US businessman John Malone, whose Liberty Media group is currently in the process of a takeover of Formula 1, plans on implementing a budget cap in the sport, according to a business report in The Telegraph.
Cost control has been a recurring theme in F1 for many years as smaller outfits struggle to keep pace with ever-growing budgets. However, teams have never managed to reach any agreement and previous proposals have been ditched in the face of opposition from big constructors.
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In 2009, then FIA president Max Mosley wanted to establish a £40 million budget cap, an enticing prospect for the three outfits – Lotus Racing, Virgin Racing, and Hispania Racing F1 Team – set to enter the series the following year.
However, the plan was eventually scrapped when several top teams threatened to leave and launch an alternative championship.
Since then, only Virgin, now competing as Manor Racing, has survived while HRT and Caterham (ex-Lotus) respectively folded in 2012 and 2014. But the Banbury-based outfit’s future is far from secure as it is still looking for a fresh investment deal.
The Telegraph story quotes an unnamed source with good knowledge of Liberty’s intentions, who said: “It makes no sense to have teams spending the better part of $400m (£320m).
“That money is not doing anything good for fans. It is just wasted on competing on technology. That has not been driven by logic and it has created a two-class society in terms of what is spent on teams. You should have an opportunity for the underdog to win.”
More recent attempts to have cost-saving measures were also met with a refusal; Ferrari went as far as using its historic veto to block plans to reduce the price of customer power units.
“The biggest thing we’ve got to change is culture. Right now, nobody trusts anybody,” a Liberty source was also quoted in the Telegraph report.
Liberty recently cleared more hurdles for its purchase of F1, raising $1.55bn (£1.22bn) from third-party investors while also receiving the required anti-trust approvals.
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