Cost cap talks dominate F1 bosses and teams debate

Formula 1 bosses took part in another debate about how to tackle the Coronavirus crisis on Monday, with the 2021 cost cap among the key subjects on the agenda.

Cost cap talks dominate F1 bosses and teams debate

Team principals joined FIA president Jean Todt, and F1's CEO Chase Carey and managing director of motorsports Ross Brawn for a telephone conference which lasted all afternoon. Sources say it was a positive and productive session, but few firm decisions were taken – although Todt insisted that the new technical regulations, already postponed from 2021 to 2022, will not be deferred for a further year.

The cost cap occupied much of the call. Teams have already informally agreed that it should be reduced from its current level of $175m, less exclusions, to $150m.

However, as the crisis has ramped up in recent weeks – and a completely lost 2020 season has become a real possibility – several teams, notably McLaren, have been pushing for an even stricter cost cap. The three major teams impacted by the original figure – Mercedes, Ferrari and Red Bull – still have some reservations.

Read Also:

One key issue that emerged in today’s discussion concerned R&D costs incurred by teams that supply customer or partner teams with components such as gearboxes and suspension parts, and this will now be researched further before the next discussion.

The debate revolved around the bigger teams having an extra allowance that is in effect transferred from the partner team to take account of the work that went into creating those shared parts. For example, if the basic cost cap is 100 then the supplier team would have a cost cap of 100 + ‘x’ and the supplied team 100 – ‘x’.

The argument is that it wouldn’t be fair if partner teams don’t have to allocate any R&D costs to the relevant components and can thus spend more in other areas. This issue has come into sharper focus as the cost cap has shrunk, and thus every million dollars of further reduction becomes proportionately more important.

The 2021 financial regulations also state that “all costs in respect of Research and Development for F1 activities must be included in relevant costs in the reporting period in which they are incurred.”

In other words any R&D work conducted for the new 2022 rules in the 2021 calendar year must be accounted for within the 2021 numbers. This regulation has become more relevant now because when the new rules were slated for 2021 R&D work was to have been conducted in 2020, with no financial restrictions imposed.

shares
comments
Gallery: Over 70 years of Porsche's history in pictures

Previous article

Gallery: Over 70 years of Porsche's history in pictures

Next article

F1 organisation puts staff on furlough as bosses take pay cut

F1 organisation puts staff on furlough as bosses take pay cut
Load comments
The six critical factors that could hand F1 2021 glory to Hamilton or Verstappen Prime

The six critical factors that could hand F1 2021 glory to Hamilton or Verstappen

The 2021 Formula 1 title battle is finely poised with six races remaining, as just six points separate championship leader Max Verstappen from seven-time champion Lewis Hamilton. In such a closely-fought season, the outcome could hinge on several small factors playing the way of Red Bull or Mercedes

Can Whitmarsh appointment help Aston succeed where its F1 rivals failed? Prime

Can Whitmarsh appointment help Aston succeed where its F1 rivals failed?

Aston Martin owner Lawrence Stroll is determined to make the group a billion-dollar business. MARK GALLAGHER analyses his latest play – bringing former McLaren team principal Martin Whitmarsh into the fold

Remembering Switzerland’s first F1 winner Prime

Remembering Switzerland’s first F1 winner

Stepping up to F1 in 1962, Jo Siffert shone with Rob Walker Racing Team and BRM before his career was abruptly ended in a fatal crash at Brands Hatch in 1971. Kevin Turner looks back at the life of Switzerland's first F1 winner on the 50th anniversary of his death

Formula 1
Oct 21, 2021
What Verstappen is risking with his current stance on 2021 F1 world title defeat Prime

What Verstappen is risking with his current stance on 2021 F1 world title defeat

OPINION: Max Verstappen is back in the lead of the 2021 Formula 1 drivers’ championship, with the season’s final flyaway events set to get underway in the USA this weekend. But a defensive stance he’s recently adopted could have a lasting impact for the Red Bull driver when it comes to his chances of defeating Lewis Hamilton and Mercedes

Formula 1
Oct 21, 2021
The hidden Ferrari struggle that Sainz’s recent charge put to rest Prime

The hidden Ferrari struggle that Sainz’s recent charge put to rest

Despite appearing to adjust to life as a Ferrari driver with relative ease, it was far from straightforward under the surface for Carlos Sainz. But, having made breakthroughs in rather different routes at the Russian and Turkish races, he’s now targeting even greater feats for the rest of the Formula 1 season

Formula 1
Oct 20, 2021
The final throes of Brazil's fleetingly successful F1 team Prime

The final throes of Brazil's fleetingly successful F1 team

Emerson Fittipaldi is better remembered for his Formula 1 world championships and Indianapolis 500 successes than for the spell running his eponymous F1 team. Despite a hugely talented roll call of staff, it was a period of internal strife, limited funding and few results - as remembered by Tim Wright.

Formula 1
Oct 18, 2021
Why McLaren's expanding agenda will benefit its F1 resurgence Prime

Why McLaren's expanding agenda will benefit its F1 resurgence

In the 1960s and 1970s, McLaren juggled works entries in F1, sportscars and the Indy 500 while building cars for F3 and F2. Now it’s returning to its roots, expanding into IndyCars and Extreme E while continuing its F1 renaissance. There’s talk of Formula E and WEC entries too. But is this all too much, too soon? Stuart Codling talks to the man in charge.

Formula 1
Oct 17, 2021
How Tsunoda plans to achieve his F1 potential Prime

How Tsunoda plans to achieve his F1 potential

Yuki Tsunoda arrived in grand prix racing amid a whirlwind of hype, which only increased after his first race impressed the biggest wigs in Formula 1. His road since has been rocky and crash-filled, and OLEG KARPOV asks why Red Bull maintains faith in a driver who admits he isn’t really that big a fan of F1?

Formula 1
Oct 15, 2021