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Thursday, April 23, 2009


The FIA has asked Formula 1 team principals for their input on whether the £30 million per season budget cap figure announced at last month's World Council meeting should be revised.

In a letter sent to the team principals, FIA president Max Mosley requests the teams to submit what they consider to be the minimum acceptable figure for the budget cap.

Against the backdrop of a looming global recession, Mosley has already gone on record as saying that he would be keen to see the budget cap figure set even lower.

"I actually think it could be done for £25 million but that's just my opinion," said Mosley after the budget cap plan was first announced in March. "All my advisers think it should be more."

Mosley's letter offers the teams a final chance to make a case for adjusting the budget cap prior to the anticipated ratification of the technical and financial regulations at the next FIA World Council meeting on April 29. The budget cap is optional, although teams who opt not to adopt it will work to more restrictive technical rules.

Although some existing teams consider the budget cap figure to be too low, those who are evaluating a move into F1 believe that a competitive operation can be run for £30 million a year.

The FIA has also decided that race and test driver salaries should no longer be included in the budget cap figure, a change from the plan announced last month. Expenditure on marketing, hospitality and motorhomes is also excluded.

All other team activities will fall under the budget cap, with services and capital assets valued at the market rate. This will include engine and gearbox supply fees, technical support, windtunnel usage and any outsourced activities.

Mosley adds that the FIA plans to limit expenditure in the medium and long term with such spending restrictions, rather than relying on tight technical regulations.

The move towards budget caps is also likely to be attractive to some of the larger manufacturers who are working to slash costs. Mercedes-Benz CEO Dieter Zetsche told Bloomberg today that costs must be reduced in F1.

"People tend to see Formula 1 as a luxury to entertain management on weekends," said Zetsche. "Costs in F1 will come down significantly because everyone needs it."

The letter also reveals that the FIA intends to grant three new teams a place on the 2010 grid. Both Lola, which today announced that it is evaluating an F1 entry, and USF1 are among the teams who are likely to be in contention for the available slots.

There have been rumours that Cosworth has been in discussion with as many as eight teams that are evaluating a move into budget-capped F1.

This raises that possibility that F1 could return to a 26-car grid for the first time since 1995 despite numbers being limited to 24 in recent years.