox, I don’t want to play anymore,” the late Sergio Marchionne (pictured above) said in 2017, when he was in charge of Ferrari.

While that analogy was child-like, the language Marchionne used in late-2015 amid another round of cost-cutting discussions was more akin to Binotto’s this week – albeit stronger.

He warned “Ferrari would find other ways to express its ability to race and to win”, and added: “It would be a huge shame [to quit F1], but Ferrari cannot be put in a corner on its knees and say nothing.”

In 2014, Marchionne’s predecessor Luca di Montezemolo raised the prospect of Ferrari switching to sportscar racing after being hugely critical of the V6 turbo-hybrid era, which Ferrari started poorly.

A decade earlier he threatened to set up an entirely separate rival series.

Such threats have been a tactic since Enzo Ferrari’s days in one form or another, yet Ferrari remains ever-present in F1 – which is a marketing platform for the company like no other and also supplements technological development for its road cars.

“If the current emergency really put the existence of some of our competitors in this sport in doubt and made it necessary to revise certain cornerstones, then Ferrari would be open to it” :: Mattia Binotto

While it is fair to say the usual Ferrari quit threats often go much further than Binotto’s comments, the timing and content of his remarks remain significant.

Yet again Ferrari is refusing to bend the knee easily. Its current stance is inspired by competitive, sporting and business motivations.

Ferrari has repeatedly stated the significance of the employment consequences that would come with reducing its spending to a third, maybe even less, of current levels.

“One should not forget that companies play a role in the social fabric of a nation,” said Binotto.

“They are not just there to make a profit.”

Mattia Binotto

It should also be noted that Ferrari’s position is shared by Red Bull, which has also gone on a media offensive.

Red Bull team boss Christian Horner has also highlighted the employment concern, and suggested to Sky last week that the team could lose a third of the staff assigned to its F1 project.

“At Red Bull we are over 900 people to produce the cars that we do,” Horner said.

“Now, if we’re coming down in significant steps to the kind of levels that are being talked about, that could be 300-350 people that we’re talking about.

“The same with Ferrari, probably more, and probably even more at Mercedes.”

Horner’s self-confessed “extreme” solution is for smaller teams to purchase cars from bigger teams if they are truly struggling financially in the short-term.

This appears to be gaining traction and could become the Ferrari/Red Bull option of choice, given Binotto has supported that suggestion.

Sebastian Vettel Ferrari Alex Albon Red Bull Brazilian Grand Prix 2019 Interlagos

He compared it to MotoGP’s use of so-called satellite teams, suggesting he would prefer that to limiting spending so severely that “we run the risk of reducing the level considerably, bringing it ever closer to the lower formulae”.

“If the current emergency really put the existence of some of our competitors in this sport in doubt and made it necessary to revise certain cornerstones, then Ferrari would be open to it,” said Binotto.

“It’s not even sacrilegious, given it’s happened before in F1 and happens today in series such as MotoGP.”

How seriously F1 takes Binotto’s comments may well depends on what it views to be a compromise.

Ferrari would argue that slashing over $30m from an already-agreed budget сap would represent significant flexibility on its part, and that its problem is going any lower than that.

Its opponents would likely respond that Ferrari is just trying to split F1 neatly into manufacturers and customers, either through a two-tier budget cap that grants constructors a greater budget or by approving the return of full-on customer cars.

Ferrari says it may have to race elsewhere if F1 goes too far when it doesn’t have to, costing the championship its monopoly of Ferrari at the highest level.

McLaren fears teams will go bust if F1 does not go far enough and that change will have a good competitive consequence too.

Unless either side relents, F1 and the FIA will have to call someone’s bluff – assuming, of course, that either is actually bluffing.

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