Scuderia Ferrari, and Mercedes, Formula 1’s top teams, all feel they will most likely receive penalties this seaso for exceeding the budget cap limits, as team bosses urge the FIA to take measures as soon as possible in order to avoid an “accounting world championship”.
For the 2022 Formula One championship, a limit of $140m (£119m) has been imposed for all teams, with the goal of reducing costs and also improving competition. However, due to a huge rise in inflation and freight costs has created many difficulties for the teams, who now believe they cannot stay under the expected limits for this campaign.
As a result, Scuderia Ferrari, Red Bull and Mercedes, the sport’s biggest and currently most competitive F1 teams have all urged the FIA to allow an increase to the budget cap because of “force majeure” circumstances.
But not all teams agree with this idea, as Alfa Romeo, Haas and Alpine see no reason to spend more:
“At the time we all agreed to those reductions, nobody could have predicted what was going on in the world and how that is driving inflation in every household globally,” Red Bull team principal Horner said in a recent interview for Sky Sports F1 – “We’re seeing it in Formula 1, we’re seeing it with logistics, we’re seeing it with energy costs. That to me is something the FIA need to take into account. They have the ability through force majeure to apply an inflationary effect because we don’t have enough levers to get down to the cap. I think that’s the same for probably seven of the teams in Formula 1. We’ve still got six months left this year, inflation still looks like it’s rising rather than diminishing, and hopefully the FIA will act shortly.” – he explained.
Scuderia Ferrari Team Principal Mattia Binotto also feels a change is needed for the teams to cope with the increased expenses:
“I think that there will be no way for us to stay below. So, I’m pretty sure that at some stage we will go over. In the regulations, there is a threshold, which is a 5 per cent. If you do not exceed the 5 per cent, on the top of what’s the budget cap threshold, it will be considered a minor breach. And what’s a minor breach in case of force majeure? What will the stewards and the FIA decide on that, in terms of penalties?No idea – but I don’t think there is any way for us – and for many teams – simply to stay within, and even laying-off people, I don’t think that’s a good and right choice.” – the Ferrari boss explained.
Horner also added that Red Bull “were going to end up with more people in our financial department than we have in the drawing office” and added: “What we don’t want to see is that Formula 1 becomes an accounting world championship, rather than a technical or sporting one.”
Mercedes are also siding with their rivals on this matter:
“The cost cap was introduced for specific purposes, to allow the small teams to spend the same amount as the big ones,” explained Toto Wolff. “There shouldn’t be a bargaining every year to lift the cost cap up. But I think we’re facing an exceptional situation in that we have a real inflation that is north of 7 per cent at the moment. Our energy prices in Brackley have tripled, our freight costs have tripled. I think that is something that needs to be considered because we want to avoid any circumstance, reorganising restructuring the big teams again in a way that would be really damaging for us as a team and as an industry. This is a force majeure situation, having a raging war in the Ukraine and the consequences that it had on energy prices is not something anybody could have foreseen. There needs to be some sort of compromise for the teams that are against an inflationary adjustment and the teams that are for it.” – the Mercedes boss explained.
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