Does budget cap have immediate effect? 'Big teams still have a year or two advantage'

Since this year a budget cap is in force in Formula 1 which is set at 132 million euros. From 2022 onwards this cap will be lowered to 117.5 million euro and where this makes little difference for small teams, it has a lot of consequences for big teams who normally spend way above this. An exception to the rule is the salary of drivers among others, otherwise it simply wouldn't fit within this cap.

Salaries don't count

Mercedes, Ferrari and Red Bull Racing invest around 400 million euros annually. In Mercedes' case, it's convenient that salaries, non F1 activities, travel expenses and more are excluded, as that far exceeds the budget cap that currently applies. For example, team boss Toto Wolff tells the Stuttgarter Zeitung: "If you include the salaries of the drivers, the three most expensive employees and marketing, you might end up with a total budget of 230 to 240 million."

In any case, certain expenses that do fall under the cap will have to be cut in order to meet the cap and Helmut Marko argues that it is very difficult. Mainly because 2022 brings a major change in regulations, which means teams will have to build completely new cars and that comes with a lot of costs.

Marko: "It is an incredibly difficult task. We have to implement the biggest regulatory change of the last ten, fifteen years with less budget." Then to think that they are also incurring costs for this year's car. While the idea sounds easy on paper, it is very difficult in practice, and so Mercedes has overhauled its internal structure.

Wolff says: "We had to change the structure of the team, the way we work together, we had to optimise processes and become more efficient. The more efficient we work, the more performance gains we see on the track," with which Wolff also points to a potential success. It's clear that the teams have been working hard and that it's not easy.

Still a year or two away

The aim, of course, is to bring the field even closer together and create a fairer sport, but we won't see the effects of the budget cap immediately. Former F1 driver Christian Klien expects the big teams to have the advantage for "another year or two", he told the German newspaper. After that it should get even better.

Andrew Green of Aston Martin feels a slight change: "We are not equal yet, but we have become more equal."