Formula 1

Current Business Model in Formula 1 ‘Does not Favour the Smaller Teams’ – Gene Haas

2 Mins read
Credit: Octane Photographic Ltd

Gene Haas remains critical of the business model that currently presides in Formula 1 which he feels is detrimental to the smaller teams on the grid.

Haas, the Team Owner of the Haas F1 Team, has threatened to pull his team out of the sport at the end of the 2020 season if results do not pick up after a poor 2019 campaign, but he feels the current business model favours the bigger teams, with seventy per cent of the money going to the top three teams on the grid.

This leaves thirty per cent to be split between the remaining seven teams, which includes Haas, and despite a budget cap of $175 million coming in for 2021, Haas does not see his own costs coming down any time soon.

“The business model does not favour the smaller teams,” said Haas to  “As everybody knows with the way the money has been distributed 70 percent of it goes to the top three teams and 30 percent of it goes to the other seven teams. It’s not a good economic model.

“At least in our condition, you’re only paid about a third of what it actually costs to run a team in Formula 1. So, from a business model it doesn’t do that well.

“Obviously, every team has a different nature as to why they do it. Some of it is primary sponsorship. Ferrari is that they’ve been doing it for 60 years.

“But they take home enough money to actually make the $175 million cap, but a lot of the other teams operate on a quarter of that. So, how can you really run a race team with that kind of disparity?”

Presence in Formula 1 has Given Haas Recognition in Europe and Asia

Haas says the stint within Formula 1 has been beneficial to the Haas brand, particularly in the European and Asian markets, but the 2021 rules overhaul threatens their presence on the grid due to the costs they are likely to occur developing a new car to fit those new regulations.

“It’s helped quite a bit,” Haas said. “It gave us a lot of recognition in the European market and also a lot of the Asian markets.  We’ve brought a lot of customers to the races. It’s all worked out well.

“But with the new regulations coming in 2021, the big question is how much is that going to cost?  There’s so much change going on in Formula 1, you really have to ask yourself is it really going to be worth the expense to try to implement all these changes? I know everyone thinks the changes are good, but – boy – they’re expensive.

“It’s similar to what is going on here [in NASCAR]. The Gen 7 is a real departure from what (NASCAR) has done in the past. It’s like anything else, they’ve changed so many aspects of the car, you just know there’s going to be a lot of troubleshooting to get it right. It’s difficult for the teams.

“These changes that they implement, I think they do it with the best of intentions but when you are on the other side of the equation trying to implement them, economically it’s extremely difficult.”

Developing the 2021 cars will be expensive to do, according to Gene Haas – Credit: Octane Photographic Ltd
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Thirty-something motorsport fanatic, covering Formula 1, Formula Renault 2.0 and Formula 3. Feel free to give him a follow on Twitter at @Paul11MSport.
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