Cap in hand

Although F1’s sporting and technical regulations were largely rolled over from the 2020 ‘Covid’ season (around 60 per cent of the cars was carried over, although some of minor changes such as to floors and wings caused headaches) for practical and financial reasons, in 2021 F1 teams grappled with another variable, namely financial regulations – ‘budget caps’ in popular parlance – that were introduced after a protracted gestation.

Under consideration even before Liberty Media gained control of F1’s rights in 2017, the budget cap restricts spend in performance-critical areas and is intended to level the playing field. Three main areas are targeted: car design and development, component manufacture, and testing and race operations. Spend in these areas was restricted to $145m (approx. £107m / €128m) in 2021, reducing by $5m (approx. £3.7m / €4.4m) per annum in 2022 and ’23.

Ahead of the 2022 season, McLaren Racing CEO, Zak Brown, welcomed the reduction and glidepath. ‘With the spending limit reducing to $140m this year and $135m next, the new financial regulations present us – and the sport as a whole – with a fairer framework to compete by reducing the inevitable advantage of the biggest spending and best resourced teams,’ he said.

Exclusions to the cap are power units (at present), marketing / hospitality and team travel – to prevent cutbacks on standards of accommodation and flight classes – and car demonstrations and heritage (museum) operations. Crucially, despite drivers being major performance differentiators, their wages are also (currently) excluded from the cap, enabling better funded teams to gain distinct advantages in this quarter.

Equally, the top three salaries paid to team personnel are excluded, enabling wealthier outfits to recruit and retain top designers or strategists