Ferrari boss explains impact of 2023 F1 salary cap

A salary cap for both drivers and top team personnel has taken a step closer to becoming a reality from 2023 – but how will it work, and can it be policed?

The principle was supported in an F1 Commission meeting held after the Portuguese GP. However the details have yet to be signed-off, and it’s not entirely clear how it will operate.

What has been agreed is that reining in salaries is the logical next step following the introduction of the budget cap that comes into force next season.
Why does F1 need a budget cap?

Earlier this year, with the start of the 2020 season postponed and with limited income being generated by the F1 organisation with which to pay the teams, the sport’s stakeholders made a wise decision to reduce future spending.

The original budget cap had been set at $175m, but after discussions it was reduced drastically to $145m for 2021, and then $140m for 2022 and $135m for 2023.

There’s a long list of items that are not included in the budget cap, which in essence represents the cost of building and running the cars.

Contracts that have already been signed and which extend to that season – such as that of Charles Leclerc at Ferrari – are not affected, and will be subject to a transition period.

Furthermore until the rules are published there is a window in which new deals can be agreed.

Ferrari boss Mattia Binotto, committed to a long-term deal with Leclerc, also stressed that the details will be important.

“What I can say is that I don’t think we decided yet,” said the Italian. “The only decision that has been taken is that yes, we are all prepared and happy to go further in analysing the situation, evaluating what can be the system in order to apply it.

“We’ve got a contract in place long-term with Charles, so it’s a delicate matter. I don’t think there is an easy solution.

“I think really we need to dig into it and understand all of the implications, which at the moment I do not have a clear picture. So I’m open-minded, but with no position.”

It’s a complex issue, but both F1 and the FIA have some clever people working on the financial regulations, and they have already addressed the wider issue of the main budget cap.

The question now is one of timing, and how that impacts any new driver deals that are agreed or extended at current market rates before new restrictions come in.

The post Ferrari boss explains impact of 2023 F1 salary cap appeared first on Scuderia Fans.

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