Why F1's chase for new teams has current grid worried

Since 2017, following the demise of the Manor squad, Formula 1 has had 20 cars on its grid. Questions exist over whether this number needs to rise. For instance, does the championship need new teams simply because that's too small a grid and it should be 22 or 24 cars? Or should Liberty Media be preparing the ground for a new entrant to come in should any of the current competitors drop out?

Those questions have now been given extra focus by confirmation that at least one new F1 team project is being worked on in the background.

French-backed Panthera Team Asia F1 has recruited former Super Aguri, Caterham and Manor engineer Tim Milne as its head of aerodynamics, and since January he's been working on the venture with a small group in a design office at Silverstone.

The previous employers on Milne's CV provide an unfortunate reminder of the recent history of new F1 teams, and how they struggled to find a foothold before folding.

The entities that were originally known as Lotus and Virgin, along with HRT, arrived with high hopes in 2010. They were the winners in a tender process launched by the FIA, and had first to prove that they had solid backing, and a sound business plan. Time would expose the harsh financial reality.

But it's easy to forget now that when those teams first lodged an interest that the FIA - on Max Mosley's watch - had promised financial concessions and other help that made an entry attractive. That all subsequently faded away and they eventually joined the 2010 grid on the same basis as the established entrants, except that they had to earn the right to F1 prize money income.

History is repeating itself in that a future entry is again being enticed on financial terms - thanks to the upcoming cost cap and other efforts to curb spending.

F1 boss Chase Carey has claimed many times that he's had interest from potential new teams. It's no surprise that he should want to make that public - just as with new races, talk of a positive demand/supply trend is good PR.

"Clearly one of the goals in terms of the cost cap is to create a healthier sport," Carey noted last month. "We've talked about the competitive goals, but it is equally important that the cost cap creates a business model that is healthy and growing and positive for our existing teams, and potential new teams coming into it.

"That has been enforced as we've had discussions with potential new teams. All have looked at steps in terms of cost discipline, and probably a more balanced revenue distribution as being cornerstones to creating what they think is an exciting opportunity."

"We have a surprising number of teams that have shown an interest" Ross Brawn

He even hinted that there has been interest from the USA, although in doing so he made a clumsy dig at the American-owned team that F1 already has: "Down the road we're talking to new team entrants, as we firm up the business model for team ownership. We have Haas as a US team, we'd love to add to that with a high profile US team."

It's obviously in F1's interest for Carey to take such a bullish line on the level of interest. But should potential entrants be a little wary after what happened a decade ago? Perhaps this time they should have a little more confidence. Certainly, Mercedes boss Toto Wolff believes that the financial climate will indeed be different.

"The business model for F1 teams is about to change, with the introduction of the cost cap in 2021," he says. "There will be some substantial reductions happening at the top teams and I think the gap in performance is going to decrease.

"Owning an F1 team will not only be a marketing exercise, like it is today, for large OEMs or multinational consumer goods companies, or a trophy investment for an individual. It will become a real business. There will be the opportunity in reducing your losses or even becoming profitable, like any sports team should be. You can see the examples in the US.

"This is about to happen, and it is why I am not surprised that there is interest from potential investors or potential team owners. But I guess that everybody who is in the sport sees that opportunity, sees what is about to happen in 2021 and '22, and I think it's a milestone for F1 that is just about to happen."

At Spa last weekend, Ross Brawn made the intriguing revelation that potential new teams now circling around have been told they will have wait until at least 2022 for entries to open up.

"We have a surprising number of teams that have shown an interest," he told Sky F1. "But what we have said to those teams is 'let's get these rules introduced, let's stabilise the situation'. Let's get everything working properly before we seek more teams.

"With the 10 teams we have, 10 healthy teams in F1 is actually enough. And if we do get any extra teams they have to really add to the show.

"We must learn from history - so many small teams came and went, and didn't really add to F1. We have to stabilise what we're introducing in 2021 and look at whether there is an opportunity for new teams."

