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FIA confirms £40 million budget cap for F1
FIA confirms £40 million budget cap for F1
Posted By:   |  30 Apr 2009   |  11:08 am GMT  |  59 comments

The details of the Budget cap have been released by the FIA.

It will start next season. The level has been set at £40 million with no ‘glide path’ from a higher figure to a lower one. It will present teams with an obligation to lay off a significant number of people quickly, which in itself is an expensive exercise.

The FIA has maintained the idea of a two tier championship, with teams able to spend more if they wish to, but the cost controlled teams enjoying greater technical freedom. This will greatly annoy Ferrari and BMW.

The FIA statement reads as follows:
“From 2010, all teams will have the option to compete with cars built and operated within a stringent cost cap.
The cost cap for 2010 will be £40m per annum*. This figure will cover all team expenditure except:

– Marketing and hospitality;
– Remuneration for test or race drivers, including any young driver programmes;
– Fines or penalties imposed by the FIA;
– Engine costs (for 2010 only);
– Any expenditure which the team can demonstrate has no influence on its performance in the Championship
– Dividends (including any tax thereon) paid from profits relating to participation in the Championship.”

Drivers being excluded will drive up their wages. But these may fall under the budget cap in future years. Engines being excluded means an additional £5million for customer teams and allows the manufacturers some latitude in reshaping their engine departments. Many will be providing customer engines to teams.

The whole plan is aimed at attracting new teams to the series and the field has been increased to 26 cars, so 13 teams can get an entry. Bernie Ecclestone has agreed to give the new teams a share of the prize money (normally they would have to serve a couple of years before getting anything)

“In addition to the payments which it already makes to the top ten teams in the Championship, Formula One Management, the commercial rights holder, has agreed to offer participation fees and expenses to the new teams. This includes an annual payment of US$10 million to each team plus free transportation of two chassis and freight up to 10,000 kg in weight (not including the two chassis) as well as 20 air tickets (economy class) for each round trip for events held outside Europe.

“To be eligible for this, each new team must qualify as a “Constructor” and demonstrate that it has the necessary facilities, financial resources and technical competence to compete effectively in Formula One. ”

The technical freedoms the capped teams may enjoy are as follows:

“1. Movable wings, front and rear.
2. An engine which is not subject to a rev limit.

The teams will also be allowed unlimited out-of-season track testing with no restrictions on the scale and speed of wind tunnel testing. ”

To put pressure on the existing teams to comply , the FIA has said that entries must be in soon,

“Applications to compete in the 2010 FIA Formula One World Championship are to be submitted to the FIA during the period 22-29 May 2009. Teams must state in their application whether they wish to compete under cost-cap regulations. ”

The team’s association, FOTA is meeting in London on May 6th. Their response will be very interesting, with Ferrari particularly furious.

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FIA, if you can see this. I would like to say you are BS! This’s the last season i watch, BS!


It’ll be interesting to see how a budget cap works on global scale. A budget cap of £40 million is all fine and dandy, but how is that working when you have partners all over the globe? Is this based on current exchange rates at the time? At the start of the season or some other date in time? Lets move the team to India and get some cheap labour. No doubt this is covered somewhere.


Maybe we could see the return to F1 for Cosworth next season? with thre new teams coming in, it’s a possibility.



Please don’t lower the tone of James’ blog to forum troll standards. We know what today is, have some respect and be quiet.


Personally i would like to see all teams being privateers, manufacturers supplying engines, technical freedom within box areas as is applied now, unlimited testing for rookie drivers only and low fuel qualifying.

All this with a budget cap would ensure great racing and longevity im sure and this decision goes some way to achieving that.

Great news.


Refuelling ban hey…

Seems like an idea not worth chasing in my opinion. I’m a relatively young person (just turned 18) and only started following F1 towards the end of last year, but I have gotten really into it, and went to the Australian GP this year.

Refuelling, to me, is one of the more exciting things…sure passing cars in the pits is not the best solution, but I think that a refuelling ban will not help. I just don’t think we are at the stage just yet, where we can say that cars are able to pass each other on the track with ease – its just not feasible at the moment. Its easier in ’09 for sure, but its by no means easy overall.

Personally I think the FIA should take more notice of FOTA and their proposals, rather than just dreaming up their own, plainly because they can.

Its about time the FIA stopped pushing their own agenda so much, and using “cost cutting” as an excuse. If we listen to the teams in the first place, a much more desirable outcome can be obtained…better for the fans, better for the teams, and better for Formula 1.

What are your thoughts James?


I’d hate to be an engineer in F1. Hello, unpaid overtime, those who manage to keep their jobs.

Those who don’t won’t find it easy to enter the automotive field right now either.


I’d like to hear more about the exemption of “Dividends (including any tax thereon) paid from profits relating to participation in the Championship.”

Initially I thought this was just to allow the Flavio’s and Whitmarsh’s to continue eacrning the ‘big money’ by taking it as a dividend instead.

But am I right in thinking a team with a staff bill of £40m could change their contracts to take the basic pay down to £20m, but (assuming they’re profitable) then payout another £20m in dividends to all staff, thereby keeping the current staff levels?


I guess this is the reason of the mclaren lenient penalty. mclaren has no choice but to be on the FIA side.
Nevertheless, the budget cap is a great idea. It ensures the future of this sport and ends “checkbook racing”.
This way it is the best driver and the best manufacturer that will really win as opposed to the rich manufacturer, who may not necessarily be the best but used their wealth to get an advantage which may not be available to poorer teams.


