Ross Brawn warned in 2019 that the F1 cost-cutting measures “have teeth” and will bite teams who break the rules.
A $175 million fully enforceable cost cap was introduced as part of the 2021 blueprint, which has been officially ratified by the World Motor Sport Council following unanimous agreement from all parties, in the hope that success will be determined by how teams spend their money rather than how much they spend.
despite the fact that the COVID-19 pandemic reduced the initial starting figure for the new cost cap rules to $145 million in its first season.
During the initial launch of the new financial model, Brawn stated that teams could face severe consequences if they violated the sport’s new regulations.
“Financial regulations are the dramatic change in F1,” Brawn said in the official reveal at an FIA press conference in Austin, Texas.
“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.”
“Previously, we had a resource restriction, which was a gentlemen’s agreement between teams-well, there aren’t 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 lose your championship. So it has serious consequences if teams breach these regulations.”
Ross Brawn also acknowledged that implementing the cost cap model would be difficult, but emphasized that Formula One must have greater control over team spending.
Brawn added: “We’ve got a very strong team of financial experts within the FIA and within F1, and we’ve sought outside support on this.”
“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 implementing this, but it’s absolutely essential for the good of F1 that we have control over 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.”