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December 2024 Vol 9 Issue 12 ASTON MARTIN LAGONDA IS HEADED FOR DISASTER FORMULA ONE’S BUSINESS MAGAZINE SINGLE COPY US$32 • UK£25 • € 30 ANNUALLY US$260 • UK£205 • € 240 ‘ Sometimes you just don’t like somebody ’MEMORABILIA ONLINE AUCTION PT OCTOBER PT OCTOBER NOVEMBER Broad Arrow is excited to present an outstanding Swiss-based collection of over 60 helmets, most of which having been used in Formula One by well-known drivers. Highlights range from Rubens Barrichello’s race winning 2002 Indianapolis helmet to helmets used by drivers such as Jean Alesi, Daniel Ricciardo, Jacques Villeneuve, Jos Verstappen and Michael Schumacher.BusinessF1 3 TM REGULAR FEATURES Credits 4 • Letters to the Editor 4 • People Index 6 • Paddock Patter 7 • News 8 - 24 • Premature Facts 25 • Notes & Observations 26 • Lewis Webster 29 • Letter From America 30 • Motor Matters 31 • Jottings 98 COVER STORY 68 INSIGHT Lewis Hamilton shows his value 50 Formula One has a problem, a very nice problem in that Lewis Hamilton is now a big part of the currency of the sport in the same way that Valentino Rossi became the main currency of MotoGP. Hamilton was the catalyst of Formula One’s biggest ever sponsorship deal which LVMH announced last month. Next season he will explode over Italy and Ferrari. But he can’t last forever and whilst he does, the sport must enjoy his remaining years - because he is determined to. The road car that isn’t but could have 46 Derek Warwick: Never look back Peter Wheeler was TVR Derek Warwick’s autobiography, is an honest book, which certainly isn’t the case with most driver biographies, that are often self aggrandising and a literary vehicle for re-writing history. But there’s none of that here. One chapter stands out for all the wrong reasons, Written in a way only a brother could, it shows the other dark side of motor racing that for the most part is now in the past. Peter Wheeler ran TVR, the iconic British sports car maker for 22 glorious years and built it into a highly profitable sports car maker. At its peak TVR sold as many cars in the UK as Porsche and was easily Britain’s biggest maker of two seater sports cars. From 1991 onwards, TVR were the cars that everyone wanted to buy. James Hunt would be embarrassed 40 When it emerged that two rookie drivers Franco Colapinto and Oliver Bearman had both dated the same girl, it caught the imagination of new younger fans, who turned it into a love triangle it probably wasn’t. But it was enough to remember the old days when stories like this occurred every week and no one thought anything of it. RETROSPECTIVEBOOK EXTRACT Get ready for the ‘engineless’ Ferrari 36 Unperturbed by the immense problems faced by Porsche with its electric Taycan model and the huge depreciation customers are facing, Benedetto Vigna is keeping Ferrari’s new and much anticipated electric sports car on schedule for launch in 2026. FEATURE For months the rumour has been that John Malone wants Greg Maffei gone as chief executive of Liberty Media, the owner of Formula 1 Group (F1G). But Maffei is not an easy man to sack after rooting himself deeply in the organisation. After a bizarre staff meeting of F1G employees at Biggin Hill last month, insiders say that the end is near. But will Maffei, the newest master of the universe want to take Formula One with him. If he can raise $20 billion, Malone will sell it to him. ‘ Sometimes you just don’t like somebody ’ Red Bull Racing have shown off the Red Bull RB17, but has it failed before it’s even turned a wheel in anger? Its critics certainly think so. Although motoring journalists across the world have greeted it with enthu- siasm. So what’s the truth? 88 80 Heading straight for disaster 32 Lawrence Stroll has had a real success with Aston Martin Racing on the balance sheet, if not the track and he has probably trebled his partners’ investment in five years. But the opposite is occurring at the sports car manufacturer, Aston Martin Lagonda. The home of sexless puritanism 56 Formula One changed when Formula 1 Group’s very own Oliver Cromwell, Ellie Norman banned glamour girls from the F1 grid. At the time she was on the right side of history, but now times have changed again and even the Walt Disney Company is raging against the seemingly relentless march of what is called ‘sex- less puritanism’ that has overtaken modern society. 