Proposal: Extra money for all F1 teams
A compromise is emerging in the dispute over an inflation allowance. Formula 1 is to pay out extra money to all teams, which would then not count towards the budget cap. However, the support would then be deducted from the distribution pie.
Michael Schmidt 27.06.2022
For a long time the fronts were hardened. Mercedes, Ferrari, Red Bull, McLaren, Alpha Tauri and Aston Martin have been begging the FIA for months for an extraordinary inflationary adjustment as part of the budget cap. The FIA's financial regulations provide for such a thing only if the average inflation rate of the G7 countries in September of the previous year is above three per cent. In September 2021, it was 2.9 per cent. Thanks to Japan's low inflation rate.
Since Russia went to war with Ukraine, price inflation has worsened dramatically. The US, Canada, Japan, the UK, France, Italy and Germany are currently averaging 6.2 per cent. This means that the budget cap will definitely be raised in 2023. But six of the ten teams already want an increase and plead "force majeure".
Formula One boss Stefano Domenicali is still putting on the brakes.
Three million or three per cent?
Alpine, Alfa Romeo, Williams and most recently Haas were against it and blocked the adjustment of the financial rules by vetoing it. An increase in the cost cap is of no use to them because they don't even reach the limit. "My budget limit is my budget," says Alfa-Sauber team boss Frédéric Vasseur. The FIA now wants to have found the golden compromise that brings all parties to the table. However, the F1 management has not yet received the details.
The following leaked out: Rights holder Liberty is to pay all teams a certain amount in cash. Some are talking about three million dollars, others about three per cent of the current cost limit of 140 million. That would be 4.2 million dollars. This money can then be spent without counting towards the budget cap. This means that the teams that are under the cap would also get something out of it.
Support comes off the overall cake
The support, however, is not to be given for free. Liberty would subtract the inflation surcharge from the overall cake. This hits the rich teams harder than the poor ones. The world champion participates with 14.5 per cent of the total payout, the tenth only with seven per cent.
Alpine team boss Otmar Szafnauer can live with this compromise: "If everyone benefits equally, we're in." Haas colleague Guenther Steiner says: "That would be a decent compromise, because the teams that don't reach the budget limit also benefit.
The FIA's plan is not yet on Stefano Domenicali's desk. The Formula 1 management is therefore putting the brakes on excessive optimism: "We are looking at the proposal. After all, it is our money that is to be distributed.
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