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Cost Of F1 Success: High-Spending Teams Get Budget Cap

New regulation introduced for fairer competition among Formula One teams


What's going on?

Formula One races are always a spectacle to behold. Cars zoom around the track at incredible speeds in shows of skill and control on the part of the drivers. However, in the past years, a trend has emerged, which clearly shows that the money spent by the team directly affects its placing. In the abstract, this makes sense; a wealthy team can afford research into better materials and parts as well as more testing. Therefore, this leads to a gap in the placements during an F1 race, which makes it harder for the driver’s skill to compensate.


Hence, race organizers have decided to implement a budget cap in the 2021 F1 season along with other changes to encourage more competitive racing. Mercedes as the highest budget team has been back-to-back champions from 2014 to 2019, and it is made possible because they are willing to outspend the competition. Mercedes spent a total of $484 million in 2019, which is double than the spending of most F1 teams this season. The list continues with Ferrari at $463 million, Red Bull at $445 million, and Renault at $272 million. As shown, the gap is evident between the spending of the Big 3 and Renault.


However, the new regulation wasn’t well accepted by some of the bigger teams, and they have protested against the changes resisting against throwing away their mighty advantage. Should F1 successfully navigate through these challenges, the series will now have a chance to reinvigorate the sport with far more exciting and competitive races. The series’ CEO also claims that multiple prospective teams are already considering entry into the sport in 2021.


Formula One’s Most Valuable Teams: Ferrari And Mercedes Gain Ground Amid A Cost-Cutting Tug-Of-War