Why F1 helps the underdog (and gives a lesson to UEFA Fair Play)

In order to support an industrial challenge of this magnitude without derailing the teams' budgets, the FIA has had to redraw the boundaries of the Budget Cap. For 2026, the overall expenditure ceiling has been raised to $215 million, a leap of 59% compared to $135 million in the previous regulatory cycle. This sort of 'regulated inflation' is dictated precisely by the huge expenditure required for the design and continuous upgrading of the new engines, which - unlike the technical freeze periods of past years - will absorb vital factory resources both during this season and the next.

Within this economic perimeter, in order to guarantee stability for constructors and avoid a dangerous race to the top, the Federation has inserted a specific enclosure: the Power Unit Cost Cap. The maximum limit for disbursements strictly related to the engine has been set at 130 million dollars (a sharp rise from 95 million last year). As governed by Section E of the FIA's Financial Regulations, this cap comprehensively monitors the entire engineering and production chain: from research and development to transactions between related parties, including production, assembly and even strict inventory reporting for all individual components.

With the new regulations, Liberty Media's stated aim is to avoid a prolonged monopoly of a single team (as in the Mercedes case in 2014). Narrowing the performance gap means ensuring more competition, a key element in maintaining high global engagement. This is why the ADUO (Additional Power Unit Development and Upgrade Opportunities) was introduced.

The mechanism is governed by Section F (Operational Regulations): every six Grands Prix, the FIA measures each manufacturer's power unit performance to determine the leading power unit and the distance of the pursuers. If a manufacturer's deficit exceeds 2% compared to the dominant power unit, the Federation unlocks the equalisation mechanism.

But how does it work operationally and where is the real revolution for manufacturers? The ADUO does not end with the simple granting of a 'virtual' advantage (i.e. more hours to spend on the test bench). It is, in fact, a very powerful derogation on physical hardware. As a rule, the regulations impose a strict freeze on specifications (homologations), prohibiting the introduction of structural macro-upgrades to the engine during the current season. However, if the gap exceeds the 2% threshold, the ADUO allows the lagging manufacturer to develop, homologate and bring to the track an extra new heat engine (an evolved specification), bypassing the normal limits. If the gap proves to be even more serious and exceeds 4%, the exemptions are doubled, allowing the manufacturer to introduce as many as 2 new engines during the season.

This rule has a strong impact on the industrial and financial planning of the racing teams, as its validity is also guaranteed for the following 2027 season. Allowing the pursuers to produce, homologate and race-test real up-to-date engines ensures that the technological backlog does not become chronic. In practice, those who benefit from the ADUO in 2026 get the right to introduce the same extra upgrades (1 or 2 engines depending on the severity of the gap) the following year as well. In this way, teams can test the engineering foundations for the 2027 car directly on the tarmac, saving an entire regulatory cycle and drastically accelerating recovery.

To date, unofficial data indicates that Ferrari has an engine gap of well over 2% compared to the Mercedes unit, a parameter that will guarantee the Maranello stable access to the benefits of the ADUO. However, as the official check is only carried out at the completion of the sixth Grand Prix, the 'Rossa' will have to defend itself in Miami and wait until the Barcelona round to start making concrete use of this powerful technical lever and homologate its updated power unit.

Formula 1's ADUO and the Balance of Performance (BoP) used in the World Endurance Championship (WEC) pursue the same goal - to ensure fair competition between manufacturers - but with diametrically opposed methodologies. On the one hand, F1 intervenes in an indirect way: it supports technical development by providing more hours to the pursuers, without affecting the merit and real performance on track of those who have designed the best car. On the other hand, the WEC's BoP intervenes directly by altering the values of the competing cars: the Federation analyses the data and artificially ballasts or depowers the winning vehicles (by changing parameters such as power output and minimum weight) to flatten lap times.

Underlying these complex regulatory architectures, from the Budget Cap to the ADUO, lies the concept of competitive balance, a cardinal principle of sports economics. Unlike in traditional industry - in which a company strives to acquire a dominant position by routing and eliminating competitors in order to maximise profits - a counterintuitive logic applies in the sports business: a stable has a vital need for its rivals.

It is the paradox of 'joint production': the final product sold to sponsors and broadcasters (the Grand Prix and the Championship) cannot be generated by a single entity, but is co-created together with the opponents. If one team were to dominate unchallenged by annihilating the grid for years, the perceived value of the show would collapse. The uncertainty of the outcome is the lifeblood that sustains TV ratings, ticketing and, consequently, the overall value of the commercial rights managed by Liberty Media. Maintaining the balance by lending succour to those who fall behind (as the ADUO does) is therefore not a 'punishment' for those who work best, but a compelling commercial survival requirement for the entire ecosystem.

In this governance perspective, it is interesting to compare Formula One's regulatory engineering with UEFA's Financial Fair Play (FFP), now evolved into European football's new Financial Sustainability Regulations. While ostensibly sharing the goal of curbing cost inflation, the two philosophies diverge profoundly in their practical outcomes. By tying a club's spending capacity to the structural revenues generated, football's FFP was primarily designed to protect business continuity and avoid club default. In practice, however, it has ended up crystallising the historical hierarchies: those who invoice more (the historical top clubs) can spend more, consolidating an almost unbridgeable competitive advantage. In contrast, Formula One's Budget Cap imposes a hard cap, i.e. a rigid and equal spending limit for all, regardless of the commercial power of the individual team. Combined with equalisation and technical rebalancing mechanisms, the F1 system proves to be much more interventionist and close to the American models: it does not limit itself to safeguarding budgets, but actively acts to reshuffle the cards, ensuring that the show remains unpredictable, fair and, consequently, maximally profitable.

The weekend in Florida, structured according to the Sprint format, will open on Friday with the single free practice session - exceptionally extended to 90 minutes - scheduled at 18:00 (Italian time). This will be followed at 22:30 by qualifying for the short race. Saturday will be divided into two acts: the Sprint Race will start at 18:00, while at 22:00 the single-seaters will return to the track to define the traditional grid. The climax of the event is set for Sunday, with the Grand Prix lights switching off at 22:00.