In Monte Carlo, the focus is automatically on the money. Expensive cars don’t just drive on the racetrack here. And the fleet of vehicles in the water port is just as impressive as those on land in the pit lane – and perhaps also in some private garages. So it is entirely fitting that there has been a lot of talk about the Monaco Grand Prix about finances, and more specifically about the annual budget for the racing teams. A few days before the race in Barcelona, Red Bull Team Principal Christian Horner devised a scenario that would not please anyone in Formula 1. At least if it did.
According to the Englishman, seven of the ten race teams will likely miss the last four races in order not to exceed the financial ceiling. “Energy bills, living costs and costs in general are increasing exponentially, and Formula 1 is no exception,” he said. Transportation costs alone have quadrupled on 22 dates this year. “And that’s not something we can control.” It’s not just about the big racing teams: “It’s the teams in the midfield that are really struggling with inflation.”
“Six per cent inflation is a huge pressure on our shoulders,” Ferrari team principal Mattia Binotto said.
Gone are the days when teams could freely invest in Formula 1. Liberty Media, owner of the premium car class, is guided by the salary ceiling prevailing in American sports: in order to make the competition more balanced, teams are put to an end. This is to prevent the available sums and thus avoid a large performance gap between Ferrari, Mercedes, Red Bull and the rest of the field.
Last year, that limit was $145 million, this year 140 (about 130 million euros), and next season it should drop to 135, excluding some cost factors such as drivers’ salaries. This season, the cars, which have undergone a major revision in the face of new regulations, will be continuously developed in order to solve some unexpected problems – such as mobility caused by changing aerodynamics. This costs money, some teams have more, others less. Reactions in Monaco to Horner’s proposal were mixed.
“Six per cent inflation is a huge pressure on our shoulders,” Ferrari team principal Mattia Binotto said. The teams could have prepared for a budget cut and a brand new car, but not for high inflation. “I’m sure we will all hit the limit very soon. It would really be a shame for a sport like Formula 1 to end up imposing its budget cap. It has to remain a sporting and technical challenge.” On Saturday, Horner called for clarity from the FIA and from F1 management, and fast. The principle is correct: “I think the implementation is difficult, we are seeing and testing it now. There are a lot of things that need clarifying.”
Alpine, Alfa Romeo, Haas and Williams voted against adjusting the budget ceiling for inflation
Should the ceiling be raised due to unexpectedly high costs? Or does this not call into question the upper bound point? Or will he only be questioned when the difference exceeds 130 million euros? According to the rules, they are allowed to do this up to five percent at the price of “minor penalties”, about which nothing concrete is known so far. Stopping or stopping development for this reason goes against the spirit of competition. It is true that only a few teams fight for the title, but for each of them it comes down to a lot of money related to the number of points.
Alpine, Alfa Romeo, Haas and Williams voted against adjusting the budget ceiling for inflation. “We have jointly decided to set the budget ceiling, so we must stick to it,” said alpine team boss Otmar Szafnauer. His Alfa Romeo colleague Frederic Vasseur recommended closing the wind tunnel as a solution to increasing energy or freight costs. For Gunther Steiner, everything is just a matter of managing costs. “As a businessman, you just have to make it through by the end of the year,” said Haas team boss, where Mick Schumacher leads. The positive effect of the cap is already clear, the gap between the teams will continue to narrow if Formula 1 does not deviate from the actual plan. In addition, it is as follows: “Our problem is not the budget ceiling. Our problem is the budget.”