Owing to the global recession in 2008 and the pull out of top teams from the sport, the FIA (Formula One racing’s governing body) had taken cost cutting measures and introduced a budget cap in 2009 to ensure that the sport does not get hampered by the meltdown.

In 2010, the FIA revised its budget cap plans. Teams signing up for the optional cap must limit their spending to $64 million per year ($15 million higher than originally proposed) in exchange for greater technical freedom. This will not include driver salaries or, for 2010 only, engine costs.

The Formula One Teams Association (Fota) believed that allowing some teams to have such technical freedom would have created a ‘two-tier’ championship, and thus requested urgent talks with the FIA. However talks broke down and Fota teams announced, with the exception of Williams and Force India, that ‘they had no choice’ but to form a breakaway championship series.

Facing a crisis again, the warring factions met in Singapore and decided on a new Resource Restriction Agreement (RRA) which will run to the end of 2017 and will help in reducing costs in areas such as wind tunnel usage and manpower.

In 2009, Ferrari’s budget was estimated at $404million and McLaren $377 million, with the smallest budget being Toro Rosso at $112million. One thing that appears to be agreed, certainly among the teams themselves, is that these figures need to come down. In 1992 Williams employed 190 people, in 2008 it was 540, in 1992 they won the world championship, in 2008 they finished 8th.

When Virgin committed to Virgin Racing they did so when the FIA intention was to impose a budget cap of $64 million for all teams, excluding drivers salaries and a few other costs. Although teams rarely disclose information about their budgets, it goes without saying that the teams now spend an extremely less amount. Earlier, the figure used to range from $66 million to $400 million each.

Entering a new team only requires an approximate $47 million up-front payment to the FIA, which is then repaid to the team over the course of the season. As a consequence, constructors desiring to enter Formula One often prefer to buy an existing team — B.A.R.’s purchase of Tyrrell and Midland’s purchase of Jordan allowed both of these teams to sidestep the large deposit and secure the benefits the team already had, such as TV revenue.

The teams also generate revenues from the new drivers as they have to purchase a seat in the sport and bring in sponsors.

While other established drivers receive annual salaries. Ferrari’s Fernando Alonso drew the maximum amount of $48million (approximately), supplemented by his external endorsements, last season.

That is almost twice the salary that Lewis Hamilton earns at McLaren-Mercedes, a pay packet of $25 million approximately.

Next up is Felipe Massa on $22 million while Jenson Button is on $14 million, just ahead of Mercedes’ Michael Schumacher ($12.80 million). Schumacher’s teammate Nico Rosberg is on exactly the same retainer with Renault F1’s Robert Kubica — on $12.08 million.

Youngest F1 world champion Sebastian Vettel has quadrupled his salary and is now earning $12.80 million. His teammate, Mark Webber, is rumoured to be earning $6.76 million. A total of 15 of F1’s 19 races are funded with government money.

Top earners
(In 2010-11)

1. Fernando Alonso: $48m
2. Lewis Hamilton: $25m
3. Felipe Massa: $22m
4. Jenson Button: $14m
5. Michael Schumacher: $12.80

Michael Schumacher (Born, January 3, 1969) Seven-time world champion

The German ace is widely accepted as world's best ever racing driver. Michael is a seven-time F1 world champion and now races for the Mercedes GP Petronas Team. In 1995, Michael became the youngest double Formula 1 world champion (1994 and 1995 seasons) ever. He is also the 2000, 2001, 2002, 2003 and 2004 world champion. His sixth title eclipsed Juan Manuel Fangio’s long-standing record of five championship win. Michael was at one point the highest-paid racing driver and second highest earning sportsman in the world, earning a reported $80 million in 2004 .

Juan Manuel Fangio (June 24, 1911 – July 17, 1995) Five-time world champion

A South American genius of the 50s era, Fangio is considered the Pele of Formula One for his exemplary record on the track. The Argentine’s record of five titles (1951, 1954, 1955, 1956 and 1957) may have been beaten by Schumacher, but it is difficult to overshadow Fangio’s achievements. He won his five titles in just eight years, and with four different teams. What is most remarkable is that Fangio’s best years were probably behind him before he even raced in F1. He was nearly 39 at the inception of the World Championship in 1950 and he won his first title at the age of 40.

