Mercedes executive director Toto Wolff says a mooted cost cap of $150 million for Formula One teams in 2021 is “not achievable” but is close to being realistic.
Wolff told Sky the suggest cap would not apply to some significant cost areas.
“The number needs to be seen in perspective because marketing is excluded, drivers are excluded, foreign currency exchanges are excluded [and] lots of other activities,” he said.
“So that number, per se, is much too low for the big teams. But if you look into the detail I think we need to work with Liberty and find a compromise. That number will not be achievable. But maybe something sensible, we are all living in the same financial reality.”
Mercedes is one of Formula One’s biggest teams and would be among those hardest hit by a cost cap. But Wolff said the realistic impact of the cap would not be as high as it first appears.
“I think when you add all the extra bits that are being excluded you are probably at a number that is much higher than 150. Probably 250. And then it doesn’t look so crazy any more.
“But my utmost priority is protecting our structure and our people. We have to consider that we have invested in the sport, we’ve been here for a long time. Same with Ferrari and Red Bull and some of the bigger structures.
“You just need to lay it out and say this is our situation, how can we achieve a successful Formula One, how can we cap the costs, how can we achieve a sustainable business model without having any hardship on anybody.”
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Gigantor (@kbdavies)
6th April 2018, 18:45
This is simply a pantomime. EVERYONE knows 150Million is not achievable – even Liberty themselves. After all, Ross Brawn was once a team principal operating at the sharp end.
“Let’s stat really low, then we can negotiate upwards and finish somewhere therein”.
They are all merely simply playing to the public forum on this issue.
Patrickl (@patrickl)
6th April 2018, 20:22
@kbdavies Everyone who read the article knows there is a lot not accounted for in that 150 million and that it’s not that far off from what IS achievable.
Jay Lashua
6th April 2018, 18:53
Why is he even talking about “doing work for the PU” ? The PU manufacturing should be a completely separate entity concerned solely with the design and manufacture of the PU. How does Toto even put such a statement together? The implications are *quite obvious*
Patrickl (@patrickl)
6th April 2018, 20:24
Says who?
When people say Mercedes and Ferrari have the biggest budgets they also include the 100 million or so they spend on engine development.
Michael
6th April 2018, 19:06
The maximum spend is not really the issue. Mecedes and Ferrari are not bankrupting themselves by spending so much and that money all flows from the motor racing industry. The minimum costs to compete should be reduced so teams can survive and potentially grow. A full grid is 26 cars yet the only time in 20 years we were due to have that 1 team folded before the season started… Now we’ve been at 20 for a couple of years
Michael
6th April 2018, 19:06
To the motor racing industry, not from…
fast
6th April 2018, 21:59
+1. agree, a reasonable budget number where a team can race and be competitive without stress. though, as in bernie’s time also, team’s get crazy and over-spend over the delusions that after a couple of seasons they could be as competitive as Ferrari or Mercedes. That’s what they need to cap, the egotistical expectations of grandeur. vj mallya has bankrupted himself to the ground, by building a team from the ashes of a former winning team, that now at best will only ever finish in fourth place. gene haas might be next. tony Fernandez fled years ago because, as an accountant, he realized better than most — where’s the value in that??
Esploratore (@esploratore)
7th April 2018, 4:05
Btw, is 20 the smallest grid there’s ever been? For a whole season ofc.
Bleu (@bleu)
7th April 2018, 6:14
Mostly mid to late 1960s had smaller grids.
Kenny Schachat (@partofthepuzzle)
6th April 2018, 21:29
the o thing that Toto has stated (not in this article) is that one of their most important goals is to be able to keep their current team (1500!!) employed. That is a nice thought but is 100% unrealistic. There can’t be cost reductions without some layoffs. I don’t wish this on anyone but Mercedes can’t hold F1 responsible for maintaining their own absurdly huge team.
fast
6th April 2018, 21:46
while they appear to have made a breakthrough on prize money by adding another column of revenue for the mid-field backmarkers (mostly at ferrari’s expense), the budget cap concept needs delineation between a racing team, a manufacturer, an engine supplier, soft-drink company, tool company, etc. in the nfl, for example, a budget cap works because all teams are actual teams yet it doesn’t work because they all play in different markets, with different revenue potential. this is where an equalization method can be modeled from, yet as they have already outlined the prize fund structure – frankly, good luck.
@HoHum (@hohum)
6th April 2018, 22:46
Creative accounting, Toto. MB might have to buy their engines in from, say, AMG, hope they can get a good deal.
mrfill
7th April 2018, 2:29
Totobabble…
“we’ve been here for a long time”
Well, you’ve been here with a team for longer than Haas, that’s all.
Esploratore (@esploratore)
7th April 2018, 4:07
Probably means as a supplier, mclaren mercedes for example, they’ve been around a long time.
Joss (@racerjoss)
7th April 2018, 13:53
The good news is that Ross Brawn used to run that team, so he’s a good judge of what budget a leading team can run to. Mercedes have a vested interest in keeping the budgets high, so this is a predictable response.