LONDON (REUTERS) - Formula One needs an urgent discussion of its budget cap as teams are squeezed by inflation, high energy costs and rising interest rates, Red Bull boss Christian Horner said on Friday (March 11).
The sport's current cap is US$140 million (S$190 million) a year per team, with some items such as driver salaries not included, down from US$145 million in 2021. It is due to drop to US$135 million next season.
Horner told reporters during pre-season testing in Bahrain that jobs could be at risk as tightly-controlled budgets were eroded.
Most of the teams are based in Britain, where inflation is set to reach its highest level since the early 1980s and energy prices have surged.
The biggest outfits, such as Red Bull, had to shed staff to meet last year's cap.
"What you have to remember is when the budget cap was set back in the midst of the pandemic, in the middle of 2020, nobody could have foreseen the circumstances that we have in the world today," Horner said.
"What we see going on in the world is only going to drive prices one way," he added, recognising also the impact of Russia's invasion of Ukraine.
"Inflation looks like it could hit record amounts. We're seeing that impact already on things like air freight just to this event.
"I think it's a very serious problem that we have to look at and address because this has a one-to-one impact on people's jobs and livelihoods."
Formula One has a record 23 races this season, which starts in Bahrain next week, with rounds in the Americas, Asia and Australia as well as Europe and the Middle East.
"It's the duty of the regulator to look at this with a degree of urgency to make sure that the relief is put in place to take into account what's going on in the world with the cost of living increases that we're all going to see," said Horner.
McLaren, who pushed hard for an even lower cap to be imposed, recognised circumstances had changed.
"It's always important to apply common sense and with these additional challenges that came up in the last weeks and months in terms of inflation and so on ... I think it's important to simply have a discussion about it," said team boss Andreas Seidl.
"We are absolutely up for that discussion... open also to solutions or potential adjustments as long as everything is happening within reason."