$175m cost cap intended for 2021


For as long as anyone can remember, there have been calls to limit team spending, in a bid to make the sport more attractive to newcomers, ensure the financial stability of existing teams and to level the playing field.

Max Mosley tried and failed, but now, under the sport's new ownership F1's powers that be appear to finally have a plan.

The original intention to introduce a cap of around $200m which would then decrease on a year-by-year basis has been scrapped, and instead it is now intended that from 2021 a $175m limit will be introduced which will remain in place for 5 years.

While the majority of the teams budgets run between $120m - $200m a year, it is thought that Mercedes, Ferrari and Red Bull are spending between $300m and $400m.

Driver salaries, engines and marketing costs are not included in the $175m figure.

Renault boss, Cyril Abiteboul was quick to criticise the figure, claiming that it doesn't go far enough.

"This is not a fresh start," he told Auto Motor und Sport. "The plan was that all teams should be profitable. 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."

One of the big questions in terms of a spending cap has always how it might be effectively policed, and while from 2021 it will be mandatory for teams to have to open their books for forensic scrutiny from the FIA, there will be a 'dry run' next year in order that the process can be trialled without penalty.

Teams exceeding the spending cap once it is introduced in 2021 would face punitive punishment including (ahem) fines, loss of championship points or even team bosses losing their FIA licences and thereby their right to work in the sport.

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Published: 07/06/2019
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