Formula 1 officials announced Friday that they will increase the budget cap imposed on the parks this year, in the face of rising costs related to inflation.
And the American company Liberty Media, which owns the commercial rights to the first category, and the Fédération Internationale de l’Automobile “FIA” said in a press statement that “after consultations with the Financial Advisory Committee over the past few weeks, the FIA has submitted a proposal to the committee (Formula One) which was approved by the required majority, with the support of From FIA, Formula One and 9 teams (out of 10).”
The debate erupted in Paddock Formula 1 a few weeks ago about whether or not to raise the spending cap in light of inflation?
While the “big teams” Mercedes, Ferrari and Red Bull, which were particularly affected by the introduction of the budget cap system in 2020, have defended the measure, many teams such as Alpine or Alfa Romeo have opposed any change.
Romanian-American Otmar Szafnauer, director of Albin, defended the decision to adopt the budget in May, saying: “If there is a will, there is a way. We have set a budget cap and we must stick to it. “
However, the FIA has decided to raise the budget cap by 3.1% in 2022.
“The proposal recognizes the unexpected increase in costs due to the variance in 2022, taking into account indicators with a limited rate of 3.1% (taking into account the initial inflation threshold of 3% already established in the system ) and taking into account this percentage will be capitalized from 2023,” the statement continued.
It was decided to set maximum spend for teams during the season with the aim of reducing budget differences between large and small teams and improving competition.
The budget cap was also lowered from $145 million (about $142 million at current rates) last year to $140 million this year.
According to a preliminary decision, the budget cap will be 135 million in 2023, which is between two and three times what the Mercedes, Ferrari or Red Bull pilots spent before the law was enacted.