The following is a guest post :

It began early this year, with an announcement of plans to impose a £40m (just under $65 million) budget cap in order to encourage new teams to participate in Formula 1 Racing. On the surface, it seemed a good way to level the playing field, and bring in new blood, but the old guard of F1 took issue.

First Ferrari, then Toyota and Red Bull, and finally, on May 9th, Renault as well, declared their intentions to pull out of the racing series for 2010, with Renault’s Flavio Briatore stating that if the budget cap wasn’t addressed, his team would have, “…no choice but to withdraw from the world championship at the end of 2009.”

Why does the budget cap matter?

While none of the high-profile teams object to the concept of cost cutting, the concern over a budget cap is that it would essentially split F1 racing into two tiers – one comprised of the teams that can comfortably operate within the budget limitations, and one that cannot.
Further, it is expected that such a division would also cause a technological cap, where some teams are allowed to use race cars with engines without rev limiters, or to run cars with flexible wings, while others are not. In fact, the currently outlawed flexible rear wing has already been approved to next year’s teams working within the budget caps, and such a design modification could provide an edge of up to two seconds per lap to cars so fitted.

Explained Bernard Rey, the Renault F1 team president, while his company has always considered Formula One racing to be the cutting edge of motor sports, and the best venue for displaying technical achievements, “We remain committed to the sport. However, we cannot be involved in a championship operating with different sets of rules and, if such rules are put into effect, we will be forced to pull out at the end of this season.”

Other Concerns?

The FIA never made a public comment when Ferrari threatened to quit, and never openly addressed the other teams either. However, it has been rumored since Renault’s statement that the budget cap is not the only concern.
As Renault’s statement explained, there is general disgruntlement between FOTA (the Formula One Team’s Association) and the FIA. A specific point of contention is that FOTA offered proposals of its own, including several cost-saving suggestions that were to be adopted in stages between 2009 and 2012 – proposals that were essentially ignored by the FIA, just as FIA never discussed their cap proposal with the teams.

Since Renault’s addition to the list of teams threatening to leave F1, the rumor mill has been busy. One such rumor, printed in AutoSprint magazine, suggests that Flavio Briatore will buy the Renault team and enter it under his own name in 2010 and beyond. This may or may not happen, and could be related to the loss of ING as one of Renault’s leading sponsors, but one thing is certain: the face of F1 is changing, and the big names we know now, may not continue to dominate the sport.