What is it and how does it work?

There are some sports that don’t require a dime to play. Running, swimming and wrestling come to mind. Motorsport, especially Formula 1, has always been their antithesis. Due to its nature, a large amount of money is required just to realize one Grand Prix. Most of the drivers come from wealthy (or well-connected) families, without which they would never have gotten into motorsport in the first place. The cars themselves represent the pinnacle of automotive technology and are backed by brands passionate about showing that their cars are the best. And let me tell you, it’s a battle that can’t be won with a little force.

Yet, as every average household on the planet now understands, a small sacrifice can result in a lot of savings. Regulations can tighten their belts, although it’s not taken for granted. And while such rules only came into his F1 much later than many other sports and other motorsport his category, they are now a big part of even the pinnacle of the game. occupies

What is the F1 cost cap?

F1’s cost cap limits how much a team can spend on a car in a given calendar year. It will first come into force in 2021. The original plan, laid out before the pandemic hit, was to cap spending at $175 million. But that was cut to his $145 million when COVID-19 wreaked havoc on his 2020 season, leaving some teams in desperate financial straits. The plan was to cut another $5 million each season in 2022 and 2023, after which it would only adjust for inflation. But thanks to rampant price increases that hit the global economy in 2022, those adjustments are already starting to apply.

Why does F1 have a cost cap?

Some teams have huge budgets, while others manage relatively modest amounts. This tends to correlate with performance on the circuit, making it almost impossible for the ‘underdog’ team to catch up in terms of speed. The cost cap is a long-standing attempt primarily to level the playing field, but also to ensure that enough teams survive to make up the grid. It’s also a step in the right direction for the image of sport, which many see as a sinful waste in a world where sports are being played.

What does the F1 cost cap include?

All spending related to car performance, not the engine, is related to the cost cap. Also this:

• All parts of the car (from steering wheel to wheel nut)
• Everything you need to run your car
• most of the team staff
• garage equipment
• spare
• transportation cost
• everything in between

The biggest focus is the development cost of the car, what does the team develop, how much does each part that is produced cost, how many of the parts are needed and what extra costs We will consider whether you can purchase without spending.

What is not included in the F1 cost cap?

There are some expensive things that the cost cap doesn’t cover.

• driver salary
• Wages of the top 3 highest paid employees
• travel expenses
• marketing expenses
• PROPERTY AND LEGAL COSTS
• Admission and license fees
• Any activity other than F1 or road car
• Paid Parental and Sick Leave
• Employee Bonuses and Employee Medical Benefits

Engines are more complex as some teams build their own and others buy them, but they are subject to their own set of cost regulations.

Singapore Grand Prix start

Photo credit: Steve Etherington / motorsport images

What are the penalties for violating F1’s cost cap?

Beyond the procedural misdemeanors involved in reporting, there is a clear line for violating cost caps: exceeding a set amount by 5%. Under that number, it’s officially defined as “minor overspending.”

Beyond that, the team falls into “substantial waste” territory. However, the sand on both sides of the line is pretty blurry in terms of potential penalties.

Spending is a complex area of ​​regulation when it comes to details, so the rules are purposefully crafted with case-by-case penalties in mind.

As such, the wide range of possible penalties for both minor and major rule violations are similar, including deductions from the 2021 season, exclusion from racing, fines and restrictions on wind tunnel testing.

But there is one important difference. Spending more than 5% can get you kicked out of the entire World Championship.

Who decides the penalties for violating F1’s cost cap?

Penalties are awarded by the Cost Cap Arbitration Panel, a group of six judges proposed by the FIA ​​and teams.

Austrian GP start

Photo credit: Andy Horn / motorsport images