Red Bull and other top teams get their way: 'F1 compensates for inflation'

Inflation hits F1

Since Russia invaded Ukraine, inflation is everywhere, including in Formula 1. Teams are spending much more money for things that were not budgeted for and this is causing problems. F1 teams work within a budget cap, but with the higher prices now suddenly becoming a difficult task for many teams to stay within it.

Red Bull Racing, Ferrari, Mercedes, McLaren, AlphaTauri and Aston Martin wanted the budget cap to be raised, but the other four teams saw this as an excuse to increase it. According to Haas, Alpine, Alfa Romeo and Williams, top teams can stay within the budget cap if they make concessions in other areas.

According to Auto, Motor und Sport F1 has found a compromise. The teams will all get compensation to compensate for inflation. It could be three million dollars, or three percent of the budget cap (140 million dollars), which is 4.2 million dollars. So this also helps the smaller teams who remain below the budget cap despite inflation.

Top teams bear the burden

The compensation does not come for free either, as the teams will hand over part of their prize money at the end of the year. This also hits the top teams harder than the smaller teams. The world champion pays 14.5 per cent of the costs, while the number ten in the championship only pays seven per cent.

In this way, the top teams have had their way with a fee that can absorb the costs outside the budget cap, but the smaller teams are not disadvantaged. They now get a bonus they can use in the hunt for the top teams.