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Formula One teams limited to a US$145 million budget cap from next year

by Ace Damon
Formula One teams limited to a US$145 million budget cap from next year

PARIS –
Formula One teams will be limited to spending $ 145 million next season and even less in the following years after the governing body of the motorsport body approves a budget cap on Wednesday.

The FIA ​​said in a statement that the limit would be reduced to $ 140 million in 2022 and $ 135 million for 2023-2025, based on a 21-race season. Excludes drivers' wages and engine costs.

"Formula 1 wins today. This is a crucially important moment for our sport," said McLaren team chief executive Zak Brown, who pushed for a lower ceiling. "F1 has been financially unsustainable for some time, and inaction would risk the future of F1 and its participants."

F1's finances have had a significant impact on the first 10 races of the season, canceled or postponed because of the coronavirus pandemic.

The figures released by Liberty Media, owner of F1, this month showed revenue of US $ 39 million in the first quarter, against US $ 246 million in the same period last year. F1 had debts of US $ 2.9 billion, offset by the production of extra liquidity through internal transactions.

Smaller teams especially face an uncertain future, leading to discussions about reducing the budget cap.

A $ 175 million cap had already been set last year, but several teams wanted him to fall again. Ferrari argued against it, but McLaren wanted it to reach $ 100 million.

The FIA ​​also approved a new sliding scale system for aerodynamic testing, following Wednesday's vote by the World Motoring Council.

This means that the shorter the team finishes in the constructors' championship, the longer the wind tunnel takes the next year to develop the team's car. This initiative was designed to take advantage of the larger teams, helping those with the least resources to compete more evenly.

The last 10 championships have been dominant doubles.

Led by six-time F1 champion Lewis Hamilton, the Mercedes team has won the last six drivers and constructors' championships – a record in F1. Before that, Red Bull won both categories four times in a row with Sebastian Vettel driving.

"A uniform budget cap, coupled with a more uniform distribution of revenue between teams, will ensure greater competition and more people who want to watch live and on TV," said Brown. "Ultimately, fans win, and if fans win, the whole sport wins, too."

F1 hopes to start the season with consecutive races at the Austrian Grand Prix in early July, followed by two at the British Grand Prix.

F1 President Chase Carey said he hopes that 15-18 of the 22 races this season can still be run.

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