No easy solution to F1 salary cap debate

F1 launched its first team budget cap in 2021 after a big push by the FIA and the commercial rights holder to make the series more financially sustainable.

Teams were limited to spending $145 million under the budget cap last year before the figure was cut to $140m for the current season. It will fall by a further $5m next year, although there is an ongoing debate between teams about the impact of inflation and the current global climate.

This figure has a number of exclusions including driver salaries, but discussions have been ongoing for some time about the possible introduction of a separate cap that would cover the salaries of drivers and other key personnel.

Ferrari F1 chief Binotto said it was a matter that had recently been discussed by the teams, but he warned there was “not a straightforward solution, especially for the drivers’ salary cap”.

“We are discussing it and trying to understand what can be a solution,” Binotto said.

“It will not be in the short term, the reason for that is we already have contracts in place, and we cannot simply breach them. There are legal implications, to understand how to do that, so it’s a discussion.

“It’s an important one, we understand it and we recognise it will take time, but certainly we will go through the process.”

2023 was initially identified as a year where the salary cap could come into place, but a number of drivers have contracts in place that go far beyond this date. Charles Leclerc is tied in at Ferrari until the end of 2024, while Red Bull’s Max Verstappen has a bumper deal that runs all the way to the end of the 2028, reportedly worth up to €50m per year. 

Red Bull team boss Christian Horner thought the motivation behind a salary cap was “well-merited” but the “application of it is tricky”, and warned against F1 becoming “an accounting world championship”.

“There’s an awful lot of…