Brawn gets to the heart of the matter. An increase to 22 or 24 cars will give fans more to watch and create opportunities for drivers, but the quality must be there. After the demise of the 'Class of 2010', Haas has at least proved it is still possible to come in at a respectable level.

"If it's good teams, strong teams with good backing, sustainable projects - then in my opinion, yes," says Cyril Abiteboul of Renault, who like Mercedes could potentially supply new teams with technology, when asked if more F1 squads would be positive.

The current entrants, while making politically correct positive noises about prospective new competitors, have questions about the potential impact on their slice of F1's income, should the pie be divided into 11 or 12 pieces. That is yet to be resolved.

"We're all aware that entering a F1 team into the world championship is something that should happen on merit," says Wolff. "It needs to be credible. It needs to be founded in the right way, and it needs to be agreed by all the stakeholders, especially ones that will be diluted.

"But I think this is well understood amongst everybody - between Liberty, the FIA and the teams, there is a common objective, and I see it as a positive."

Other teams are also wary about the implications for the income they receive from the F1 organisation.

"If the business was in a very strong way you could imagine that you need less revenue on the one hand, and you can share between 11," says Alfa Romeo's Fred Vasseur. "But it's not the case today, and the business is unsustainable for the majority of the teams, and to share between 11 teams is less attractive than between 10."

"If you want to enter an NFL or NBA team you can't enter the league and say 'I'm playing from tomorrow'. This is the Champions League of motor racing" Toto Wolff

"I think in the future with the cost cap being introduced and implemented then there might be room for 12 teams," says Racing Point's Otmar Szafnauer. "But we do have to be careful to get the money distribution to be a little bit more equitable so you can have 12 sustainable teams."

The bigger question is whether the 10 current teams will all still be around in 2021. The new Concorde agreement is not yet signed, and, as history has shown, boards of directors and wealthy benefactors alike can decide overnight not to continue. Teams have often weathered such storms and emerged with new ownership, but there are no guarantees of survival.

"Twelve teams is a good number, and you never know what's going on with any other team," says Toro Rosso's Franz Tost, cautioning that some current entrants could indeed go. "That means we need as many cars as possible on the starting grid."

The risk of the 2022 new entry delay, as suggested by Brawn, is that should any current team not make it to '21 there won't be anyone to replace it in the short term, and the grid will shrink - and that will be disastrous in a season that F1 simply has to get right.

That situation will be avoided only if the existing teams (and manufacturers) all get what they want from the ongoing negotiations over 2021. Perhaps Liberty should focus more on those who are already involved and spending millions, and less on the tyre kickers. After all, talk is cheap when it comes to would-be F1 team owners.

"The 10 teams are doing a good job, and they are more than committed to the project," says Vasseur. "The first target has to be to keep them alive, and keep them on the grid."

"First of all we must take care that the 10 teams survive," echoes Tost. "It's a compromise regarding the costs, because why are there not more teams in F1? It's simply a cost factor. And now with a cost cap, we can also calculate, and that's important for new investors who want to come into F1.

"Investors are business people, and they want to know 'how much money do I have to invest? And at the end, how much money do I get out?' And currently it's difficult. It's a black hole and you don't get money out, you spend money. It's how it is. But I must say that Chase is pushing very hard. I think he's going in the right direction."

"It would be a good thing to have more teams, as long as they are well funded and high-profile," notes Haas's Gunther Steiner in an unsubtle nod to Carey's earlier comment. "Also, what FOM needs to look after are the teams which are here.

"We shouldn't just try to go and get new teams because new is better. We need to look after the teams that are here that are doing a good job, and made a big investment. Just thinking more is better, that will not work as well."

Wolff perhaps sums up the complex new team situation best: "We should keep it attractive for the ones that are in. Limit the franchises to the current entries, and if you have great racing teams or brands that want to enter, let's sit on the table and see how that functions.

"If you want to enter an NFL or NBA team you can't enter the league and say 'I'm playing from tomorrow'. This is the Champions League of motor racing."