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F1 set for $175 million cost cap and revised prize money structure for 2021

Published on 08 Jun 2019 10:39
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By: Harry Mattocks

Details of a proposed budget cap has been given to teams at the Canadian Grand Prix, with a cap of $175 million per year planned.

The FIA's Sporting Code stipulates that any new regulations must be agreed upon at least 18 months in advance of them being introduced, which gives Formula 1 a deadline of June 30th in order to finalise the 2021 changes.

This means that there is a meeting scheduled for the World Motorsport Council for the 14th of June, and this is where any final changes to the new regulations will be made.

According to reports, the FIA circulated copies of the draft sporting and technical regulations to all teams on the 4th of June, with a meeting taking place on Thursday. Further meetings between the teams and the FIA are planned before the deadline.

The new rules propose that a fixed $175 million will be enforced for all teams, but despite the efforts of Liberty Media, travel/accomodation costs will not be included with this, and neither will the salaries of the top three highest-paid team executives and any marketing/hospitality costs.

Also, there will be a redesigned revenue structure which will mean that prize money is divided into four columns.

Columns 1 and 2 will be similar to what it in place currently, whereby Column 1 will be 50% of the common prize pot which is divided equally between teams. Column 2 will be divided amongst the top ten constructors on a performance-based scale.

The third column replaces the current CCB system, which meant that Mercedes, Ferrari, Red Bull, McLaren and Williams were given bonuses due to their historic value.

With the proposed structure, there will be a bonus for finishing in the top three, with the income split up between the teams based on how often they have been in the top three championship positions over a ten-year period.

Ferrari will keep their 'Long Standing Team (LST)' bonus, but this will be halved from the current $70 million, and will not be able to be used for performance purposes due to the cost cap.

They will also retain their ability to veto decisions, but this will be restricted to specific circumstances.

denis1304

Posts: 284

No negotiations with any team! If you don't like new rules, you can leave. Thanks for playing

2
Jun 8 2019 - 14:01

F1 News

Replies (9)

calle.itw

Posts: 8,527
This is a good couple of changes. Personally I think 175 can be a bit too low of a cap, woulda preferred 250, but I don't mind. I also think it's fair that it won't impact some of the more off-track costs. Great that the historic bonus has been revised, though I think it should've covered the top 4 or 5 rather than the top 3, since now the money will literally just go to the big 3, who already are well-funded as is. Great that Ferrari's special treatment has been reduced a bit.
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- Jun 8 2019 - 11:17
- f1fan0101
  
  Posts: 1,804
  Apparently, the smaller teams wanted it even lower than that
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  Jun 8 2019 - 11:49
- calle.itw
  
  Posts: 8,527
  I'm sure they did, and I'm sure the big teams didn't want a cap at all. This was IMO as low as we could go. A lower cap would also scare off potential interesting new parties with big bucks to spend. Low enough to even out the field, high enough that there is still "a point" for bigger spenders to remain and spend big.
  + 0
  
  Jun 8 2019 - 12:03
denis1304

Posts: 284
Liberty Media and FIA missed big opportunity to level the playing field even more
They buckled under the threats from Ferrari, Mercedes and Red Bull that they will leave F1... we should be so lucky
- + 0
- Jun 8 2019 - 11:44
- f1fan0101
  
  Posts: 1,804
  What would you suggest?
  + 0
  
  Jun 8 2019 - 11:49
- denis1304
  
  Posts: 284
  No negotiations with any team! If you don't like new rules, you can leave. Thanks for playing
  + 2
  
  Jun 8 2019 - 14:01
- Ram Samartha
  
  Posts: 1,172
  If they left nobody would show up for races. Without manufacturing teams to push development F1 would just be glorified cart racing like F3.
  + 0
  
  Jun 8 2019 - 19:14
- denis1304
  
  Posts: 284
  imagine fastest 100 m runners start negotiate with IAAF about race rules
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  Jun 8 2019 - 20:06
RogerF1

Posts: 501
Maybe though this will give impetus to a massive overspend by the big boys from now to 2021 to get developments kicked off and in the pipeline to just be ‘finished off’ in the cap year when 90% of the cost work is done or even just to grind everyone else so far down they’ll never catch up. I agree with Calle, top 3 is no good as it will just maintain the current status quo. But, Ram Samartha, surely it’s the manufacturers that have brought us to the non-competitive front grid we are now in.
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- Jun 8 2019 - 20:54