F1 INSIDER
Budget row over sprint races; 2022 silly season
Controversial plans to experiment with a new format at three race weekends this year have hit another snag. Leading teams are now claiming any damage incurred during the 100km Saturday sprint races (to be evaluated at Silverstone, Monza and Interlagos) would threaten their ability to comply with the new budget cap.
Financial pressures related to the Coronavirus pandemic prompted all competitors to agree last year not only to the principle of a budget cap – a notion many of them had previously fought against – but also to a lower figure than the $175million per year originally agreed. This season the cap for each team is $145million plus an additional allowance of $2.4m (the cap is based on there being 21 races, and 23 are on the schedule). The figure is on a glide path to $140m next year and $135m from 2023.
Mercedes, Red Bull and Ferrari have long spent well in excess of these figures and have had to reduce their headcounts by various means, including redeployment of staff to adjacent businesses. They say they are now operating within the cap this season – but only just.
The more recent appearance of the sprint-race format has introduced the possibility of extra costs which weren’t factored into the original discussions about the budget cap. On the three experimental weekends, a qualifying session will be held on Friday to determine the grid for a 100km race on Saturday, which will in turn set the grid for Sunday. Teams have raised the possibility of additional wear and tear on components and the likelihood of damage, since the sprint races are liable to become high-stakes affairs if points and grid positions are involved.
Mercedes and Red Bull have linked participation in sprint races with the likelihood of redundancies, though it is difficult to establish to what extent this is being used as a negotiating tool. GP Racing understands Formula One Management has acknowledged the plan involves extra expense and has offered each team $1m to cover such costs.
“We are really struggling to just come in below the budget cap, and we’re talking about tens of thousands of pounds and not hundreds of thousands,” said Mercedes team principal Toto Wolff. “We haven’t got the margin to go for it [the sprint race format] and then find out that there is an extra half-million pounds or more that we have to find within that budget cap. Because that could mean looking at people again and that’s not where I want to go any more, at all.”
It’s believed that more than one team has declared the $1m
extra allowance insufficient and has demanded three times that. Other teams have resisted the idea of factoring in an extra allowance since it may be too much, and some competitors may therefore be able to exploit it for performance gains. Among the counter-proposals is that any payments should be based on an independent post-race audit of actual damage.
“We accept that cash in for this, that what’s been proposed, doesn’t match cash out at the moment,” said Red Bull team principal Christian Horner. “So effectively it’s an investment by the teams into FOM to say: ‘OK, we support this in the hope that if it works it generates future revenue, future interest, future benefit into the sport in future years.’
“There just has to be a sensible allowance that takes that into account, because we’re chasing £10,000, £20,000, £30,000 savings at the moment to ensure that we’re hitting the budget cap. We’re keen to support it but there needs to be an accommodation.”
One team which has consistently argued for a lower budget cap is Mclaren and it is urging caution on extra payments.
“There are some different proposals on the table,” said CEO Zak Brown. “We just need to make sure that we address that specific issue and that we don’t put a rule in place which creates an opportunity and starts expanding the budget cap we’ve all agreed to. I’m confident we’ll figure that out.”