62 The men of quality4 BusinessF1 EDITOR-IN-CHIEF Tom Rubython CONTRIBUTING WRITERS Thomas Gibson, Oliver Edwards, Jo Maxwell, Lewis Webster CHIEF CREATIVE DESIGNER & PHOTOGRAPHER Alexander L. Sargent EDITORIAL ASSISTANT Emma Blakey PHOTOGRAPHERS Darren Price, Jeff Custard WEB EDITOR Brad Dias CHIEF STATISTICIAN David Hayhoe VICE PRESIDENT - LOGISTICS David Peett EDITORS AT LARGE George Roberts, Andrew Frankl, Stefan Johansson GLOBAL AMBASSADOR Maprang Suwanbubpa FINANCE MANAGER Alex Rogers SUBSCRIPTIONS CO-ORDINATORS Daisy Macedward, Roger Smith BusinessF1 Magazine is published by BusinessF1 Magazine Ltd, Billing Wharf, The Causeway, Cogenhoe, Northampton NN7 1NH, United Kingdom Tel: 00 44 (0) 1604 698881/2 Email: editor@businessf1magazine.com Website: www.businessf1magazine.com December 2024 Volume 9 (Issue 12) BusinessF1 is published on the last Friday of every month. Title is copyright of BusinessF1 Magazine Ltd. F1 element is a recognised trademark of Formula One Licensing BV. Printed in Europe NEXT PUBLICATION DATE: The January 2024 issue of BusinessF1 Magazine is published on 10th December 2024. SUBSCRIPTIONS: Available for 12 months (12 issues) at a cost of US$280, UK£220 and €260 delivered anywhere in the world at no extra charge. Subscriptions can be ordered at www.businessf1magazine.com EDITORIAL COPYRIGHT:The contents of this magazine, both words and statistics, are strictly copyright and the intellectual property of BusinessF1 Magazine Ltd. Copying or reproduction may only be carried out with the written permission of the Publishers, which will normally not be withheld on payment of an agreed fee. ARTICLE REPRINTS: Many articles published in BusinessF1 Magazine are available as reprints by prior arrangement with the Publishers. Nor- mal minimum run for reprints is 100 but smaller quantities can be accommodated. Please con- tact David Peett - Vice President of Logistics. Innocent until proven guilty Dear Tom, I read the latest article ‘Meltdown at Milton Keynes’ in BusinessF1 November 2024 Vol 9, No 11, with growing unease. Whilst clearly there have been some serious allegations made against Christian Horner, I am a firm believer in the principle of “Innocent until Proven Guilty”, and I just wonder if this piece is really appropriate. I have no insight into the inner workings of Red Bull Racing in terms of this issue, but I am aware that Mr Horner has been exonerated twice now, and as such this mostly re-run March piece (post subsequent management resignations) has something of a tabloid/ trial by media feel about it, which I believe is best left to lesser publications. This repeated hounding of an individual who has become one of the most successful team principals in Formula One (although this would never excuse bad behaviour) seems overdone in a business focused publication, and I am sure I am not the only person who is wondering how much additional trauma articles such as this are subjecting Mr Horner’s family to, as well as the workforce at Red Bull Racing, and indeed, Miss Hewitson. Far too often these types of stories are taken at face value by the public, which is dangerous for all involved in my humble opinion. Surely the editorial skills of BusinessF1 would be better spent on BF1’s core competence - the business of Formula One. I would also question the need to produce four pages on the fact that Ralph Schumacher is now in a “committed relationship” with his manager, who happens to be a man. Frankly, I couldn’t care less. Yours, Richard Cooper. Managing Director Cooper Racing Ltd Slaughter Ghyll Farm Crowborough TN6 3ST, United Kingdom The editor replies: Richard, of course, makes some very good points. But there is so much more going on that we cannot write about and unfortunately, we cannot even tell you why we can’t write about it. The story has now directly spilled over into the performance of the team, which of course makes it current. It’s amazing how something, quite small in itself, can morph into something so big, potentially affecting world championships and hundreds of millions of dollars. From day one this has been the most astonishing story and there is much more to come, but whether we will be able to report it or not remains to be seen. On Ralf Schumacher Richard