Budget caps....let's talk

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Since the beginning years of Formula 1 it's always been the mega rich manufacturers vs the poor little garagistas. There have been times the little guys did come through (thanks Colin Chapman), but in today's Formula 1, if you spend more, you win more. The money discussions came really came to the front when it came out Toyota was spending upwards of $400mil per season (obviously the money didn't help the results in this case, but it still forced the others to spend outrageous amounts). Resource restrictions have been discussed and tested, testing days reduced, hours cut, but nothing seems to really work, there’s always a way around it. The small and middle teams have been discussing cost capping for years, even Bernie himself, Max Mosley and many team principals believe a budget cap is the best alternative. However, the amount of the cap is what always stokes arguments and shuts down talks. Bernie proposed $250mil cap, but to many teams, this is still a ridiculous amount to spend, in fact is probably more than what the bottom three (including HRT) teams spent combined. So what is the perfect amount that teams and fans would all be happy with? *amounts in US dollars

I am a fan of reducing costs and keeping teams in the sport and grids full. The $250mil proposal still seems ridiculous, so let’s talk what number might work and how reducing the costs drastically is really the only viable option. Caterham's Mike Gascoyne, who has been an advocate for reducing costs for years, recently said in an interview that $37mil, including salaries, would be enough to run an entire team from the ground up each year. On the other side, Niki Lauda and some team principals/owners from bigger teams agree that when you come into F1, you agree to spend a lot of money, it just comes with the territory. In other words, if you can’t handle the heat, stay out the kitchen. The pinnacle of motorsport is never going to cheap, that’s a given, but compare it to other major racing series, even the $37mil is outrageous. For example, NASCAR estimates have a competitive (top 20) team being run for around $6.5 million, Indycar about half of that, and most high-end sportscar teams in the Indycar and NASCAR range. Some exceptions occur when you get into the factory prototypes (who are said to be spending F1-like money, maybe more).

So we’re stuck between a rock and a hard place. How do we get out when there is really not a clear number that all teams are going to agree on…At least not with the current set of technical regulations the sport has. So what if the FIA loosens the technical aspects of the rule book – give the teams a strict $50,000,000 budget cap, but open up the regs. Let the engineers be engineers. Let the aero guys be aero guys. Give them a minimum weight and a box to fit the car into before and after each session and let them go at it. Blown exhaust diffuser? Fine. Reactive ride height? You're in. Double diffuser? Welcome back. Let the sport get back to its roots where technologies were invented, tested and ran with and I think we'd see surge in the sport’s popularity, not only with the fans, but also the teams. Wouldn’t this also help get rid of the hated "pay driver" label that is running up and down the grid for the teams to survive and allow for the world’s best drivers to remain in the world’s best cars on the world’s best circuits. Plug an FIA-hired accountant into each team's offices and balance sheets to and it's a simple solution, right? (Only slight sarcasm there) In reality, there is no perfect solution. Testing schedules, three car teams, customer cars and even the budget cap, none are ideal. However, if the teams are serious about cutting costs, then the best balance to please everyone is to open the technical rule book while keeping the strict cap. As fans, we watch F1 for the speed and technology and great racing that comes along with it, not to seewho is writing the biggest checks. Isn't F1 supposed to be the most technologically advanced and still somewhat relevant series in the world? Slap a strict dollar amount to the teams and let them think and retake that claim.

Thoughts and ideas?
I don't think the issue is the cap itself, but how to enforce it? You tell a team they can only spend x amount, so they open a 2nd company that then does all the research for them, then sells them the technology at a loss to keep the team in budget (this is exactly what Red Bull have been doing, which is why the other teams got annoyed with them). How would you enforce this without checking every single subsidiary that supplies anything to a team, therefore passing massive cost increases onto the FIA?
Just an idea but how about make a rule that you can only use parts created by either an F1 team or an FIA approved company. Therefore Red Bull would have to create everything themselves or purchase a piece from another team/ FIA approved company. This would prevent teams from setting up another company to help it out and ensure that lower teams could still purchase components from bigger teams.

I don't know how to cut out extra team support like ToroRosso and RedBull, but this sollution may help.
I don't think it would change anything, the second team could then still do all the research and development and then just tell the F1 team how to make it at the end of the process and let them make it all themselves. Also at the moment, there are a lot of components on an F1 car that are built by other companies, what are you going to do about that as you can't stop everything?
Regulation is always going to be the toughest task, but that shouldn't be a deterrent. There are ways to keep teams under wraps financially and make sure they aren't going above and beyond what the financial rule book calls for. It's not an easy task by any means, but it's possible. Many sanctioning bodies do a great job of playing neighborhood watch and F1 should be no different. It's not a matter of "It's gone to far already, there's no going back" it's a matter of the sanctioning body being fair, strict, consistent and honest with the rules they employ.

Again, I don't have the best possible solution, I don't think anyone actually does, but it's fairly clear that something needs to be done.
sorry, couldn't resist

Mephistopheles - I was very conscious of that as I wrote my response. Even after I pressed "post reply" I knew someone else would make that connection. I don't want F1 to be a single make series. That is one of the hallmarks of the series. I was just looking for a way around the problem RickD mentioned in his post.

This is a two sided sword of a debate. On one side I want to see the very best cars with the very best technology at the forefront as in years past (and not a too far distant past). However, this means that there are less competitors and a smaller grid. And in reality, how many teams would still be in the sport in this economy? That is the question that need answering before this next one - would any smaller team be able to even come close to touching the bigger teams if there was no spending cap?

