Budget cap, not prize money, the focus of key F1 meeting

The FIA, the sport's commercial rights holders F1 Group/Liberty, plus teams, will gather tomorrow to discuss the latest ideas about an overhaul of the sport beyond 2020.

As well as the six team members of the Strategy Group – Mercedes, McLaren, Ferrari, Red Bull, Williams and Force India – the other four outfits will be present at the meeting in an observing role.

While a meeting with the FIA and F1 last week focused on engine proposals, which ultimately drew criticism from three of the current manufacturers, this week's gathering will start discussing a much deeper overhaul of grand prix racing that will be aimed at making it more competitive.

There had been some suggestions that one of the starting points for these talks would be a change to the prize money structure, which is set to eradicate the bonus system that favours the biggest teams and gives them a huge financial advantage over smaller outfits.

However, sources with good knowledge of the situation have revealed that the prize money issue has not been tabled for discussion, and instead the focus of the meeting will instead revolve around plans for a budget cap.

Liberty is believed to be determined to bring in some form of cost limit for F1 teams, and it will outline its ideas for this cap.

It hopes that there can be constructive dialogue to begin work on a framework plan, as well as reach consensus on how the spending limits can be controlled so that it becomes effective in bringing down spending.

Only once the budget cap idea has become more solid are talks about new commercial rights income deals then likely to start moving forward.

Individual talks

It is understood that the decision to omit the prize money structure talks comes because the issue of commercial rights income is one that does not involve the FIA, and instead is a private matter between F1 chiefs and the teams.

During the last round of talks, commercial arrangements were discussed individually between teams and Bernie Ecclestone, with a number of bilateral agreements put in place to cover the period until 2020.

It is possible that such a system will be adopted this time around too, with discussions taking place in private to push matters forward, rather than requiring a global dialogue involving all teams.

The prize money structure, which will likely spread the income more evenly between teams, is viewed as one of the most important elements for teams regarding their long-term vision.

Amid criticisms about the engine proposals last week, Renault F1 managing director Cyril Abiteboul said it was important that teams understood a global vision from Liberty, including cost caps, prize money and rule changes.

"If we were to save massively on the chassis or we were to have much more favourable commercial deals with FOM, everything is possible," he said when asked about a potential cost increase from designing new engines.

"But it is very difficult to accept to commit to such a large new investment and writing off existing investment without indications on the other parameters."

Ferrari threat

The Strategy Group meeting comes after a controversial week for Liberty when engine proposals put forward for 2021 did not receive support from current manufacturers.

Mercedes and Renault spoke out amid fears of a dramatic increase in costs prompted by the new concept, while Ferrari went further and suggested they could be grounds for it to quit F1 completely after 2020.

While Ferrari's threat, which president Sergio Marchionne declared in a call with investors last week, has been viewed as sabre rattling in many quarters, former F1 supremo Bernie Ecclestone believed his comments should be taken seriously.

"If they can't win, they will put forward new regulations," Ecclestone told The Independent about Ferrari's stance. "If the regulations come out where Ferrari think it is going to be a struggle and they can't support the money then they will leave."

Ecclestone also suggested that the push for a budget cap in F1 would also not receive support from the bigger teams, who know that much of their advantage comes from having more money.

"They don't want budget caps and all that," added Ecclestone. "They want to spend what they can afford to spend and I've always said the same thing. If people can't spend they have to go.

"If there are then only three or four teams something would have to be done but until that actually happens nobody is going to do anything. All the teams that say they can't afford it shouldn't put an entry in."

Christian Horner, Red Bull Racing Team Principal, Robert Fearnley, Sahara Force India F1 Team Deputy Team Principal, Paddy Lowe, Williams Shareholder and Technical Director, Toto Wolff, Mercedes AMG F1 Director of Motorsport and Maurizio Arrivabene, Ferrari Team Principal in Team Principals meeting

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