is probably right again but the story really focused on what a big deal this story was in Germany because both Mr and Mrs Schumacher were very big celebrities. Unfortunately, this is my job to report to the reader what is occurring in Formula One on every front, bar the actual racing on the track. If I avoid the uncomfortable stories, what use am I? And remember, journalists rank only just higher than real estate agents at the bottom of respect for professions. It’s just what it is. No one can surpass Forghieri Dear Tom, Please do not publish this letter, although I know you will. (My lawyer advised me to write that). I’m enjoying the online edition. Thank you, although it’s not as satisfying as reading a true magazine. If you are well enough, or simply need a shove, you might wind yourself into action about Paddock Patter where he refers to the Valkyrie and Newey ‘never being surpassed’. Well, I’m not sure one can be surpassed before your achievements, but undeniably the greatest designer of race cars was, and remains, Mauro Forghieri. He not only designed the tin or carbon bits, as Newey did, but the engines and gearboxes as well. No contest then. Oh, and in his time he dabbled with such Ferrari sports cars as various Le Mans winners and the hallowed GTO. Adrian has some catching up to do. Yours, David McLaughlin President Federation Internationale de Automobile Bahamas Branch Nassau The Bahamas The editor replies: David makes an excellent point. Not only could Mauro Forghieri design the chassis and every component within it, he could get on the lathe and make the parts as well. And that’s before he designed the engine and gearbox and set about making them as well. David is right, despite Adrian’s immense achievements, his skills don’t compare to Forghieri’s. Anyway when can I expect the writ from your newly acquired lawyer? Or perhaps I should sue you for exposing my obvious inadequacies. The trouble with editing this magazine is that the readers are so damn clever. And demanding. Empathic win Dear Tom, Congratulations to my friend Ken Bates who has emphatically won his libel case against you and been awarded six figure damages in the High Court. You also libelled me with an article in Business F1 magazine. We were advised you could not afford to pay damages. Yours, William Storey Chief Executive Rich Energy Via X: @richenergyceo The Editor replies. William Storey is quite right. We wouldn’t have been able to afford to pay him damages, so it was probably a wise decision, of course assuming Mr Storey could afford the legal fees, which I am sure he could. Probably three quarters of a million dollars to get through to trial. William Storey and Ken Bates are friends.A Agag, Alejandro76 Alboreto, Michele20 Alboreto, Noemi20 Alonso, Fernando17, 31 Andretti, Michael71 Antonelli, Kimi29, 54 Arnault, Bernard51, 52 Ascari, Alberto20 Asher, Lauren44 Austin, Herbert80 B Baenziger, Andreas23 Balestre, Jean-Marie75 Bamford, Robert80 Barlow, Jason49 Barros, Carmelo Sanz De24 Bartra, Marc17 Bearman, Oliver40-45 Bechem, Tilman93 Benson, Andrew8 Ben Sulayem, Mohammed8, 9, 14, 21, 24, 45, 98 Bentley, Walter80 Binotto, Mattia8, 9 Birbeck, Jane42 Bleekemolen, Jeroen19 Boeri, Michel58, 61 Bratches, Sean58, 71, 74 Brawn, Ross97 Bridges, Bill91, 92 Brown, Zak26, 94 Bruckheimer, Jerry55 Brundle, Martin25, 29 C Calkin, Jessamy44 Carcasci, Paolo91, 92 Carey, Chase71-75 Carter, Graydon43 Chapman, Colin80 Chapman, Gary55 Chaves, Pedro91 Clancy, Rebecca11 Codling, Stuart23 Colapinto, Franco29, 40, 44, 45 Cooper, Jilly56 Corbett, Humphrey97 Cosman, Henning34, 35 Costelloe, Paul43 Courtenay, Will29, 63 Coyne, Dave93, 97 Cromwell, Oliver56 D Damiani, Angelo Sticchi20 Dane, Roland89, 95 Davidson, Anthony25 Dean, Richard93, 94 Deckers, Aaron98 Dennis, Ron53, 75 Domenicali, Stefano20, 29, 56, 70, 72, 73 Doran, Paul94 Duckworth, Keith18 E Ecclestone, Bernie25, 29, 40, 61, 71, 72, 74, 75, 96 Ekblom, Fredrik93, 97 Elliott, Jason90, 97 Ellis, Tim58 Emanuel, Ari21 Ezpeleta, Carmelo70, 73 F Famin, Bruno18 Favre, Philippe91 Ferrari, Enzo80, 85 Fisch, Oliver24 Florsch, Sophia11 Floyd, George19 Frankl, Andrew31 Frankl, Nicholas17 Fry, Pat8 G Gamble, Adrian97 Garcia, Marta11 Gash, Charlotte59 Gay-Rees, James61, 71, 72 Gervais, Ricky98 Gibson, Mel98 Gilbert-Scott, Andrew91 Goodell, Roger58 Green, Chloe15 Green, Sir