LONDON: Formula 1’s new rules of imposing a cost cap of $150 million a year from 2021 might result in people being unemployed within the teams, according to a BBC report.
Bigger teams such as Mercedes, Red Bull and Ferrari spend nearly $300 million a year and have up to 1,000 people on their payroll. With these teams based in the UK, cutting costs isn’t a feasible solution according to their top bosses. If the move is implemented, it must be executed gradually, they argue.
“In the UK, you are talking about potentially thousands of jobs.” Red Bull team boss Christian Horner told BBC.
“If a local car plant or supermarket shuts, it makes the headline news. A social responsibility needs to be taken into account when talking about restrictions and caps. It doesn’t sit well when drivers can earn up to $50 million (£37m) a year.
“The whole thing needs to be looked at quite carefully. The FIA [F1’s governing body] and Liberty are aware of that. Our biggest cost drivers are regulations, sporting and technical. There is a responsibility that needs to be given serious consideration as to how these changes are implemented.”
Renault and McLaren are two other teams that could suffer from such consequences.
Mercedes’ F1 boss Toto Wolff commented on the issue as well. “This was a good point where Liberty recognised that a cost cap cannot be an event but needs to be a process over several years and consider the structures that have been put in place and they are taking our feedback on board. It is clear we will all be protecting our structures and we expressed that [in the meeting].”
“I see some common sense on the table (when it comes to negotiations). There are still areas where we are very far away but it is moving forward in a constructive, structured process.”
Liberty Media, the owners of Formula 1 since January 2017 after buying its commercial rights, have been keen to revamp the sport from 2021 after most teams’ contracts expire. Apart from the cost cap, changes in engines, technical rules, equity in revenue distribution and contesting closer races have been discussed and debated.
