Many people in the sport believe the multi billion dollar spend by Mercedes in preparation for the hybrid era ruined the sport for almost a decade. The team with over 3,000 employees in Brackley and Brixton has dominated the constructors championship by winning the last 8 straight titles. So in 2021 the budget cap was introduced in an attempt to level up the playing field and produced more competitive racing.
The spending limit which excluded notably driver wages was set to $175m though due to the pressure of Covid the bigger teams agreed to reduce this to $145m and in 2023 it is set to fall by another $5m.
Yet at the last meeting of the F1 commission the teams responded to Liberty media’s proposal to increase the number of sprint races in 2023 by requesting more budget. The amount is believed to be $5m for each new event.
Another budget cap storm was brewing in the paddock at the Spanish GP. The bigger teams are complaining that soaring inflation means the budget cap should be adjusted upwards.
Christian Horner rather dramatically suggested, “Seven of the teams would probably need to miss the last four races to come within the cap this year.
“It’s not just about the big teams. It’s teams in the middle of the field who are really struggling with inflationary issues.”
“The FIA has a duty of care. I know they are taking it seriously,” added the boss from Milton Keynes. “Energy bills, costs of living, costs are going exponentially, and F1 is not exempt. Freight has quadrupled and that’s not something we can
Szafnauer smiled when he was told that Horner talked about teams missing races:
"That would be really good. That would move us up in the championship. I welcome that. Should we plan for that? Or was he just being facetious?"
Alpine, Haas & Alfa against adjusting the budget cap. https://t.co/jTWiWaz0c6
— Tobi Grüner 🏁 (@tgruener) May 23, 2022
Yet Haas, Williams, Alfa Romeo and Alpine voted against an inflationary proposal the last times the teams met.
Alpine team boss Otmar Szafnauer said: “We’ve set our budgets early, we kind of anticipated a little bit of the inflation. Inflation didn’t just creep up on us. If we can do it, for sure others can do it too. I’m not for just increasing the cap.”
Szafnauer argues all the teams need to do is trim this years development spend.
“When freight costs go up by 2.5m or 3.5m but your development budget is 20m, can you not make your development budget 17m and still be under the cap? You can.
“What that then does is it limits your development. So it’s a lot easier, if you have the money, to go to the FIA and lobby to raise the cap and keep your development budget the same.”
Ironically the Alpine boss had suggested the FIA should consider allowing the teams a spare third car (T-car) at each event following Ocon’s crash in Miami where the team did not have enough time to repair his Alpine for qualifying.
Surely carting another 10 cars around the planet is going to cost a pretty packet.
F1 writer Dieter Renken reckons hundreds of people may need to be laid off across the teams
The argument presented is one around fixed costs.
The bigger teams have bigger costs which are fixed and they are committed to. So in fact their development budgets would be squeezed more than the smaller teams – some of whom don’t have the resources to even spend up to the cap.
Yet if the majority of teams end up breaching the budget cap, having a cap becomes pointless.
There are sanctions for breaching the budget cap which can include being excluded from the championship.
However, if the cap is increased so the gap between the lowest and highest spenders becomes in additional 80-100% then the intention of levelling the playing field will have failed.