Philip15 Green, Tina15 Grimaldi, Prince Albert15, 17 31 Guersent, Olivier72, 74 H Haffa, Thomas75 Hallmark, Adrian13, 32,34 Hamilton, Lewis19, 30, 50-55, 58, 60, 75, 90 Hamlin, Mark19 Hawkridge, Alex97 Head, Patrick43 Hegel, Georg77 Hewitson, Fiona12, 14 Hill, Damon91, 92 Hockenhull, Ross91 Hodge, Gavanndra54 Horner, Christian12, 14, 19, 21, 23, 26, 46, 47, 49, 62, 64, 67, 71 Höttinger, Markus97 Hughes, Damien26 Hughes, Mark97 Humphrey, Jake26, 31 Hunt, James40-43, 45 J Jagger, Mick49 Jiménez, Melissa17 Johnson, Joan98 Jones, Chris95 Jones, Kim52, 54, 55 Jordan, Eddie90, 91, 92 K Kamelger, Dr Florian23 Kelleher, Cameron24 Kenyon, Adam8 Kim, Vladimir10 Kirch, Leo75 Kirchmayr, Alexander63 Klopp, Jurgen19 Knowles, Steve21, 29 Komatsu, Ayao22 Krief, Philippe18 Kromadit, Vikrom65 L Lafferty, Doug34 Lambiase, Gianpiero21, 29 Langdhara, Bhavana65 Langinier, Estelle40, 45 Lauda, Niki16 Lawson, Liam23 Leclerc, Charles41, 44 Lee, Duncan91 Lilley, Martin80, 82, 83, 84 Long, Camilla56 Lucas, George55 Lyons, William80 M Macdonald, John92 Mac, Johnny91 Mackenzie, Donald71 MacLeod, Peter91 Macmillan, Harold62 Maffei, Greg10, 68, 70, 73, 74, 76, 78 Magness, Bob77 Malhamé, Alessandra17 Malone, John55, 68, 71, 76 70, 72-78 Malone, Leslie77 Manning, Estelle40, 45 Mansell, Nigel91, 95 Markle, Megan55 Marko, Helmut12, 21, 23, 31 Marshall, Rob63 Martin, Paul71 Mateschitz, Dietrich25, 46, 47, 62-67 Mateschitz, Mark63, 64, 67 Mazepin, Dmitry10 McGuirk, Terry74, 78 McKenzie, Donald75 McLean, Stephanie42 McNally, Patrick29 Meo, Luca De10, 18 Mészáros, Sándor22, 98 Metcalfe, Harry87 Middleton, Chris97 Miller, Ben39 Mintzlaff, Oliver19, 62, 63 Montezemolo, Luca di52, 75 Mooneesamy, Jaysha8, 9 Morecambe, Eric75 Morris, William80 Mosley, Max9, 25, 31 Moss, Sir Stirling41, 42, 43 N Newey, Adrian21, 26, 31, 46, 47, 48, 63 Newey, Harrison48 Norman, Ellie56-58, 60, 61 Norris, Lando25 O Oakes, Oliver10, 26 Ocon, Esteban22 Ogilvy, Estelle40,-45 P Parlour, Tammy60 Parsons, Richard97 Pascoli, Julie17 Pelling, Rowan56 Pironi, Didier93 Pitt, Brad55 Pope, Lauren-Jade59 Prazer, Emily20, 22 Pyne, George76 R Ratcliffe, Sir Jim15 Rawsthorn, India43, 44 Redaelli, Giuseppe20 Riccardo, Daniel31 Ricciardo, Daniel23, 44, 72 Riley, Daniel51 Rindt, Jochen97 Robertson, Steve90 Robyn, Natalie24, 98 Rolls, Charles80 Royce, Henry80 Russell, George30 Rutledge, Elizabeth22 S Sainz, Carlos40 Sargeant, Logan29 Schumacher, Michael16 Schumacher, Mick29 Senna, Ayrton16, 53, 55, 71, 96 Sergeant, Logan40 Sheene, Barry42 Sievers, Nicole45 Skipper, Luke24, 98 Smolenski, Nikolai80, 86 Sodsri, Noklek65 Stanichi, Roberto20 Stoddart, Paul61 Stringfellow, Scott89 Stroll, Lawrence13, 26, 29, 33, 35 Sutton, Keith98 Swift, Taylor44 Synge, Robert91, 95 Szafnauer, Otmar26 T Takahashi, Tomoya22 Thow, Penni55 Todt, Jean9, 73, 97 Tremayne, David97 Tsunoda, Yuki23 Turner, Phil21, 29 V Vasseur, Fred18 Vermeulen, Raymond12, 29 Verstappen, Jos12 Verstappen, Max12, 19, 21, 25, 26, 29, 31, 90 Vettel, Sebastien44, 60 Vigna, Benedetto18, 26, 36, 37, 38, 39 Villarreal, Alberto24 Villeneuve, Gilles97 Vowles, James8, 9, 29, 40 W Wache, Pierre21 Walkinshaw, Tom49 Warwick, Derek88, 92, 94, 97 Warwick, Paul88-97 Waters, Glenn92 Watzlawick, Franz63 Westby, Michelle59 Westwood, Julian93 Wheatley, Jonathan21, 29, 63 Wheeler, Peter80-87 White, Rob18 Whitesell, Patrick21 Whitmarsh, Martin53 Wilkinson, Trevor82 Wills, Kate42, 43, 44, 45 Wolff, Toto12, 15, 29 Wolverson, Richard21, 29 Woodward-Hill, Sacha73 Y Yoovidhya, Chaleo62, 63, 64, 65, 66, 67 Yoovidhya, Chalerm62, 63, 64, 65, 67 Yoovidhya, Daranee65 6 BusinessF1 PeopleIndex The January issue of BusinessF1 is published on Friday 10 th December 2024Tom Rubython Editor-in-Chief Editor’s Letter 77 BusinessF1 This magazine has been critical of Lewis Hamilton in the past as he has attempted to turn himself from a racing driver to a music artist, a fashion designer and film producer. We have never liked him playing the race card, especially as he became the most popular driver the sport had ever seen; it didn’t compute. But suddenly he has come good and that past criticism can now be viewed as misconceived, or rather no longer relevant. It is becoming increasingly obvious that Hamilton is now a very valuable commodity to the sport of Formula One in much the same way as Valentino Rossi was to MotoGP for so many years. It