F1 to have sliding development scale, $145m budget cap from 2021

Formula 1

Formula One’s post-coronavirus future took shape on Thursday after racing’s governing body, the FIA, ratified several unprecedented measures in the technical and financial regulations.

In 2021 F1 will introduce a new sliding scale for aerodynamic development and a $145 million budget cap for all 10 teams, which will be steadily reduced over the next five years. It is hoped that both measures will help close Formula One’s competitive order, while also protecting teams financially in the post-coronavirus world.

The sliding scale will ensure the lower a team finishes in the championship, the more wind tunnel and CFD development time it will be permitted the following year. The concept is modeled loosely on a draft-style system in U.S. sports.

Teams already face restrictions over the amount of aerodynamic work they can complete at their factories, but from 2021 the restrictions will be biased against the previous year’s championship position on a sliding scale.

The budget cap had already been agreed to in principal but over recent months the initial figure of $175 million was negotiated down to $145 million. That will then be scaled down to $140 million for 2022 and then $135 million between 2023 and 2025.

The budget cap will lead to a trimming down of F1 teams. McLaren has already confirmed it will have to cut jobs in response, while Ferrari is considering entering IndyCar in order to find jobs for those it will inevitably lose from its own F1 team.

McLaren CEO Zak Brown says F1 had to think of the bigger picture.

“Formula One wins today,” Brown said. “This is a crucially important moment for our sport.

“F1 has been financially unsustainable for some time, and inaction would have risked the future of F1 and its participants, who are to be commended for resolving this issue collectively and determinedly.

“A uniform budget cap, in concert with more even distribution of revenue among the teams, will ensure greater competition and more people wanting to watch live and on TV, driving more sustained revenues to underpin the long-term financial health of the teams and the sport. Ultimately the fans win, and if the fans win, the whole sport wins too.”

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