Fresh F1 cost cap ruling triggers scramble for teams to avoid breach – report

Jamie Woodhouse
The start of the Canadian GP from above. Montreal June 2023. F1 schedule

Max Verstappen leads the field at the start of the 2023 Canadian Grand Prix.

With the FIA having reportedly moved to close a grey area on satellite companies under the F1 cost cap, now it is said some who fell foul are left with a potential overspend to eliminate.

The budget cap has been active in Formula 1 as of the 2021 campaign, an initiative designed to level the playing field in Formula 1 by taking away the crushing spending power that the top teams once enjoyed.

Those organisations then, namely Mercedes, Ferrari and Red Bull were forced to slash their spending to come in under the cap, and it now seems some unnamed teams will need to go into penny-saving mode to avoid a breach of the cap in F1 2023.

F1 cost cap technical directive issued by FIA

The above mentioned teams, plus the likes of Aston Martin and McLaren, all have satellite organisations to work on wider projects outside of the world of Formula 1, but the lines of co-operation commonly have crossovers, with teams moving staff between these projects and Formula 1.

James Allison for example has recently returned to the technical director role at Mercedes’ Formula 1 team, having overseen INEOS Britannia’s efforts in the America’s Cup.

Such additional projects and satellite companies do not count as expenditure under the budget cap, which had led to some fears, raised by the likes of Alpine boss Otmar Szafnauer, that these teams were using this as a grey area to gain essentially free knowledge for their Formula 1 operations.

If they were, then such a loophole apparently no longer exists, as report that the FIA has brought ‘TD45’ into force which states that while teams can continue to have these divisions, if any of their work finds its way into the world of Formula 1, then that must be declared as spending under the cost cap. recommends

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Now an F1 cost cap breach looms without action claim that a ‘leading F1 source’ has said that the impact of this ruling is being felt already.

Although not naming any teams or a number, the source claimed that there are some who have realised that their actions are now no longer permitted, but with the technical directive having apparently stated January 1 as the cut-off point, already the teams are six months into this financial period and so now spending must be reduced elsewhere.

“It’s had an impact,” said the F1 source. “Some have been forced to act because they realised what they were doing is no longer allowed.

“But the difficult part is they will have been doing it since January 1, so they will have had a spend up until this point that they now need to address and somehow claw back.”

Red Bull found out last year that the cost cap bites back, the FIA having fined them $7 million and docked the team 10 per cent of their allotted wind tunnel time for a minor overspend breach.