£40 million per year and 13 teams for 2010

[Dare]

FI.com

Formula One racing’s governing body, the FIA, has revised its budget cap plans for 2010. Teams signing up for the optional cap must limit their spending to £40 million per year (£10 million higher than originally proposed) in exchange for greater technical freedom. This will not include driver salaries or, for 2010 only, engine costs.

Thirteen teams will be accepted for next year’s championship and all must apply by May 29, 2009, stating whether they wish to compete under the budget cap or not. New constructors will be eligible for a participation fee and assistance with travel expenses from commercial rights holder Formula One Management.

A new Costs Commission will monitor and enforce the budget-cap regulations. Those teams accepting the cap will be able to run moveable front and rear wings, and engines with no rev limit. They will also be allowed unlimited out-of-season track testing with no restrictions on the scale and speed of wind tunnel testing.

Other changes for 2010 confirmed for all teams include the expected ban on refueling and on the use of tyre warmers.

The full statement from the FIA:
2010 FIA Formula One World Championship

Applications to compete in the 2010 FIA Formula One World Championship are to be submitted to the FIA during the period 22-29 May 2009. Teams must state in their application whether they wish to compete under cost-cap regulations.

The maximum number of cars permitted to enter the Championship has been increased to 26, two being entered by each competitor.

The FIA will publish the list of cars and drivers accepted on 12 June 2009, having first notified unsuccessful applicants.

Cost Cap Regulations

From 2010, all teams will have the option to compete with cars built and operated within a stringent cost cap.

The cost cap for 2010 will be £40m per annum*. This figure will cover all team expenditure except:

Marketing and hospitality;
Remuneration for test or race drivers, including any young driver programmes;
Fines or penalties imposed by the FIA;
Engine costs (for 2010 only);
Any expenditure which the team can demonstrate has no influence on its performance in the Championship;
Dividends (including any tax thereon) paid from profits relating to participation in the Championship.
* For the purposes of these Regulations, the financial year is 1 January to 31 December.

A new Costs Commission is being set up to monitor and enforce these cost-cap financial regulations. The Costs Commission will consist of a Chairman and two other Commissioners, appointed by the WMSC for terms of three years.

One Commissioner should be a finance expert and the other should have high level experience in motor sport. The Chairman should have appropriate experience and standing in motor sport or sports governance. All members of the Costs Commission shall be independent of all teams.

In addition to the payments which it already makes to the top ten teams in the Championship, Formula One Management, the commercial rights holder, has agreed to offer participation fees and expenses to the new teams. This includes an annual payment of US$10 million to each team plus free transportation of two chassis and freight up to 10,000 kg in weight (not including the two chassis) as well as 20 air tickets (economy class) for each round trip for events held outside Europe.

To be eligible for this, each new team must qualify as a “Constructor” and demonstrate that it has the necessary facilities, financial resources and technical competence to compete effectively in Formula One.

To enable these cars to compete with those from teams which are not subject to cost constraints, the cost-capped cars will be allowed greater technical freedom.

The principal technical freedoms allowed are:

1. Movable wings, front and rear.
2. An engine which is not subject to a rev limit.

The teams will also be allowed unlimited out-of-season track testing with no restrictions on the scale and speed of wind tunnel testing.

Changes applicable to all teams

It was confirmed that from 2010, refuelling during a race will be forbidden in order to save the costs of transporting refuelling equipment and increase the incentive for engine builders to improve fuel economy (to save weight).

It was also confirmed that tyre blankets will be banned and that the ban on other tyre-heating devices will be maintained.

Full details plus information on further amendments to the 2010 Sporting and Technical Regulations will be available shortly on www.fia.com.

By exception, if supported by the Safety Commission, the FIA WMSC may approve the issue of the Formula One Super Licence to persons judged by the Council to have met the intent of the qualification process.

[cosworth151]

I just read on Autosport that Bernie says he's going to pony up some cash to the new teams:

Bernie Ecclestone's Formula 1 Management (FOM) has agreed to make an annual payment of $10 million to each new team as well as offering free transportation of two chassis, plus 10,000kg of freight, to each race.

It will also offer 20 economy class air tickets for each new team for events held outside Europe.

So we might have Team USF1, Lola and Aston Martin/Prodrive next year?

[Jericoke]

"Any expenditure which the team can demonstrate has no influence on its performance in the Championship"

I can already see the deep pocketed teams saying that they tested 350 different wing combinations, and none of them were good enough, therefore didn't influence performance and don't count to the cap...

I'm excited about seeing the tech limits lifted, and actually interested in seeing who can work within the budget.  I'm guessing given Brawn's early success and STR's Minardi tradition would give them the advantage.

Ferrari, McLaren, Renault and Toyota might also have an advantage, owning their own engine works.

[johnbull]

Hey guys, the FIA really does seem to be going wobbly at the knees these days.

A few days ago it was the Mc Laren judgement, and now it's this softening up of the regs.

I reckon all 13 teams will go for the capping option. It's a no brainer in my opinion.

[Jericoke]

Will this escalate driver salaries?

If Ferrari and Toyota go from a hundred million to 40 million, that's a lot of budget left over.

[SennaMan]

what a lot of cobblers!

Allowing all "capped" teams to have technical advantages is hardly a way to cut costs.

and how can any formula have two tiers?

beggars the whole concept

more like another clumsy FIA attempt to divide, control and conquer the FOTA.

expect this to be easily and smartly negotiated away by the FOTA - already WILLIAMS and McLAREN have stated their intentions to do just that

and no refueling allowed? - how will this affect the handling and tyre grip and durability with all the extra weight of fuel...........and safety on the track?

May well be a Trojan horse allowing the FIA its desire to have all GP's shortened.

[Scott]

Will this escalate driver salaries?

If Ferrari and Toyota go from a hundred million to 40 million, that's a lot of budget left over.

As I understood it, the budget cap is to INCLUDE drivers salaries...this proposal will force the teams to balance driver vs car as well.  Another reason why it is retarded.  Market forces should dictate budgets, not the FIA.  The problem is that CVC and Bernie take too much money out of the sport...without them there would be plenty around for teams and drivers both.

[Jericoke]

Will this escalate driver salaries?

If Ferrari and Toyota go from a hundred million to 40 million, that's a lot of budget left over.

As I understood it, the budget cap is to INCLUDE drivers salaries...this proposal will force the teams to balance driver vs car as well.  Another reason why it is retarded.  Market forces should dictate budgets, not the FIA.  The problem is that CVC and Bernie take too much money out of the sport...without them there would be plenty around for teams and drivers both.

Test, race and development drivers are all excluded. 

Market forces do dictate the budget though.  Brawn is only ahead because Honda put a lot of money into this year's car.  The grid has always been divided into 'haves' and 'have nots'.  If Toyota and Renault say it's too expensive, the FIA is going to listen.  If Branson and Richards say they'd like in, but at half the cost, the FIA is going to listen.  Forcing McLaren and Ferrari to race as 'have nots' makes more sense than watching them swap titles as the others pull out and the privateers shrivel.

As for the two formula approach... they do that in LeMans.  LeMans has a race in France, and the F1 doesn't.

I don't seriously expect any team to take the non capped approach.  How could a rev limited Ferrari possibly compete against unlimited Renaults and Mercedes?  The best engineers can squeeze an extra second a lap.  The best drivers another half second.  But hundreds of horsepower are going to make a difference.