F1 introduced a budget cap at the start of the 2021 season, first limiting spending by teams to €135m a year. That figure has dropped to 130 million by 2022 and will drop by a further 4.5 million euros next year, although talks are ongoing about the impact of inflation and rising flight costs.
There are several things that are not taken into account in that budget figure, including drivers’ salaries, but Formula 1 is also considering limiting what drivers earn in the coming years.
Two-time world champion Fernando Alonso said at the Monaco GP that he didn’t think F1 needed to introduce a salary cap, pointing to the great job drivers do to promote the championship.
“I don’t think it’s necessary,” the Alpine driver said.
“The drivers have always been on the sidelines of that issue, and I think the drivers are being used more and more to promote Formula 1. We are doing more and more events and we are more in contact with the fans.”
“They ask us more and more and they benefit from it. So we should be outside that cap. It’s very complicated.”
Several drivers have questioned the feasibility of a salary cap, including Lewis Hamilton, who has argued that it could hurt younger stars while there are also restrictions on image rights.
Alfa Romeo boss Frederic Vasseur said in Monaco that he believed a salary cap for drivers and top team officials would be “the next issue on the table” as the sport pushes for greater economic sustainability.
The proposed plan for the salary cap is that of 30 million dollars of salary between the two drivers of the team (about 28 million euros). Should this figure be exceeded, the extra money spent on drivers’ salaries would have to be reduced from the team’s budget cap.
The cost limit is again in the spotlight, as several teams push for the limit to be increased to 140 million dollars (130 million euros) for this season, due to financial pressures caused by inflation and the increase in travel costs, derived from the current global climate after Russia’s invasion of Ukraine .
Ferrari claimed in Monaco that it had no chance of not breaking the $140m cap this season, so it is one of those calling for it to be increased. But other teams take a dim view of the matter, suggesting that the bigger teams simply under-develop their cars to stay under the limit.
