F1 plans immediate reduction in new budget cap, reveals Brawn
Ross Brawn has revealed Formula 1 is planning to reduce the amount teams can spend under the new budget cap by $30m from the original figure of $175m, as the sport looks to cut costs in the wake of the coronavirus pandemic.
A cost cap of $175m was set to introduced in 2021 but in light of the F1 season having been delayed because of the virus outbreak and the subsequent economic squeeze on the sport and the teams, Brawn says the new annual spending cap will be set at $145m. The aim is to create a glidepath thereafter, further reducing teams' annual spending, once final talks with the teams have been concluded.
Brawn, F1's managing director of motorsport, held talks on Monday with F1 CEO Chase Carey and the FIA over the future and sustainability of the sport, and soon after spoke to Sky Sports F1, saying: “The message is clear – we’ve got to cut costs – and therefore there’s another big step in the reduction of the cost cap.”
“We started at $175m, that was a long battle to get it there. With the current crisis we’re now going to start at $145m and the discussion really is how much further we can drive [it down] over the next few years.”
With the situation we have now, economic sustainability is the priority, and I think that counts as much for the big teams as it does for the small teams
“Today’s meeting was [between the] FIA and Formula 1… and the details will be going out to the teams in the next few days,” said Brawn. “There’s been a lot of consultation and I think we’re now we’re at the very final stages. It’ll all become clear shortly.”
Ferrari were opposed to such a strict cost cap of $175m while other teams such as McLaren were supportive of reducing that figure further, but the coronavirus pandemic has put pressure on F1 and all the teams to reconsider how much they are spending.
“The initial objectives [of the budget cap] were a more competitive field and I think with the situation we have now, economic sustainability is the priority, and I think that counts as much for the big teams as it does for the small teams.”
The resource gap between the top teams like Mercedes and Ferrari, and midfield outfits such as McLaren and Racing Point will be further shrunk by an increase in prize money for midfielders, added Brawn.
“There’s going to be a much more equitable prize fund in the new agreement. The midfield teams are going to be much better off in terms of their proportion of prize money. So it’s being balanced in every direction," he said.
“We’re reducing the amount of money that can be spent in Formula 1 and improving the distribution of the prize fund more evenly amongst the teams. A good midfield team should be able to score podiums, maybe a win, and it should make a small profit.
“And if we can achieve that then we’ve got a very sustainable future."