From the BBC (BBC SPORT | Motorsport | Formula 1 | F1 teams handed £40m budget cap)

Formula One teams will be encouraged to operate within a £40m budget cap from 2010 under new cost-cutting measures announced by governing body the FIA.

Those who comply will gain greater technical freedom and unlimited out-of-season testing.

Expenditure such as driver salaries, engine costs (for 2010 only), fines, penalties and marketing and hospitality will not come under the £40m budget.

The maximum number of cars in the championship will rise from 24 to 26.

At the moment there are 20 cars, two for each of the 10 teams, but the budget cap could attract new entrants and F1 commercial rights holder Bernie Ecclestone has stated that he envisages up to three new teams in 2010.

The sport has not seen 26 cars on the grid for 15 years.

After announcing a £30m cap in March, the FIA's World Motor Sport Council (WMSC) has increased that figure by a further £10m, with the formation of a new costs commission to police the regulation.

There are no fixed penalties for teams who exceed the £40m budget cap but the costs commission will judge the degree of the misdemeanour and advise the FIA, who will determine any penalty.

Teams will have be free to chose whether to be governed by the cap but those that opt out face certain restrictions.

Any team operating within the budget will be allowed to use movable front and rear wings and, crucially, an engine not subject to a rev limit.

Those teams will also be allowed unlimited out-of-season track testing, with no restrictions on the scale and speed of wind-tunnel testing.

The £40m figure will cover all team expenditure except:

• Marketing and hospitality

• Remuneration for test or race drivers, including any young driver programmes

• Fines or penalties imposed by the FIA

• Engine costs (for 2010 only, and specifically designed to retain the current manufacturers within the sport)

• Any expenditure the team can demonstrate has no influence on its performance in the championship

• Dividends paid from profits relating to participation in the championship

Ecclestone has agreed to offer participation fees and expenses to any new teams.

There will be an annual payment of $10m (£6.75m) to each team, plus free transportation of two chassis, freight up to 10,000kg in weight, as well as 20 economy-class tickets for each race outside Europe.

The WMSC has also confirmed the ban on refuelling during races, to save on costs of transporting refuelling equipment and increase the incentive for engine builders to improve fuel economy, and on tyre warmers.

Any team wishing to compete in next year's championship must notify the FIA between May 22 to 29 and state whether they wish to compete under the cost-cap regulations.

Ferrari are believed to be the most stringent opponent of financial limitations, masterminded by FIA president Max Mosley.

The Formula One Teams Association (Fota) will discuss the new proposals in London on 6 May having, in January. It unanimously agreed to a series of cost-cutting measures - including limits on expensive testing and a cheaper engine for smaller teams starting in 2010.

F1 is one of the biggest-spending sports in the world but the global recession has had a tangible effect, with Honda pulling out of the sport in December and Renault introducing wage reductions.

The decision to remove revs limits from engines looks to run counter to the FIA's stated aims of making F1 relevant to the future direction of road-car development and promoting sustainability.

But an FIA spokesman told BBC Sport that it was a temporary measure in a transition period in which the sport needed to balance the need for short-term economic viability against long-term environmental sustainability.

It is believed that engine supplier Cosworth, which has not been in F1 since 2006, can supply an engine at an affordable cost that revs to 20,000rpm and would outperform this year's engines, which are limited to 18,000rpm.

 

Now the question will be a matter of which teams can afford Button and still make a solid 6+ driver team next year.

Oh wait...The teams are competing in our fantasy league too?

 

OK, now for a serious post:

I really like the idea of having an optional budget cap with penalties or certain regulations being applied to teams who don't operate within the budget. In this economy, most of the teams would be foolish not to work within the budget. It'll be nice to see more teams competing as well, especially if USF1 can be on the grid next year.

 

Smart Move

 

But doesn’t this limit the R&D department and therefore limit new technology from trickling down to our DDs?

 

Uhh ... whoops.

"But F1 is still the best because it's exotic, international, and unpopular in the USA. Deal with it peons." - Bernard

 

it would be cool to see dramatic wing changes in turns, have the cars look like planes landing.

 

I am on board with this direction.

The latest technology challenge for manufacturers is fuel efficiency. The way I see it, the formula will change when manufacturers/teams get a handle on the new challenges put forth by the FIA/FOM. So we are on to a new phase come 2010.

 

I don't know if it counts But Peter Windsor, co-owner of USF1, wants to make the USF1 driver selection a TV show.

Will that go toward his budget?

And I'm happy they're excluding a few things, but I'm not happy about one exclusion.

Driver Salaries.

I'm pretty sure Kimi can live with out his 20 million dollar salary at F1.

Hell, I'd take F1 parts home as a worker for the Scuderia Ferrari team. Oh left over front spoiler? Sweet! Thanks!

These are getting paid millions to do the thing they love.

 

I see your point, but racing is incredibly dangerous. They're risking their lives. The teams are also using their drivers as marketing tools so they obviously get compensated for that too.