has just emerged that Hamilton was the catalyst for the billion dollar 10-year deal Formula 1 Group has just signed with LVMH. He is an immensely popular figure with sponsors and fans, and wilder estimates say he puts 50,000 on the gate of the British Grand Prix very year – Silverstone depends on him. In fact Formula One depends on him as much as it does on Netflix’s Drive to Survive . Aston Martin Lagonda rushed out a profits warning at the beginning of October with yet more bad news. It was a sad debut for Adrian Hallmark, the new chief executive, who simply hasn’t been used to such unpleasantness in his previous role at Bentley. But why didn’t the company tell the truth and admit sales had taken a downturn, because it was as simple as that? Instead, Hallmark trotted out a load of complete nonsense about parts suppliers failing to deliver parts, and therefore production was being cut from 7,000 cars to 6,000 cars this year to allow for it. In truth, Aston Martin will sweat to sell 6,000 cars in 2024. Instead of this rather inconvenient truth, Hallmark babbled his own nonsense such as “a strategic realignment” of its 2024 volume targets and words such as “smooth the cadence” in future quarters. I actually had to refer to multiple dictionaries to find out what “smoothing the cadence” meant. I like Adrian Hallmark. I’ve only met him once and he immediately impressed me. But he needs to be his own man and toss out the nonsense of the past, otherwise a glittering career may end up on the scrapheap. The Formula One team principals’ press conference, held on the Friday before a Grand Prix weekend, is fast becoming an embarrassment to the sport. What used to be a forum for lively free wheeling discussions between Tom Clarkson and his guests are now boring and tedious and instantly forgettable as soon as the journalists have left the room and the TV cameras have been turned off. They have been sanitised so there’s no controversy and no one gets upset. Even as Zak Brown hammers into Christian Horner and he hammers back and Toto Wolff gets in on the act, it is all done very politely. Whereas in the past at least one good story would emerge from the press conference from an inadvertent response, or slip of the tongue, some modern day misspeaking, and heaven forbid some rubbish taking, now there is nothing but platitudes, to the point where I have stopped reading the transcripts. The truth is that all the good stuff is now being saved for Netflix and Drive to Survive . Oh how powerful that programme has become. News BusinessF1 8 Audited accounts show smallest team couldn’t restrain its spending and exceeded cost cap by $46 million without penalty A ccording to reports, the Formula One Cost Cap, introduced in 2021, is to rise by 60 percent in 2026 from the current $135 million to $215 million plus extras. The uplift has apparently been approved by the World Motorsport Council of the Federation Internationale de L’Automobile (FIA WMSC) meeting in October. FIA President Ben Sulayem is thought to have recommended the urgent change after reports that the Cost Cap is being flouted by virtually all of the teams, including the smallest team, Williams Racing. The credibility of the Cost Cap faces huge problems after the 2023 audited accounts of the parent company of the Williams F1 team were published on 2nd October 2024. The audited statutory accounts of Williams Grand Prix Engineering Ltd showed that the team had revenues from sponsorship, prize money and other sales of $165 million and lost a further $104 million, making its total cash spending during the year $269 million. The Cost Cap allows Williams and the other nine teams to spend $135 million plus $10 million of extras, a total of $145 million, meaning Williams overshot by $134 million. There are a host of exemptions but even after deducting the maximum possible exemptions, the team still overspent by $46 million. There are eight principal exemptions: (1) Driver Salaries allowing teams to pay their drivers unlimited retainers without affecting the cost cap. (2) The three salaries of the team’s three highest-paid employees, excluding drivers. (3) Marketing and hospitality expenses, including fan engagement. (4) Capital expenditure, which has its own rules. (5) Teams that manufacture their own engines can deduct costs related to