In an attempt to attract more viewers, Formula 1 is aiming to level out the playing field and increase the competition on the track. With factory-backed teams such as Mercedes and Ferrari dominating the current championship standings, customer-backed teams like Williams and McLaren, amongst others, have called for the introduction of a budget cap to make the competition more even. Owners Liberty Media have announced more details about their plans to reform spending within the sport.
How the plans have changed
Initially, a target had been set for the start of the next regulation cycle in 2021. However, management now hopes to introduce budget caps as early as next season in a series of stages known as a “glide path”, with the full budget being imposed as late as 2023.
The intention was to reach a cap of $150 million. However, current plans aim to enforce a cap of $200 million in 2021, $175 million in 2022, and finally $150 million in 2023.
This should seriously reform spending in Formula 1. However, Mercedes team boss Toto Wolff has voiced concerns about this target being unachievable, despite the fact that not all expenses are covered by the cap. Driver salaries are excluded, and marketing and F1 hospitality like the packages available at https://edgeglobalevents.com/f1-hospitality/ are excluded. However, Claire Williams, Williams Deputy Team Principal, saw the changes as an opportunity to “crack open some champagne”.
It has not yet been decided what sporting penalty will be imposed on those teams that do not abide by the new spending restrictions, and the final details are still being worked out. The basic outline includes cheaper, simpler engines; a cost cap that keeps F1 as the pinnacle of motorsport; a more even revenue distribution; more race-able cars; and a simplified governance structure.
As part of the new proposals, Ferrari still get to keep its extra financial bonus, which was awarded for their historic value to the sport. However, this would be reduced to $40m, which is about 40% lower than their current amount.
The changes might not end up being as drastic as first anticipated, but the customer-backed teams in F1 are definitely anticipating a positive move. The competition looks like it will open up, which is bound to attract more viewers in the long run.