Formula 1 launched its first budget cap for teams in 2021, after a major push by the FIA and commercial rights holder Liberty Media to make the series more sustainable in terms of its funding.
Last year, the teams were limited to spending a maximum of 135 million euros, a figure that this season has been reduced to 131 million and that next year will be reduced by another four and a half million euros, although there is a constant debate between the teams about the impact of inflation and the current global situation.
The numbers that are handled include a series of exceptions. Among them is the salary of the drivers but, for some time now, the possible introduction of a separate cap, covering payments to drivers and key team personnel, has been under discussion.
Ferrari boss Mattia Binotto explained that it was an issue that had been dealt with recently by teams, but warned there was “no easy solution, especially for the drivers’ salary cap”.
“We are discussing it, trying to see what solution might exist,” Binotto said.
“It will not be in the short term, the reason is that we already have contracts in place, and we cannot just break them. There are legal implications to understand how to do it, so it is a big debate.”
“It’s an important conversation, we understand that and we recognize that it will take time, but we will undoubtedly have to go through this process.”
Initially, 2023 was targeted as the season in which the salary cap could kick in, but some drivers have contracts that go well beyond that date. For example, Charles Leclerc is tied to Ferrari until the end of 2024, while Red Bull’s Max Verstappen has a huge contract that runs until the end of 2028, worth up to €50m a year.
Red Bull team boss Christian Horner considered the motivation for a salary cap to be “well justified”, but its “implementation is complicated”, and warned of the danger of F1 becoming “an accounting world championship”. .
“There are a lot of things that need to be tidied up within the existing cap that we have, which is being extended to be an engine cap as well,” Horner said.
“There are all kinds of complications, with companies’ reporting structures, etc. So there are many, many complexities, but I think we have to go further.”
This attempt to consider a salary limit for the drivers, which would be around 28 million euros between the two drivers, according to previous conversations, and that, if exceeded, the extra payment would come out of the team’s budget cap, has been supported by a number of teams, including Alfa Romeo and Alpine.
“I think it’s the right approach to try to coordinate it with the budget [cap] and maybe have an allocation for this,” Alfa Romeo boss Frederic Vasseur said.
“You could go over the cap and you would have to use some of your budget cap, I don’t know. But we have to find something like that because it’s important for the sport.”
Alpine boss Otmar Szafnauer also offered his opinion: “I’m in favor of adding that overall cap so that teams can trade off driver skill with upgrades, because ultimately both things add performance on the track.”
“And I think having the freedom to be able to trade that is probably the right thing to do.”
Salary caps already work in other professional sports, such as rugby and American football, which McLaren boss Andreas Seidl says shows there is a “mechanism that could work” for F1.
“At the same time, I think it’s important now to just continue the talks behind closed doors,” Seidl added.
“There is no point in discussing now in public how this could all work. So we will have to remain vigilant.”
