The CEO of Formula 1, Chase Carey, has said that a cost cap is the main reason preventing new teams from breaking into the sport.
A $175m cost cap has been agreed for 2021, which does not include the costs associated with driver salaries and marketing; the figure is fixed and will not be a discussion point during negotiations about future rules. Additionally, there will also be a redistribution of income.
Carey said it has been made clear to him in talks with potential new entrants that the sport must provide a good business model.
“Clearly one of the goals in terms of the cost cap is to create a healthier sport,” he said, during a phone conversation with Wall Street analysts.
“We’ve talked about the competitive goals, but it is equally important that the cost cap creates a business model that is healthy and growing and positive for our existing teams, and potential new teams coming into it.”
He added: “That has been enforced as we’ve had discussions with potential new teams. All have looked at steps in terms of cost discipline, and probably a more balanced revenue distribution as being cornerstones to creating what they think is an exciting opportunity.”
Carey stressed that although some are sceptical about the idea, existing competitors are backing a spending limit.
“One of the real positives is the evolving attitude towards it. We feel quite positive about where we are with the cost cap. In many ways teams, some of whom had issues or concerns going in, are increasingly supportive.
“By and large right now the support is quite broad, I think everybody believes it’s an important element to the future of the sport, so I do think of the support it’s built, and the teams really are behind it, as being an important cornerstone to building the sport going forward,” said Carey.
He added that he has been assured that the FIA and F1 will ensure the cost cap is enforced.
“We wouldn’t have done it if we didn’t think it was enforceable. There’s no reason to head down a path.
“You can account for everything, what you really need to make sure is that you have access to the right information to do the accounting, and that’s just about us being disciplined and firm about what we need,” he said.