PARIS (AP) — Formula One teams will be limited to spending USD145 million next season and even less in following years, after motorsport’s governing body approved a budget cap on Wednesday.
FIA said in a statement that the cap will be scaled down to USD140 million in 2022 and USD135 million for 2023-2025, based on a 21-race season. It excludes driver salaries and engine costs.
“Formula 1 wins today. This is a crucially important moment for our sport,” said McLaren team Chief Executive Zak Brown, who had pushed for a lower cap. “F1 has been financially unsustainable for some time, and inaction would have risked the future of F1 and its participants.”
F1’s finances have taken a significant hit with the first 10 races of the season either cancelled or postponed because of the coronavirus pandemic.
Figures released by F1 owner Liberty Media this month showed first-quarter revenue of USD39 million compared to USD246 million for the same period last year. F1 had debts of USD2.9 billion, offset by producing extra liquidity through internal transactions.
The smaller teams especially face an uncertain future, leading to discussions about reducing the budget cap.
A cap of USD175 million was already agreed last year but several teams wanted it lowered again. Ferrari argued against it, but McLaren wanted it pushed as low as USD100 million.