The capped budget was introduced to limit spending by the teams with the largest budgets in order to reduce the performance gap between the leading teams and those at the bottom of the standings. In 2023, it is the first time that all teams were able to compete on almost equal terms since they all reached the capped budget.
A Formula 1 team is composed of several structures. Racing teams, engineers, marketers, security personnel, logistics. The capped budget only concerns what is related to the performance of the car. Marketing, for example, or the accountant is not part of this budget. Verified by an independent firm mandated by the International Automobile Federation, this budget, if exceeded, can lead to heavy sanctions. Red Bull and Aston Martin had heavily paid for exceeding the budget in 2021.
In 2023, the capped budget, according to our estimates, was approximately 153 million dollars, or 143 million euros. In 2024, with the same number of Grand Prix as in 2023 but also the same number of sprint races, the budget is therefore calculated in the same way with one exception.
A budget indexed to inflation since 2020
Every year, the F1 financial regulations consider the inflation of the G7 member countries as an indexing basis to increase the budget cap.
Thus, with 4.7% inflation for G7 member countries in 2023, the 2024 financial budget will increase by 7.4 million dollars this year, reaching a total of 165.5 million dollars, or 150 million euros. Starting from 135 million dollars, the budget has grown by nearly 30 million dollars over four seasons.
What is the budget per Formula 1 race?
In 2022 and 2023, each race beyond 21 on the calendar was allocated an additional 1.2 million dollars within the budget limits. It is now 1.8 million dollars to consider, in addition to a general allowance of 135 million dollars for the first 21 Grand Prix races.
In 2024, with 6 sprint races, the FIA, along with the teams, has decided to allocate an additional budget of $300,000 per race, totaling an extra $1.8 million.
If we average out the 24 Grand Prix with their sprint, each Grand Prix weekend has a budget of 6.9 million dollars, or approximately 6.45 million euros.
The details of the capped F1 budget in 2024
21 races: $135,000,000
+3 courses: $5,400,000
+6 sprint: $1,800,000
+3.1% (2021): $4,352,400
+8% (2022): $11,580,192
+4.7% (2023): $7,432,231
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TOTAL: $165,564,823
