Liberty Media Eyes €150 Million Budget Cap for Formula One
One of the challenges Formula One has faced over the last decade has been to reduce the cost of competing in the sport. With some teams spending upward of €400 million each year to grab as many championship points as they can, while others spend less than a third of that, it has proven to be difficult to make a profit while competing in F1 and even more difficult to join the sport and challenge the big teams.
According to Germany’s Sport Bild, Liberty Media—F1’s new owners—is looking to introduce a budget cap of €150 million per team from 2021 to complement the cheaper engine rules. This would be supplemented by an additional €50 million to spend on drivers, marketing, and hospitality.
Smaller teams such as Force India and Haas F1 have made positive remarks about the idea. “That number would actually be an increase for us,” said Gene Haas. “I think the bigger problem is the bigger teams.”
It’s not just that teams like Mercedes, Ferrari, or Red Bull would be unwilling to relinquish the vast advantage provided by their considerably larger checkbooks: at those teams, the staff count often exceeds the 1,000 mark. The biggest impact of a budget cut would be the loss of hundreds of jobs. “That’s where the new owners are going to run into some big obstacles,” Haas said. “You just can’t change it overnight.”
Slowly progressing toward a lower budget cap in 2021 could help ease this, but there yet remain many issues. It isn’t the first time budget caps have been suggested for Formula One, and always the idea has met significant pushback, to the point that teams like Red Bull threatened quitting the sport. One argument is that teams would always find a way to circumvent the budget caps by spending their money in unchecked ways, thus making budget caps somewhat pointless.
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