The debate seems cynical in the face of the current wave of inflation, in which many people can hardly afford energy and basic goods, in Formula 1, which is worth millions.
Nevertheless, the “king class” has imposed a financial corset in the form of a budget limit in an attempt to shrink its own costs.
141.2 million US dollars – the teams are not allowed to spend more in the 2022 season, excluding some expenses.
But against a backdrop of inflation, that tightened belt threatens to burst with a bang weeks before the halfway point in the season.
Some teams are already up to their necks in water. On the current course it could happen that some participants can no longer afford the last races.
However, unanimity among the teams is required to adjust the budget limit.
It’s far away. Because some racing teams are still within the limits and have no interest in seeing their healthier management punished.
The next ordeal is rolling towards Formula 1.
Transport costs are skyrocketing
Formula 1 should become more economical, take a big step towards equal opportunities and become more attractive for newcomers.
With this goal in mind, the “Budget Cap” was introduced, which should even enable profitable participation in the world’s most prominent racing series in the future.
The last promise should bear fruit in the medium term, as the high number of people interested in getting started shows.
However, not much has changed in terms of money management at the top, because the top teams in particular are crying out for help. Development budgets have already been stretched to the limit in the fight for leadership in the World Cup.
Because only a few cost items are excluded from the limit, which is also expected to decrease continuously in the coming years. Including salaries of drivers and individual employees, marketing expenses and the like.
Everything to do with the cars, their development and, above all, transport to the races must be covered by the 141.2 million.
Especially since the actual limit is 140m and is increased by 1.2m for every race in excess of a 21-run calendar.
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The transport and raw material costs in particular are currently causing headaches. Before the energy price crisis, transport costs rose by up to 80 percent, according to Red Bull motorsport consultant Helmut Marko.
However, the budget plans were drawn up before the season. And cannot absorb such increases.
Horner: “Please no Formula 1 accountants”
The pandemic, Russia’s invasion of Ukraine with all its consequences and the current inflation were all unforeseeable events that make the narrow framework overly ambitious.
Red Bull team boss Christian Horner already calculated in Barcelona that up to seven teams could not afford the season and would have to skip the last four races in order to stay within the 141.2 million.
The Brit appealed not to let Formula 1 become an accounting championship: “Because soon we will need more people in our finance department than in our development department.”
Wolff sees “force majeure”
In addition to Red Bull, Ferrari, Mercedes and McLaren are particularly affected and are already well over the cover. Horner’s counterparts in these teams also confirmed this.
For Toto Wolff, the budget limit was introduced with the idea of giving small teams a similar budget to the big ones – and not for having to fight for survival.
“But we are facing an extraordinary situation. And that must be taken into account. It is a matter of force majeure that nobody could have foreseen,” said the Viennese.
Mattia Binotto seemed almost at a loss: “I think there is no way for us to stay below the limit.”
Four teams want nothing to do with it
But four teams are fiercely opposed to an increase: Alfa Romeo, Alpine, Haas and Williams.
While Haas boss Günter Steiner joked in his unmistakable way with a serious background that his team could not raise any more money anyway, Alpine team boss Otmar Szafnauer and Alfa manager Frederic Vasseur are very offensive in their opposition efforts.
According to Szafnauer, all teams would prepare their budgets at the same time towards the end of the previous year. The French would have found and calculated a high rate of inflation. Just like all development work.
“Where there’s a will, there’s a way. We’ve defined a budget limit and should stick to it. If we can do it, the others can too,” Szafnauer appealed curtly.
“We need clarity. And we need it fast. Because it’s not right to be taken hostage by a few teams that don’t manage as effectively – because that was never the intention of the budget limit.”
Competitor Vasseur calls on the top teams to simply shut down their wind tunnels and build fewer new parts: “We are in this situation and will have to stop developing at some point. But I think everyone else can do the same.”
For him, inflation is not a matter of “force majeure” that came unforeseeably.
What happens when it is exceeded?
In the absence of a precedent, it is also unclear what the consequences are for the teams if the budget limit is exceeded.
On paper, an excess of up to five percent is permitted, although there are already penalties for this: the deduction of World Championship points, fines, reduction of wind tunnel times or a further reduction of the upper limit in the following year.
If the five percent are not met, the ultima ratio is even a complete exclusion from the World Cup.
Talks among the teams to find a common solution have been going on for a few weeks. However, no agreement seems to be in sight. As in the case of “porpoising” (read HERE>>>), the FIA could call for order from above.
However, the question of the budget limit is by no means a matter of security, which is why finding a solution is becoming much more difficult. A World Championship final à la USA 2005, when only six cars started, will hardly be in the interests of all those involved.
The next “World Council” of the FIA is scheduled for the second weekend in July, when Formula 1 is making a guest appearance in Spielberg.
If no progress is then made on the issue, an uncomfortable summer threatens for some teams. Not only because, along with the wind tunnels, the air conditioning systems in the factories would also have to remain turned off for cost reasons.