Q: Since the $150 million spending cap is arguably the most critical aspect of the current F1 rules package, and this year no team has been found to exceed the cost cap for 2022, it seems the numbers are not always adding up based on casually seeing how the teams operate.
If Mercedes or Red Bull employs 1000 workers at, say, $100,000 as an average salary, that leaves $50 million to travelling cost, material, tooling, development and manufacturing cost. Is this a realistic budget to cover for all that?
If a team raises more than $150 million in sponsorship money, what happens to the excess income from that if teams cannot spend it on other than team principals, drivers or the selected top talent — or whether it really gets spent on them and is not pocketed by investors? How much money (or service in kind) do the current top F1 teams actually raise in sponsorship?
I understand that buildings and wind tunnels are exempted, but how much money can a team in need such as Williams spend on factory expansion and on new tooling? Are there any limitations that do count towards the spending cap rule preventing improvements? What is James Vowles specifically worried about not being able to spend on when he says other teams are preventing him doing so?
How much money per year can Audi spend, since it plans to improve the Sauber/Alfa Romeo factory to achieve competitiveness for 2026? An unlimited amount? Can other teams spend that much money to improve their own performance at the same time? If not, why?
Why fans are expected to be satisfied that no team had breached the spending cap limit, only if the FIA says so? How can the public believe that, and that the FIA is not using the acquired accounting information for private negotiation /blackmail down the line?
Adam Lipcsey, Toronto, Ontario
CM: It’s not quite that simple Adam, as the cost cap has numerous exemptions and exclusions. For example, the power unit departments are under a separate cost cap so a chunk of those hypothetical employees don’t come under the cap you’re referencing, and nor do travel costs, marketing costs, entry fees, bonuses, non-F1 or road car activities. It’s quite a long list.
That answers where some of the excess money goes if enough sponsorship is raised above the cost cap limit, as there are other areas not related to car performance that can prove very expensive. But also teams are now meant to be profitable rather than money pits that often left them struggling financially and at risk of disappearing. It’s up to the team ownership how and where they spend that money in terms of top salaries or their own earnings.
There are capital expenditure limits that allow teams to spend some money on facilities, but that’s a blanket amount of $36 million spread across four years, so essentially you’re locking in the current disparity as Red Bull (for example) is able to update at the same rate and to the same cost as Williams, despite having far better facilities already from prior to the cost cap. That’s where Vowles wants to have more scope to invest in infrastructure as a team that fell behind years ago.
Audi can build up its own facilities, and has been doing so on a power unit front, but development will be restricted by the same power unit cost cap due to the team having already signed up to those rules as a supplier from 2026 onwards. But no, Sauber can’t spend unlimited amounts on its factory even if the money comes from Audi.
On the last point, you can only trust a governing body on what it says and then reflect on how those involved react to it. Teams are more interested in how each other submits their figures because they are still learning about how the financial regulations can be applied and policed and looking for their own loopholes everywhere. The FIA has invested even more this year to try and make it a more robust system, and there have been no protests raised by any of the 10 teams.
Private negotiation and blackmail would be an immensely dangerous game and, to be honest, is massively far-fetched. If anyone suspected a team was being allowed to spend more than any other, it would threaten the entire standing of the FIA, and conspiring to use the position of the governing body to blackmail an entrant would likely be a criminal offense.
Q: I started paying pretty close attention to F1 back in the ’90s and I don’t recall multiple teams digging themselves out of a ditch like McLaren and, to a lesser extent, Mercedes have since the beginning of the season. Can you comment on that? Especially McLaren, which I was sure was lost for the season when it kicked off.
Andy R., Detroit, MI
CM: I’m with you Andy, it’s one of the most impressive turnarounds I’ve seen. I remember Ferrari and McLaren being off the front-running pace in 2009 and then both becoming race winners later in the year — McLaren became one of the fastest teams by that stage — but that was in an era without a cost cap, so it could spend its way out of trouble.
The fact that McLaren has made such a step and then we’ve not seen others hit back later in the season is what surprises me so much. I expected it to be a case of following a concept and getting it right but that others would do similar and limit the overall gain by now, rather than McLaren appearing to get even stronger.
You mention Mercedes but it is rarely the second-fastest car anywhere, unlike the McLaren, which is testament to the work done. McLaren has scored 155 points in the past eight races, compared to 17 in the first eight. Only Red Bull (302 points) and Ferrari (163) has scored more, with Mercedes picking up 138 and Aston Martin 67. But perhaps more tellingly, McLaren has the most second-place finishes of any team outside Red Bull this year. And they’ve all come in the past seven rounds.