F1 chief Ross Brawn has warned competitors that a fraudulent breach of the sport’s future cost-cap provisions could potentially cost a team its championship.

The FIA’s World Motor Sport Council ratified on Thursday Formula 1’s 2021 technical, sporting and financial regulations.

A major component of Grand Prix racing’s future rulebook and Liberty Media’s quest to level the playing field for the teams is the sport’s $175 million budget cap, currently based on a 21-race calendar.

Formula 1’s auditors will implement controls and processes in 2020 as a dry run before the cost-cap’s formal introduction a year later.

While teams will still be allowed to spend at will next year, any violation of the $175 million limit from 2021 could lead to dire consequences for teams that fail to comply.

  • FIA gives green light to Formula 1’s 2021 regulations

It is worth noting however that an extensive list of exemptions, such as driver salaries and marketing expenses, are set to be excluded from the teams’ budgets.

“Financial regulations are the dramatic change in F1,” Brawn said.

“We’ve tried for these in the past, and we’ve not been successful. I think the crucial thing about the financial regulations now is that they are part of the FIA regulations.

“So the sanctions for breaching financial regulations will be sporting penalties of some sort, depending on the severity of the breach.

“Whereas before we had the resource restriction, which was a gentlemen’s agreement between teams – well there’s not many gentlemen in the paddock I’m afraid, and that was a failure.

“But this has teeth. If you fraudulently breach the financial regulations, you will be losing your championship. So it has serious consequences if teams breach these regulations.”

Brawn admitted that the specific auditing processes associated with the cost-cutting measures will likely require some fine-tuning in the coming years.

“We’ve got a very strong team of financial experts within the FIA and within F1, and we’ve sought outside support on this,” explained the Briton.

“Deloitte are one of the experts on sports finances, they’ve been very involved with the football world, and you can see the positive effect that’s starting to have.


“They’ve been pretty well thought out, but they will need development, like any regulation.

“I fully expect that we are going to have challenges in the future to implement this, but it’s absolutely essential for the good of F1 that we have a control on the finances and how much is spent in F1.

“They are essential for the well-being of F1. Budgets have been escalating. F1 is almost a victim of its own success in that the rewards of success are so valuable that the justification for investment keeps coming.”

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