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Motorsport Week

Formula 1 set for $175m cost cap from 2021

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6 years ago
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A cost cap has long been discussed in Formula 1, and on every occasion it has failed to come to fruition, but a new push for a cap to be imposed for 2021 looks set to go through with the agreement of a far more relaxed budget than initially intended.

A figure of $175 million (£137m, €154m) has been put forward following lengthy negotiations with the teams, and arguably given the size of the budget, it's clear the big teams have got their way with initial plans for a sliding scale scrapped.

Initially it had been proposed to start at $200m, reducing to $150m over a period of five years, but the $175m figure will remain stable from 2021 through 2025 – in fact there is reportedly a provision for it to increase with inflation.

The cost cap won't encompass everything, with driver salaries, marketing, travel and engine costs excluded. The figure is therefore much closer to current top team budgets, which range from $250-300m for Mercedes, Ferrari and Red Bull.

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Renault team boss Cyril Abiteboul fears it doesn't go far enough: "This is not a fresh start. The plan was that all teams should be profitable," he is quoted as saying by Auto Motor und Sport.

"The cap does not work for the private teams. A small team may expect $100 million from the Liberty prize pot in the future, but it would then have to find sponsors for 150 million to generate a profit. Many will not succeed in that."

The cap will be administered by approved accountants with a plan for a dry run in 2020, with the teams forced to open their financial accounts for examination to allow the process to be tested before it becomes written into the rules for 2021.

It's reported that hefty penalties could be handed out for overspending, including exclusion from the championship, fines, the loss of championship points or even team bosses losing the right to work in FIA sanctioned events.

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