engine development. (6) Travel and accommodation, including flights and hotels and subsistence for staff attending races. (7) The cost of young driver programmes is excluded. (8) Miscellaneous expenditure, such as maintaining heritage collections. The eight exemptions allow Williams Racing to exclude a sum believed to be around $78 million from its allowed $145 million including extras, giving it a total spending limit of $223 million. The extra spending of $46 million is not easily explained and it is doubtful the FIA auditors had any knowledge of it. Some explanations are possible: Williams does not have any driver salaries as all its drivers are externally sponsored. But it is likely that the team is receiving the income and then paying its drivers separately, getting a legitimate cost cap exemption that could be as high as $20 million. The three highest paid staff at Williams are likely to be James Vowles, Pat Fry and Adam Kenyon, who are on salaries of between $3 and $4 million each, a total of $12 million. Williams is believed to be spending around $750,000 at each race on marketing and hospitality, adding up to $18 million, and another $500,000 Cost cap to rise by 60 percent after Williams bursts through it in 2023 Andrew Benson has revealed Audi will get exemptions under a new ‘variable cost cap’ from 2026. Jaysha Mooneesamy, Williams’ head of finance is ultimately responsible for the team’s submissions to the FIA auditors for the costcap President Ben Sulayem has quietly got the approval of the FIA World Motorsport Council to raise the Cost Cap to $215 million plus extras from 2026. Matia Binotto has secured a potential extra budget of $20 million a year from the ‘variable cost cap’. News BusinessF1 The Formula One Cost Cap is a new financial regulation introduced by the Fédération Internationale de l'Automobile (FIA) to level the playing field among Formula One teams and ensure financial sustainability. Former FIA president Max Mos- ley tried to introduce a cost cap 25 years ago but was thwarted as he could not see any way to enforce it. Concerns about the sport’s escalating costs and the finan- cial instability of smaller teams made the need for financial regulation more urgent by the mid-2010s. In 2019, the FIA, under new president Jean Todt and strong encouragement from Formula One’s new own- ers, Liberty Media, announced the Cost Cap to be introduced in 2021, initially set at $145 million per team, covering most operational expenses like car development, parts, and track activities, but excluding driver salaries, marketing and other costs. The Cost Cap principally aimed to curb spending and increase competition by limiting the financial advantage of the top three teams, then Red Bull Racing, Mercedes-AMG and Scuderia Ferrari. The cap was reduced to $140 million in 2022 and further to $135 million in 2023, with adjustments made for inflation and exceptional circumstances. This incremental reduction was meant to gradually bring teams closer to parity. Penalties for breaching the cap range from fines to sporting sanctions, such as point deductions or restrictions on testing. Only Red Bull have ever been penalised for minor breaches in 2021. The history of the FIA Cost Cap 9 on each race on travel and accommodation, a total of $12 million. Capital expenditure depreciation and amortisation is listed at $16 million in the audited accounts. Expenditure on the driver academy is also a legitimate deduction at around $15 million a year. Miscellaneous expenditure such as maintaining its heritage collection of cars and other deductions probably amounts to around $5 million of legitimate exemptions. It means Williams can legitimately claim $78 million of its spending is outside of the Cost Cap, giving it a maximum possible spend of $223 million, meaning it has overspent by around $46 million. On the surface, it appears that Williams Racing has presented the FIA auditors with a completely different set of figures from its audited accounts. And it appears that there’s nothing that the FIA can do about it, as the 2023 FIA audit has been completed and signed off. Williams has been given a clean bill of health by the FIA. Williams’ head of finance, Jaysha Mooneesamy, seems to have found a legitimate way to hide at least $46 million of spending from the FIA’s auditors. But