Reverse Grids vs. Budget Cap Reform: Which route is best for the future of F1?
Abstract This paper examines the regulatory precedent and legal framework of the FIA’s cost cap in Formula 1, evaluates the plausibility and correctness of introducing a rule excluding incident-related costs from the cap, and contrasts this with the implications of the proposed reverse grids for Sprint races from 2027. Drawing on previously enforced Financial Regulations (teams and power unit manufacturers), “accepted breach” cases, exclusions under the cost cap, and statements from stakeholders, it argues that the exclusion of costs from accidents can be designed coherently within existing legal frameworks and may offer a more sustainable reform than reverse grids, which pose risks to competitive integrity and contractual expectations. 1. Regulatory Precedents in FIA Financial Regulations 1.1 The Structure of the Cost Cap & Relevant / Excluded Costs The FIA Financial Regulations define Relevant Costs as those spent on performance-related activities (design, ...