Saturday, July 4, 2020

FIA approves F1’s cost-saving package and budget cap reduction

F1

(Reuters File Photo)

LONDON: Formula One’s governing body hailed a major step forward last night after approving a package of cost-cutting measures including a $145million budget cap from next year.

The measures, rubber-stamped by the FIA’s World Motor Sport Council by an online vote, aim to create a more level playing field for the 10 teams and a more sustainable future.

“Formula One wins today. This is a crucially important moment for our sport,” said McLaren Racing chief executive Zak Brown, who had pushed for an even tighter budget restriction, in a statement.

“F1 has been financially unsustainable for some time, and inaction would have risked the future of F1 and its participants.”

FIA president Jean Todt thanked the teams and hailed “a major step forward for F1 and motor sport’s sustainability”.

The budget cap will be reduced to $140m for 2022 and $135m for 2023-2025, based on a 21-race season, the FIA said in a statement.

Some top teams spend well over $200m a year at present.

A list of components will be frozen between 2020 and 2021, including the chassis and gearbox, and there will also be a further reduction in aerodynamic testing.

This will be according to championship position, with more restrictions for the more successful teams in a development handicap system.

“A uniform budget cap, in concert with more even distribution of revenue among the teams, will ensure greater competition and more people wanting to watch live and on TV, driving more sustained revenues,” said Brown.