Why does Formula One need cost capping?
Formula One faces a period of great uncertainty during this harsh recessionary period. Funding a team is increasingly seen as a discretionary spend for the majority of team owners and sponsors. To ensure a healthy grid all are agreed that costs need to be cut. Two main philosophies have emerged, either i) reduce activity levels through very restrictive technical rules, plus a degree of standardization if required; or ii) restrict the money that teams are allowed to spend (cost capping). The FIA believes that unfettered technical competition is part of Formula One’s DNA, and would like to see this flourish, but in an environment of strong, responsible and innovative management, not a spending race. For these reasons cost capping is preferred. What is covered by the cost cap? Everything except: • Marketing and promotion – we want Formula One teams to look good and to entertain their partners. We want manufacturers to show off their cars at exhibitions and city centre displays, and we wan
