“Budget cap to be raised immediately”: Andreas Seidl demands immediate action

McLaren team boss Andreas Seidl believes that it is high time that budget cap in F1 be raised

Formula One
Formula One

Formula One has had a third rule to regulate the section since 2021. In regard to technical and sporting regulatory requirements, a very structured finance legislation that characterizes the funding levels that teams must bear during a season has been launched. The components of expenses that must be deemed and exempted are detailed up to the spending ceiling, which is established at 140 million dollars for the 2022 season. A figure that, while subject to change if the number of races in the season changes, has been set at 135 million for 2023.

The legislation also establishes a margin of 5 percent more or less than the optimum expenditure value. In fact, it is unusual that there is both a minimum and a maximum spending cap, both of which are set at 133 million dollars in 2022. Teams must not only adhere to these guidelines, but also reveal their budget allocation and expenditure items to a 3rd judicial body ordained by the FIA on a routine basis. The fines for any more or less serious violation ballpark from an admonishment to disbarment and the decrease of the spending cap to lower numbers than the other rivals.

Formula One has clearly not been spared the increased costs associated with the world’s surging inflation as well as the rise in energy and resource costs. When the fiscal policy was published about three years ago, it was a wholly unprecedented financial situation that now threatens to cause issues for the majority of the teams. The threat, contradictorily, is not of spending too much, but of exceeding the spending cap too quickly and having to halt car development preemptively.

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McLaren team boss Andreas Seidl’s take on this matter

McLaren team principal Andreas Seidl
McLaren team principal Andreas Seidl

“It is clear that respecting the budget cap is a necessity for us and for this sport. It is no secret that McLaren was among the teams that pushed to include the spending limits that we find in the regulation today. Likewise I think that if unforeseen circumstances arise, such as those that are occurring this year with the heavy increases in energy and transport costs, it should be possible to discuss between the teams and the FIA ​​to find a solution reasonable,” said McLaren team principal Andreas Seidl.

The rising rate of inflation wasn’t the only factor affecting the expense cap. In this volatile financial marketplace, even the currency in which salaries or commodities are compensated can have a significant impact on final expenditure. These are factors that were not given much thought a year ago, when inflation was sluggish and stock exchanges were steady.

“We are still at the beginning of the introduction of the budget cap and it is normal that there are things we learn with the theme on this subject. We need to discuss what is the best mechanism for adjusting the spending limit to inflation . A similar mechanism had already been defined a couple of years ago before the introduction of the F1 financial regulation and was supposed to come into effect from 2024 onwards. Given what is happening in the world, however, I believe it is a system that needs to be reviewed,” added the German team principal.

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