In Monte Carlo, the focus automatically falls on the money. Expensive cars do not only drive on the race track here. And the fleet of vehicles at the port in the water is just as impressive as those on land in the pit lane – and probably also in some private garages. So it fits quite well that around the Monaco Grand Prix there was a lot of talk about finances, more precisely about the annual budget of the racing teams. A few days ago around the race in Barcelona, Red Bull team boss Christian Horner had designed a scenario that would not please anyone in Formula 1. At least if it would happen.
According to the Englishman, seven of the ten racing teams would probably miss the last four races in order not to exceed the financial ceiling. He listed: “Energy bills, the cost of living and costs in general are increasing exponentially, and Formula 1 is no exception.” The costs for the transport alone would have quadrupled for the 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 midfield that are really struggling with inflation.”
“Six percent inflation is really a lot of pressure on our shoulders,” said Ferrari team boss Mattia Binotto
Gone are the days when teams could freely invest in Formula 1. Liberty Media, owner of the motorsport premier class, is guided by the salary cap that is common in US sports: In order to make the competition more balanced, a limit was set for the teams. This is to prevent the available sums and thus the performance between the Ferrari, Mercedes and Red Bull and the rest of the field from further diverging significantly.
Last year this limit was 145 million US dollars, this year it is 140 (about 130 million euros), next season it should drop to 135, always excluding some cost factors such as driver salaries. This season, the cars, which have been heavily revised in the face of new regulations, will be continuously further developed in order to solve some unexpected problems – such as the hopping caused by changed aerodynamics. That costs money, some teams have more, others less. The reactions in Monaco to Horner’s proposal were correspondingly different.
Would like more financial leeway: Team bosses Christian Horner (Red Bull, left) and Mattia Binotto (Ferrari).
(Foto: Eric Alonso/Getty Images)
“Six percent inflation is really a lot of pressure on our shoulders,” said Ferrari team boss Mattia Binotto. Teams could have prepared for a budget cut and a brand new car, but not for inflation that high. “I’m pretty sure all of us will hit the cap very soon. It would really be a shame if a sport like Formula 1 ended up being dictated by its budget cap. It has to remain a sporting and technical challenge.” On Saturday, Horner called for clarity from the world automotive association Fia and from Formula 1 management, and quickly. The principle is correct: “I think the application is difficult, we are seeing and experiencing that right now. There are a lot of things that need to be clarified.”
Alpine, Alfa Romeo, Haas and Williams voted against adjusting the budget ceiling for inflation
So should the limit be raised because of the unexpectedly high costs? Or would that not call into question the point of an upper limit? Or would it only be questioned when teams exceed 130 million euros? In accordance with the rules, they are allowed to do so by up to five percent at the price of “minor sanctions”, about which nothing concrete is known yet. Shutting down or stopping development for this reason would go against the spirit of competition. It’s true that only a few teams are fighting for the title, but for all of them it’s about a lot of money that is linked to the number of points.
Alpine, Alfa Romeo, Haas and Williams voted against adjusting the budget ceiling for inflation. “We jointly decided on the budget cap, so we should stand by it,” said Alpine team boss Otmar Szafnauer. His Alfa Romeo colleague Frédéric Vasseur recommended turning off the wind tunnel as a solution to increased energy or freight costs. For Günther Steiner, everything is just a question of cost management. “As a businessman, you just have to make it by the end of the year,” said the Haas team boss, where Mick Schumacher drives. The positive effect of the upper limit is already evident, the gap between the teams will continue to narrow if Formula 1 does not deviate from the actual plan. In addition, the matter is like this: “Our problem is not the budget ceiling. Our problem is the budget.”