Alain Prost (born Feb 24, 1955) Four-time World champion

A Frenchman, Alain Prost is rarely the first name in any discussion of the greatest drivers of all time, but his career stands comparison with that of any other star of the last 50 years. A four-time champion, Prost has won more titles than any driver except for Schumacher and Fangio. From 1987 until 2001 Prost held the record for most GP victories. Many feel Prost was probably better at the technical side of the sport than any driver in history. He was at his best in the mid-1980s, when F1 cars had a limited fuel capacity and had to be managed to perform at their best over 200 miles rather than driven flat out.

Jack Brabham (born April 2, 1926) Three-time world champion

Called “Black Jack” because of his dark hair and ruthless approach on the track, Australian Jack Brabham won the World Championships twice in 1959, 1960 and 1966. He has a 15-year career and won 14 races with his own car. Brabham occupies a unique place in F1 history. Having started his career with Royal Australian Air Force as a flight mechanic, he later ran a small engineering workshop. Brabham then started running midget cars in 1948 and then moved to England and linked up with Cooper. The partnership yielded back-to-back championships in 1959 and 1960.

Jackie Stewart (born June 11, 1939) Three-time world champion

“The Flying Scot” collected 27 wins and 17poles on his way to three World Driver’s Championships in 1969, 1971 and 1973. During his nine-year F1 career (1965 to 1973), Stewart was known for his precision, peerless car control and was perhaps the greatest natural talent ever seen in F1. Stewart’s legacy on the sport is as much as a safety advocate as a driver: following a crash in the Belgian Grand Prix in 1966 where he was trapped in his car for 25 minutes with no doctors, track crews, or extrication equipment. Stewart campaigned for better equipment and safety services around the tracks on the circuit.

Niki Lauda (born February 22, 1949) Three-time world champion

Niki Lauda of Austria is a three-time world champion. He won the championships in 1975, 1977 and 1984 and won 25 races out of 177. The Austrian was regarded as a no-mark when he bought his way into Formula 1 after an average career in F3 and F2, but some eye-catching performances with BRM in 1973 earned him a surprise move to Ferrari, which, at that time, did not win a World Championship since 1964. Lauda’s presence helped to galvanise the team into fulfilling its potential. After one season, he displaced Clay Regazzoni as team leader and comfortably won the 1975 world championship. F1.

Ayrton Senna (21 March 1960 – 1 May 1994) Three-time world champion

Arguably the fastest man ever to sit in a Grand Prix car, the Brazilian was F1’s great romantic hero, a sportsman who transcended the limits of his chosen arena and touched the lives of millions across the world. A three-time F1 world champion, he is widely regarded as one of the greatest ever in the sport. He was killed in a crash while he was leading in the 1994 San Marino Grand Prix, the last driver to die during a F1 race. In 2009, a poll of 217 current and former F1 drivers conducted by a British magazine named Senna as the greatest Formula One driver.

Nelson Piquet (Born August 17, 1952) Three-time World champion

One of the eight drivers to win three World Championships, Brazilian Nelson Piquet took home the titles in 1981, 1983 and 1987. His total races are 207 and won 23 of them. Piquet burst onto the scene in 1979, effectively forcing Niki Lauda into retirement with some stunning qualifying performances. It convinced Bernie Ecclestone to entrust Piquet with team leadership at Brabham. With Gordon Murray designing the cars it was a highly successful relationship, yielding two world titles.

Tales of tragedy

Sebastian Vettel

Ayrton Senna (May 1, 1994, San Marino)
Sport fans around the world will never forget and never stop mourning the death of Ayrton Senna. He was not only a master on the track but also a compassionate and a generous man. Senna’s 1994 season got off to a rough start; despite winning pole in the first two races, he failed to finish either race and was twenty points behind in the driver’s standings. He was leading the San Marino Grand Prix at Imola when his car left the track and slammed into the retaining wall at 135 miles per hour. The wheel housing was pushed backwards and slammed into his helmet, causing fatal skull fractures. The Brazilian government declared three days of national mourning for the country’s greatest star. Alain Prost, his greatest rival, was one of the pallbearers for the funeral, and an estimated three million Brazilians lined the streets to pay their respects.

