Mercedes team principal Toto Wolff has praised the introduction of the budget cap as having protected the teams “from ourselves”, with a “spending war” having occurred before Chase Carey introduced the cap.
The former executive chairman of the pinnacle of motorsport introduced the budget cap into the sport in 2021, with the target being to stop the leading teams from spending considerable amounts more than the midfield and backmarkers.
By introducing a cap, it brought the field closer together, given that every side could spend the same amount.
Whilst some teams didn’t spend the full cap, unlike others, it still saw all the teams spending more similar amounts.
Previously, Red Bull, Mercedes and Ferrari were “in their own league”, with the trio having been unbeatable financially.
The budget cap has somewhat taken that advantage and superpower away from the frontrunners, with the punishment for exceeding the cap being particularly nasty.
Red Bull found this out last season, after the FIA determined that they’d breached the 2021 cap by $2.2 million.
As punishment, the governing body fined the Austrians $7 million and awarded them a 10-percent reduction in permitted aerodynamic research for 12 months.
As a result, Red Bull will have less time in the wind tunnel this year, meaning their mid-season upgrade packages could be affected.
The budget cap played an interesting role last season, with Mercedes having been unable to spend as much as they want to fix the issues with the W13.
With that in mind, the budget cap has increased the importance of ensuring that the parts that are being developed are going to be effective, with teams not being able to spend loads to fix it.
Wolff is a big fan of the budget cap, with teams having also ended up making more profit, given the fact that they are now spending less annually.
“The key change was the cost cap introduced by Chase Carey [former executive chairman of F1] to protect us from ourselves,” Wolff told The Times.
“The situation before was that Red Bull, Ferrari and Mercedes were fighting in their own league in a revolving spending war, but the smaller teams were not competitive.
“The cost cap was based on a blueprint that existed in the US for a long time. In the NFL and NBA, you have a limit to what you can spend on your roster. F1 introduced a cost cap on technical development, which was the game changer for the business side of F1. Suddenly, we were profitable.”