F1 2023 salary cap explained: F1 is at the top of the motorsport pyramid and is one of the most expensive sports in the world. The great teams mainly dominate the world of F1. F1 has made some radical changes to the finances of the sport. The changes are aimed at making the sport more competitive and providing a level playing field.
Read on to catch up on the new financial rules implemented in Formula 1.
What is a cost limit?
A cost cap is a device created to limit the spending of F1 teams in a calendar year. How does this affect the teams you ask? The amount of money a team spends directly translates to the performance of your car. Currently, there is a huge gulf in spending between teams that this rule aims to bridge. The cost cap is also aimed at reducing sport spending that has increased exponentially over the years.
The cost limit is for a 21-race regular season. Each additional race will have an additional $ 1 million allowance for each race. The figure will also be reduced if the number of races in a calendar year is less.
The cost cap was initially set to debut in 2020, but the COVID pandemic derailed F1’s plans.
Equipment cost limit
The teams have been imposed with a salary cap of $ 145 million. The cost cap will be lowered by $ 5 million each year for the next three years. This is to ensure a smoother transition for larger teams to spend less money.
This allows smaller teams to catch up and compete with elite teams. The pandemic has also forced the FIA to regulate the finances of the sport, which took a major hit on revenue.
F1 salary cap 2023: Potential driver salary cap
The discussion about a possible salary cap for Formula 1 drivers continues, although it has not been carried out or implemented. The current cost limit does not include the driver’s wages and other expenses such as travel and accommodation.
Rumors are that it was discussed that the F1 driver’s salary cap would be set at $ 30 million. The limit would include the main driver lineup and potentially even the third driver.
The cost cap will bring more wheel-to-wheel action, which sports fans crave. This also excites the smaller teams that now have a better chance to compete in the sport.