Formula E

Media report: FIA & Formula E cancel plans to include driver salaries into cost cap

Tobias Wirtz

Tobias Wirtz

With the introduction of the Gen3 cars, Formula E has also introduced a cost cap for teams and manufacturers. Contrary to the original plan, driver salaries are now not to become part of the cost cap for the time being. Instead, integration has been postponed until at least the introduction of the Gen4 cars. This was revealed by Andretti team boss Roger Griffiths at The Race.

The introduction of a cost cap for teams and manufacturers in the electric racing series in 2022 was seen as an important step to keep Formula E financially healthy in the future. However, as many driver contracts for the Gen3 era had already been negotiated and signed at that time, it was decided to exclude them from the Financial Regulations, as they are officially known, for the time being.

The drivers' salaries were not to be included in the cost cap until the 2024/25 season. At the same time, the FIA planned to increase the budget cap from 13 million to 15 million euros per season in order to finance driver salaries. However, these plans are now off the table.

One of the reasons for this is the fact that teams may not be able to sign certain top drivers simply because of the regulations. Even if sponsors were willing to pay the team more money for an "expensive" driver, they would not be allowed to use this money for the driver's salary if they would exceed the cost cap. It is quite possible that the driver would then opt for another racing series instead of Formula E.

Griffiths: "Capturing every scenario is complicated"

However, monitoring is also proving difficult. "There are many sources of income (for the drivers)," describes Andretti team boss Roger Griffiths at The Race. "Whether it’s direct salary for driving the car or it’s for endorsements or whether it’s for being the brand ambassador, etc, so trying to capture every scenario is very complicated."

"We have to remember we’re only in the first year of the cost cap," Griffiths points out. "We’re still trying to figure out exactly how it is going to work, what is eligible to be charged to the cost cap versus what’s outside of the cost cap, and I think we just need to see a season or two's worth of data from that, and to get comfortable with how we’re working the cost cap, how it’s being audited and how it’s being measured."

An initial, very extensive and complex draft of this regulation is said to have already been drawn up and discussed by the teams. Drivers and driver managers are said to have lobbied to prevent its introduction. Ultimately successful, at least for the time being. But that could change in the future.

"I’m sure it’s going to come," says Griffiths on the inclusion of salaries. "At this point in time no decision has been taken one way or the other but certainly the discussions that we’ve had are leaning towards a postponement and for very good reasons. I think we just need to get confidence in our own ability to stay within the team cost cap before we add the complexities of the drivers' one."

 

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