Formula One’s New Budget Cap Could Start As Early As 2019: Report

Formula One’s New Budget Cap Could Start As Early As 2019: Report

Formula One is considering a budget cap to level the playing field among its big-budget and smaller teams, and leaked details obtained by Auto Motor und Sport show exactly how they might do it. F1 wants to start testing out the cap in 2019. Notably, drivers’ and top managers’ salaries and marketing expenditures won’t be limited by the cap.

Photo credit: Felix Roittner/GEPA Pictures via Red Bull Content Pool

The specific amount of the budget cap is still to be determined, although Auto Motor und Sport cites €100 to 150 million ($151-227 million) as a possible amount, despite top teams pushing for €200 million ($304 million) at the least.

There won’t be any specific limits set on the numbers of staff hired or parts produced for cars, but it will be a fixed amount of money to spend for the season. This is a relief for larger teams, who were worried about employee limits forcing them to scale back their efforts exponentially.

Each team will get assigned an independent accountant based at their factory from the F1’s governing body, the Fédération Internationale de l’Automobile, to keep track of their expenditures, who will be paid by the FIA, not the teams. Smaller teams have also been worried about large factory efforts like Mercedes burying F1 development costs on their road-car side, but an independent bookkeeper should alleviate some of those fears.

The 2019 test run for the budget cap won’t penalise teams for exceeding the budget limits if they go over. But it will provide some feedback as to whether the cap is realistic, or if it needs to be tweaked.

The FIA is expected to submit this proposal to teams on Tuesday, Auto Motor und Sport reports. The budget won’t be cold-turkey down to its final amount right away, but rather, introduced incrementally by the series.

Formula One has been split in recent years between smaller teams struggling to stay viable and near-unchecked domination by a handful of well-funded top teams. Thus, new owners Liberty Media have made it a priority to make things more equitable across the grid to give smaller teams a better shot.

Some of these measures aren’t sitting too well with the top teams who’ll have to give up certain privileges and financial advantages in order to keep the sport viable in the long-run. Ferrari, a front-running team who received nearly one fifth of F1’s revenue distributed to teams this year, is notably threatening to quit if their higher-ups aren’t happy with Liberty Media’s new rules, which aim to make things more equal among the teams.

Additionally, some are unhappy about having to open up their books to an FIA accountant for fear of giving too much away about the development of their teams, Auto Motor und Sport notes. Yet teams based in England — which is most of them — already have to submit annual balance sheets to the Companies Register in London, so they don’t have a ton of room to talk on that point. Data from that register is easily accessible for a fee online. [NESN]

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