Formula One’s governing body, the FIA, has announced that all 10 teams were under the cost cap for the 2022 season and there were no rule breaches. Here’s what you need to know:
- F1 teams were restricted to spending $140 million on their cars over the course of 2022, the second year of the financial regulations being enforced.
- In one of last year’s biggest controversies, Red Bull was revealed to have breached the 2021 budget cap, resulting in a $7 million fine and a reduction in its aerodynamic testing.
- But all 10 teams have complied with the financial regulations for 2022.
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A political storm averted
The budget cap was one of F1’s big political battlegrounds last year after Red Bull breached the $145 million limit in 2021 by $2.2 million, something that frustrated many of its rivals, who felt it offered an unfair advantage in the design of its car.
Red Bull insisted it had done nothing wrong, but eventually entered an “Accepted Breach Agreement” with the FIA where it took responsibility for the breach. Team principal Christian Horner hit out at the “draconian” penalty and the timing of the announcement, which came soon after Max Verstappen won his second world championship.
F1 cost cap controversy: Red Bull’s Christian Horner, McLaren’s Zak Brown go toe-to-toe
It meant the cost cap was always going to be a closely scrutinized topic in 2023 as the FIA completed its audit of last year’s accounts. The FIA more than doubled the size of its financial department in a bid to deliver an earlier verdict to teams and stop it from dragging late into the year, potentially overshadowing the closing races of the season.
That has been achieved. The certificates of compliance have been issued to teams over a month earlier than in 2022, ending any speculation about potential breaches. In July, the FIA issued a statement denying rumors that as many as three teams might have breached the cost cap, saying its process was still ongoing.
Had there been any breaches, then it would have reignited the debate surrounding the suitable sanction for going over the cost cap. In April, Ferrari team principal Fred Vasseur said Red Bull’s penalty was “too light.” Red Bull has won all 14 races so far this season.
The FIA noted in its announcement Tuesday that there had been “an extensive check of any non-F1 activities undertaken by the teams, which comprised multiple on-site visits to team facilities and careful auditing procedures to assess compliance with the Financial Regulations.”
The FIA also said that all teams “acted at all times in a spirit of good faith and cooperation throughout the process.”
The purpose of the cost cap
F1 introduced the cost cap in 2021 to make the sport more financially sustainable, forcing some teams to cut their budgets by as much as half.
The cap was initially set at $145 million in 2021, reducing by $5 million per season for the first three years with some small extra allowances for more races on the calendar and to account for inflation.
Teams do have various exceptions to the cost cap, such as the driver salaries and their marketing spending, but it is anticipated it will help bring the field closer together in performance over the coming years.
“The Financial Regulations are essential to the long-term financial stability of the sport, and they will continue to be developed and refined based on the findings of each review process both in terms of the regulations themselves, which are written and approved under the FIA Formula 1 governance process, and the way in which they are enforced and policed,” the FIA said.
“The FIA has made and will continue to make significant investments in this department for the collective benefit of the sport.”
(Photo: Clive Mason / Getty Images)