The Formula 1 It is one of the most expensive sporting events and the one that requires the most financial resources for its operation. Over time, the goal has been to reduce the cost of the equipment to make it more sustainable. Thus it was born budget ceiling.
A spending cap that, obviously, Red Bull and Aston Martin exceeded 2021, as announced by the FIA.
The Austrian team committed a procedural breach and a slight overrun of the set budget, while the British team only committed a procedural breach.
But, what is the budget cap? Here are the answers to the main questions about Formula 1’s spending cap.
What is Formula 1’s budget cap?
In the 2021 season, a new financial regulation was activated which included a spending limit applies to Formula 1 teams.
The purpose of this standard was to reduce the differences between the largest groups and those with less purchasing power.
Nonetheless, this limit is not comparable to that of other competitions such as the NBA, since it does not depend on the revenue of the category but on the cash available to the teams.
How much money is the Formula 1 budget cap?
In the first season implemented (2021), the budget limit was 145 million dollars.
An amount that did not include the cost of engines, driver salaries or the marketing department, with the main focus on the sports and technology sector.
For 2022 the amount was reduced to 140 million dollars and it is expected that 2023 to reduce another 5 million, remains at 135.
What are the penalties for exceeding the Formula 1 budget cap?
The FIA considers different cases and situations in which a team could be penalized for breaching the budget limit, ranging from minor to more severe cases.
These are the cases:
- Fines specified in specific cases.
- Suspension of team participation in Grand Prix.
- Future limitations in aerodynamic testing (wind tunnel).
- Budget reduction for the season after a team is sanctioned. That is, if someone is punished in 2022, the punishment applies to 2023.
- Reduction of drivers’ or manufacturers’ championship points from the season in which effect.
