Budget caps for F1 in 2010

Posted on | Author Keith Collantine

F1 teams will be allowed to run to different technical regulations if they agree to limit their budgets to ??30m (??33m / $42m) under new rules put forward by the World Motor Sports Council today.

According to the FIA:

This figure will cover all expenditure of any kind. Anything subsidised or supplied free will be deemed to have cost its full commercial value and rigorous auditing procedures will apply.

FIA president Max Mosley has argued in favour of budget caps several times in the past but there have always been doubts over whether they could be enforced. The FIA is not allowed to handle commercial matters to do with F1, so how can it involve itself in inspecting the team?s finances?

This ??two-tier? solution where teams volunteer their financial information in exchange for being able to run to more liberal technical regulations may resolve that problem. But it does not completely convince me that budget capping will work. For example, what if a company announces it wishes to compete in F1 in 2011, having already spent ??200m on research and development in 2010?

And it doesn?t take a great cynic to question the FIA?s ability to carry out this rigorous auditing while maintaining the full confidence of the teams. Consider first how many complaints there have been about legitimate interpretations of the technical regulations in recent years.

Mosley?s two-tier solution also creates new problems. The FIA promises to ??adjust elements of these freedoms to ensure that the cost-capped cars have neither an advantage nor a disadvantage when compared to cars running to the existing rules.?? But can there ever be parity between such radically different cars?

Luca di Montezemolo, head of the F1 teams’ association FOTA, voiced his concerns about the plans:

FOTA would like to express its disappointment and concern at the fact that these have been taken in a unilateral manner. The framework of the regulations as defined by the FIA, to be applicable as from 2010, runs the risk of turning on its head the very essence of Formula 1 and the principles that make it one of the most popular and appealing sports.

Given the timeframe and the way in which these modifications were decided upon, we feel it is necessary to study closely the new situation and to do everything, especially in these difficult times, to maintain a stable framework for the regulations without continuous upheaval, that can be perplexing and confusing for car manufacturers, teams, the public and sponsors.

I?m not sold on the budget caps idea either. What do you think?

F1 2010 Season