Mooneesamy is not alone. Examining the accounts of all the other Formula One teams, excepting Sauber, RB and Haas, who have found other legitimate ways around the Cost Cap, the other six teams are overspending by similar proportions to their income. Observers believe that only McLaren Racing is keeping with the spirit of the Cost Cap, but seeing how other teams are behaving, it is rapidly changing its approach to remain competitive. As many as 300 accountants are being employed by the ten Formula One teams to manage the Cost Cap process, but the declared aim of keeping overall teams’ costs down to $200 million a year including deductions has utterly failed according to one current team principal, who points to the lavish spending at Aston Martin Racing as a prime example of what has gone wrong. Two team principals have previously admitted in off the record conversations that the Cost Cap is a farce. One team principal commissioned his own forensic review of what Aston Martin Racing was spending and concluded it was twice as much as the $145 million allowed. One astute observer of the Formula One paddock, currently working at a start-up team, says that Red Bull Racing and Mercedes-AMG are spending at least $150 million more than the official figure. He said tellingly: “Ron Dennis admitted 30 years ago that McLaren was spending $1 million a day on Formula One. According to the FIA that figure has not changed in 30 years. It doesn’t add up.” Scuderia Ferrari, whose Formula One operation is on the same site as its car making factory and operates facilities for HaasF1 on the site, is almost impossible for the FIA’s auditors to monitor. It also launched a WEC team with the express intention, as one team principal put it, “to muddy the waters.” The FIA Cost Cap has failed in its objective to realign the grid and allow smaller and less well- funded teams to compete with the well-funded teams. The cost cap has been running for four seasons and the same three teams, with the addition of McLaren Racing, are dominating the series. The latest decisions by the FIA World Motorsport Council indicates that the FIA is taking positive steps to resolve what it must know are glaring examples in the way teams are flouting the Cost Cap. The increase from $135 million plus extras this year to $215 million plus extras in 2026 will go a long way to resolving some of the problems. There will also be exemptions for teams operating in countries with higher-than-average costs of living. The exemption will mainly apply to the Audi team, which has its factory in Switzerland, where the cost of living is substantially higher than the rest of the world. The difference is now around 40 percent, according to reports from the Organisation for Economic Co-Operation and Development (OECD). As a solution, Audi is likely to be handed an extra $20 million to spend according to Mattia Binotto, the team’s chief technical and operating officer. There is some strength to Binotto’s arguments. The average salary for Formula One team employees is said to be $117,200, but at Sauber it is $161,500. Binotto has said that it is not possible for Audi to compete in Formula One without the extra allowance. The BBC’s Andrew Benson, one of the best informed journalists in Formula One, first reported that the FIA WMSC had approved a rise in the Cost Cap budget in from 2026. He said that the World Motorsport Council has already approved what he called a “variable budget cap”, which he revealed has been under discussion for two years and is hoped to give more of a level playing field financially across all ten teams. Benson is adamant that the WMSC has approved the variable budget cap from 2026, although he did point out that all the teams excepting Audi are against it and will oppose it. Other sources have told BusinessF1 that there are probably only three teams operating legitimately within the Costs Cap and they are Haas, RB and Sauber. James Vowles’s first year in charge at Williams has seen the team exceed the Cost Cap by a minimum $46 million but escape any sanctions or punishment. Williams’ FW46 car is likely to exceed the Cost Cap in 2024, as the team did in 2023. Max Mosley tried to introduce a Cost Cap during his presidency of the FIA and failed. Jean Todt introduced the FIA Cost Cap during his presidency of the FIA.Next >