A maximum budget reduced by 30 million dollars starting in 2021
With the looming economic crisis, it is becoming increasingly urgent to reduce costs in F1. This is why the spending cap will be drastically reduced starting next year, a trend that will intensify in the coming years.
If the on-track action is limited to virtual races, behind the scenes, negotiations continue. Obviously, the first priority is to finalize a new calendar for the 2020 season, taking into account technical and logistical constraints to maximize the number of races in the calendar year to meet the demands of television and sponsors.
But the other second part concerns the future. Thus, it is even more essential to establish a budget cap to halt the current spending race. With the introduction of the new Concorde Agreements next year, a revolution is set to take effect with the arrival of a cap on authorized technical expenses. However, the effort will ultimately be even greater than expected, as Ross Brawn confirmed to Sky: « The message is clear: we must reduce costs. Therefore, there will be an additional step to lower the authorized cap. We started with a base of 175 million dollars, for which it was a long battle to reach. With the current crisis, we will eventually start from 145 million dollars, and the goal is clearly to see how to reduce it further in the following years. »
Such a statement is bound to create new waves in the paddock microcosm. The major teams will certainly complain, starting with Ferrari, which has managed to monetize its historic presence at a high price. Earlier this month, yet another episode of “Ferrari is leaving F1” appeared in some media outlets. But this time, the Scuderia made it clear that it did not intend to leave the premier discipline, but that a significant budget cut would force it to invest in other disciplines to cope with the necessary reduction in staff in its F1 department.
The stated objective of Liberty Media is to have a much more balanced field in terms of performance but also to ensure the economic viability of mid-field teams: « The distribution of funds will be much more equitable with the new agreement. Mid-field teams will receive a much larger share. We are going to reduce expenses and improve distribution between teams. A good mid-field team should be able to achieve podiums, or even a victory. It should also be able to make small profits. If we succeed, we will have a bright future. »
With the participation of www.racingbusiness.fr