Roland Ratzenberger (April 30, 1994, San Marino)
It was the black weekend in 1994 at Imola when two F1 drivers died. It is always the unforgetable Ayrton Senna who is mourned and remembered, but not many mention the death of Roland Ratzenberger, a rookie in F1, who died a day earlier at the same race. His car crashed into a wall at 314.9 km/h after a front wing failure. The impact was so strong that it broke his neck. He signed a five-race deal with Simtek racing, and finished 11th in Japan. In Imola, he had damaged his car on the previous lap and was attempting to secure the last grid spot.

Alberto Ascari (May 26, 1955, Monaco)
F1 double World Champion 1952 and 1953, Ascari is only one of two world champions and the only Italian to win both titles while driving for Ferrari. His mysterious death in 1955 is still spoken today in Italy because of his uncanny resemblance to the death of his father, also a racer. With the current 1955 season, Ascari had a serious accident on the Grand Prix of Monaco, where his car crashed into the harbour. Four days later, and just about recovered, Ascari offered a fun drive in the new Ferrari 750 Monza sports at Monza. At a dangerous curve, his car skidded, had a somersault, and threw Ascari from the car, where he died within minutes. It was 26 March 1955 and Ascari was only 36 years old, the age when his father on the 26th July 1925, died in an accident very similar to the curve at the same left in Monza.

Gilles Villeneuve (May 8, 1982, Zolder)
1982 was a year of a great tragedy, a tragedy that claimed the life of the best and most impressive F1 drivers ever, Gilles Villeneuve. On his final qualifying lap for the Belgian Grand Prix at Zolder, his Ferrari came into contact with Jochen Mass’s car and was launched into the air. The crash was so strong that his car was severely smashed and Villeneuve was thrown across the track still strapped to his seat. Doctors tried mouth-to-mouth resuscitation at the scene, but his neck was broken. He died in a local hospital that evening.

Peter Collins (August 3, 1958, Nurburgring)
One of the most tragic accidents happened at the Nurburgring Grand Prix in 1958, when driver Peter Collins was killed during the actual running of the German Grand Prix. Collins was racing for the lead when he lost control of his Ferrari and spun over one of the course’s banked turns. In the ensuing crash, he was thrown from the car into a grove of trees, and sustained a deadly head injury. No track has proven to be as dangerous as Germany’s famed Nurburgring, which once claimed the lives of five F1 drivers in a fifteen-year span. The track was first built in 1927. In 1969, the track was boycotted by F1 drivers who, refused to race unless changes were made to the course. Since then, no fatalities have occurred at the track but F1 driver Jackie Stewart has since declared it “the most dangerous circuit in the world.”

The ABC OF FORMULA 1

Formula One, officially known as the FIA Formula One World Championship, is the highest class of single seater auto racing sanctioned by the Federation Internationale de l’Automobile (FIA).

• F1 cars are considered to be the fastest circuit-racing cars in the world and speeds up to 360 km/h (220 mph). All members of F1 teams are required to have super licences issued by FIA.
• The F1 season consists of a series of races, known as Grand Prix held on circuits and public roads. The results of each race are combined to determine two annual World Championships, one for the drivers and one for the constructors.
• The number of Grand Prix held in a season has varied over the years. From seven races in 1950, it has now been increased to 19 in 2011.
• The top ten cars are awarded points, the winner receiving 25 points. The total number of points won at each race is added up, and the driver and constructor with the most points at the end of the season are World Champions.
• Throughout the race, drivers may make pit stops to change tyres and repair damage. Until 2010 season they could also refuel.
• There is a race director, who is like a referee in a football match. He manages to logistics of each Grand Prix, inspects cars, enforces rules and sorts disputes.
• Safety car is also used during a race when an incident risks the safety of competitors. This in effect suspends the race and safety car is used till the danger is cleared.
• Every team must run two cars in every session in a Grand Prix weekend, and every team may use up to four drivers in a season. Each driver is assigned a number for the season.
• Additional drivers (commonly known as third drivers) are allowed to run on Fridays, but only two cars may be used per team, requiring a race driver to give up his seat.
• Each team may have no more than two cars available for use at any time. Each driver can use no more than eight engines during a season. Each driver may use no more than one gearbox for four consecutive events.
• A driver can switch teams during the season and, for the Drivers Championship, keep all points gained at the previous team.