Just curious regarding the engine revs. Since majority of customer engineers are supplied by manufactures ie ferrari, mclaren and toyota. Just a devilish thought to me that these teams could provide alternative engines to them which will be equivalent to their rev-down engines in horsepower. In this case, the rev limited engines will no longer be a handicap any more !


are we saying that a capped team can only spend £40m but if its sponsorship plus prize money comes to £40m then they basically race for free – so a manufacturer can run a team for nothing?

also what needs to be addressed asap is how the FIA controls the technical freedom of the capped teams. say the first race shows that the capped teams have a massive advantage. what will the FIA do?
1) change the limits of technical freedom to the capped teams based on that race
2) leave it and see what happens and make a decision at random later on in the year by which time the championships could be almost decided
3) leave it and don’t bother to touch it, knowing that the uncapped teams will have to opt for the capped budget in order to be competitive.

it’s basically in the FIA’s hands to force everyone into a budget capped operation if they wanted to, which could well be at odds with the promise of the apparent ‘choice’ in the matter.

with everything that’s happened however, i think we need the FIA however to be less involved with the racing and what happens on track


I dont agree Ben, with Lola and Aston Martin likely to enter, its likely to consolidate GB’s position as the lead constructing nation.


Unlimited revs and moveable wings sound very very interesting!


“Remuneration for test or race drivers, including any young driver programmes;”

Does this mean we will be seeing top teams such as Red Bull dropping their yound driver programs in order to save money for other areas of the team? That’s not great news for aspiring young talents that don’t quite have the funds to compete at the higher levels.


My questions is when does the budget cap kick in? Is it in place for the calendar year of 2010 or does it include any work currently being undertaken for the 2010 car? Surely not the calendar year as that would effectively mean you could throw whatever money you like at the car now.

I’m also interested in the date for signing up for the 2010 championship. Will this effect Brawn GP in any way? I know there’s been talk of Virgin or other sponsors jumping in for naming rights. Would that mean any potential ‘ownership’ deal would need to be completed before then?


I feel the budget cap is important for the future, and in a few years time this will probably be the accepted view, however it must be implemented carefully. It will level the playing field and I hope produce some very close racing throughout the whole field. In recent years the the more moeny you spent the more success you had. Not a particularly healthly position.

This looks like a very middle of the road decision, trying to keep everyone interested. Drivers being out of the cap keeps the big teams interested (they pay the most) and doesn’t make any difference to potential new entrants (they’ll probably be chasing pay drivers or giving youth a chance). I wouldn’t be suprised to see the 40 million raised a bit, and possibly the FIA offering more incentives for new teams. Whats happened to the £50 million McLaren gave them a few years ago?


I assume McLaren, BMW, Toyota and Ferrari are already breaking out their F1 engine departments into seperate companies, ready to sell to anyone out there in 2011? Even if you never sell the engine to anyone but your own team, surely it’d be legally tricky for the FIA to control the engine costs if you were happy to lose money.

Do you think the additional teams will end up including a McLaren B-team and a Maserati team running Ferrari engines?


What I don’t understand, is how is this “technical freedom” going to be of much use if they don’t have the budget to develop it?

It’s all very well saying “you can do whatever you want as long as it only costs <£40m” but you can only do so much with £40m.

I’m also worried it’s going to lead to tediously predictable seasons with car development either being very slow or dying halfway through the season as they reach their budget caps..


I hope all the FOTA teams tell BE & MM to shove these rules and not sign up to them on the 22/29 may


James. Bit of a Carlsberg blog going on here. Good stuff. Can I ask if a) You think this is the final figure? And b) Can you give a very brief summary on how you think the various teams feel about this?


This is a shame. In a few years F1 will be barely recognisable. It is getting harder and harder to explain F1 to casual fans. And if you want 26 cars, how about a NASCAR or MotoGP points system? 1 point for 8th out of 26 cars seems a joke.

If there is one thing I hate about Max’s regime it’s too much change year to year. Absolutely no stability, that in itself costs money. So many of his “cost cutting” changes are hypocritical and do more harm then good. I could name numerous examples, but who cares in a dictatorship all that matters is what the boss says. I will admit he has done “some” good, but overall it’s just a mess.

I could go on and on and on but it’s not worth complaining too much, as there is nothing we can do about it. 🙁


This is more bad news from Bernie & Co for UK PLC. With all the job losses and cost cuts the UK is in danger of losing its place as the centre of motor racing excellence. On top of which is the loss of the British GP.

Building fast racing cars was one of the last great aspects of British manufacturing that remained. I wonder if anyone in the Government will make a comment? Or are they still too embarrassed about that donation?


well i think we can be sure that di montezemolo won’t hold back – hopefully he will blast this ill-judged and rushed proposal out of the water. how can the FIA be so arrogant as just to push through such massive rule changes with no regard to the competitors actually involved?


I think the budget cap in itself is a good idea, but presenting it in this two-tier system does not seem the best way forward.

I suppose it depends on how much extra you have to spend to make it worthwhile to still beat the capped teams, even with their extra technical freedoms. And how long it will be before the FIA offers extra incentives and/or rule changes to bring the capped teams closer to parity to the bigger spending teams.

But it seems hard to escape the fact that you will have a formula within a formula with this situation, even if the FIA apparently doesn’t see it like that.


Whilst I agree with a cost-cap, this should apply to all teams and be phased-in over several years. A two-tier system will not work in the long term and all teams will be forced to operate under the cap (shedding hundreds of jobs) as the benefits of running an unlimited engine and other technical freedoms will make a huge difference.

I can also see potential political problems ahead between uncapped and capped teams: If for example, Torro Rosso were to run under the cap, would Ferrari be happy with them running their engine unrestricted ?

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