Question: What is the budget figure?
Max Mosley: Provisionally it will be £30 million per two-car team per season (currently €33m, or $42m).
Question: How can you possibly run a Formula One team for that sort of money?
Max Mosley:It has been carefully costed. The cars will be much less refined in detail, because the teams will not be able to spend huge sums on minute advantages (for example, $1,200 on a wheel nut which is only used once), but from the grandstand or on television they won’t look or sound any less ‘Formula One’ than the current, ultra-expensive cars. They will also be more interesting to the technically-minded because of the special features which will allow them to compete against teams with much bigger budgets. And don’t forget that £30 million is still a huge amount of money in the real world.
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Question: What does the cap include?
Max Mosley: Everything except the motor home (if the team has one) and any fine(s) imposed by the FIA. All expenditure will be included, even the salaries of the drivers and team principal. If the team is profitable, it can pay a dividend to its shareholders, who may well include a chief engineer, team principal or even a driver. But we would make sure the team was genuinely making enough profit to cover the dividend.
Question: How can you possibly check? Won’t there be all sorts of under-the-counter payments and avoidance mechanisms?
Max Mosley: We went into all this very carefully some time ago. We involved forensic accountants from Deloitte and Touche as well as financial experts from the current teams. The vast majority of payments are traceable and any benefits in kind can be valued. There were a number of meetings. It became clear we could do it. The problem was getting the current teams to agree a figure. Also, the majority wanted a lot of exclusions such as land and buildings, the team principal’s salary and the drivers. We would also need the right to carry out very intrusive audits and impose severe penalties for overspend. However these difficulties no longer arise because each team will now be able to choose whether or not to run under the cost cap.
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