On the other side of the debate we can set up a budget cap system and keep more teams on the grid, thus broadening the diversity in the sport. The problem here is that innovation is kept to a minimum and punished as new "expensive" technology is banned to eliminate cost increases at the detriment of the pioneering team.

Both side of the argument have their benefits. It seems to be a question of which is the lesser of the two evils?
I think the problem is in the tightness of the regulations. If the FIA gave the teams more room to work with, and the cars didn't have to be 95% identical, having to seek any advantage in just those 5% design freedom they have, that would likely cut down on R&D costs.

You can't compare something vastly different like NASCAR, so it would be more interesting to compare with the late Champcar series. They were almost as fast and the racing was awesome, yet for a fraction of F1's price tag. Now I am all for spending a few extra million (a few) to keep Formula One from dropping a step back in performance, but surely there should be some sort of middle ground between F1 as it is now, and Champcar?
Champ cars were nowhere near as fast as F1 cars you only have to look at the times at the Canada circuit de Gilles Villeneuve to know that, they were around 7 seconds per lap slower...

They wouldn't even make it past qualifying and into the race, they were way slower than an HRT...

Although I did enjoy that particular series of motor racing...


Not least because Alex Zanardi owned that series although it did sicken me watching Greg Moore die....

I bet that, without a watch in hand or on a screen, you couldn't tell while watching the action live that one form of racing was even 10 seconds a lap slower! The closeness of the competition is what makes the entire thing entertaining, not some runaway victories by a single team lapping vastly faster.
Well, Champcars were much heavier, so that's step 1. I don't think the millions of dollars go into gaining those 7 seconds; they go into gaining 0.5s between otherwise greatly identical cars.
This is too complex an issue for me to write a comprehensive response to and still have a life, so I will be brief at the expense of thoroughness.

F1's rule structure is too restrictive. Ideas are free. Being so scornful of innovation is every bit as costly as out-of-control R&D.

Cost caps are unenforceable. It only could ever work with complete team complicity, and all it takes is one team being convinced another team is cheating and it all devolves into a space race.

I disagree with Westy's assertion that the cost of technology is what limits the size of the grid. F1 has always been a revolving door for teams. Even before it became such a rich sport, F1 often supported 20 teams. Occasionally more. Or more. So powerful was its cachet that many teams entered merely because they were rabid petrol-heads, yearning for the experience of breathing F1's rarefied air, knowing full well they were too lightly funded to compete for more than a season or two, barring a string of miraculous results, before having to take time off to return to their day jobs and replenish the coffers. From time to time its allure even drew out the odd rich eccentric who fancied having a go (Lord Hesketh). But that flies in the face of Bernie's fetish for a fixed and stable grid.

Speaking of His Bernieness, the man is a vampire, promoting the sport's health so he can drain it, completely without oversight. Here we are discussing cost-cutting measures to save the sport, yet Bernie has bought for his (unemployed) daughters two Beverly Hills mansions that set him back somewhere in the vicinity of a combined €125 million. I don't begrudge the man fair compensation but the sport's present state of affairs gives me to question whether his first priority from the start has ever been anything but lining his own pockets. I have opined for many years that the ultimate competition in F1 was the sport's race to outlive Bernie.

I will concede that he, Garibaldi-like, was the right man for the job of unifying the sport's commercial rights, which was what made it a fabulously rich business. But that does not necessarily equate to him being its best shepherd. Or even a suitable one. F1 rose to prominence by marketing danger, speed, glamour and cars that were the zenith of automotive technology. Under El Supremo's management, the sport has forsaken its birthright and it is today trading on past glories. More's the pity they didn't get rid of the chrome gnome 20 years ago.

One major reason it is so costly to race F1 is because the cars are so over-dependent on wing-generated downforce, which, in turn, is intolerant of turbulence and tight racing. The FIA failed miserably to recognise this causitive effect during the pre-CURSE, pre-DRS, pre-disinte-Pirelli days, which were notorious for the dearth of overtaking, which by and large was due to the over-dependence on wings. Instead of discouraging this addiction, they fostered it.

Look at the front wing on any of the current crops of F1 cars. All have four or five (or more) elements. That Baroque styling requires massive amounts of R&D, aerodynamic engineering, CFD research, and wind tunnel and track (Flow-Viz) testing. Now throw development of the rear diffuser, rear-view mirrors, turning vanes, barge boards, Coandă exhausts, the multi-element rear wing, the myriad vestigial wings and all the other aero bits into the mix.

From a video I saw once of the contents of Sauber's CFD server room, I calculated that, at full suck, it probably drew in the neighborhood of 1/2 megawatt of electric current, servers, file servers, air-con, switching and all the rest (1/2 megawatt hour=1.8 million kJ), but only when any redundant servers or file servers (and I suspect they had 100% redundancy) were shut down cold. It is not the cost of operation I mean to draw attention to, but rather the massive level of calculating power which that represents. And it is is limited by the FIA to, IIRC, a combined 2.3 terabytes processing power. All clock cycles are not created equal (server processors do significantly more work per tick of the CPU) but it would take 547 PCs matching the one I'm working at now to equal that many clock cycles.

The FIA could reduce aerodynamic expenditures dramatically by allowing only simple, single-element wings and banning barge boards, turning vanes and anything resembling a vestigial wing. That also could be the first step toward getting the aerodynamic monkey off F1's back and returning the sport to an era relying on mechanical grip: enormous, sticky, gloriously short-lived tyres.

Will the cars be as fast? Probably not, at least not at first, but a fan watching on the telly can't see the car's speed. He can see when it's sliding about, or fidgeting on the edge of controlability.

A couple of seasons ago, I heard Ross Brawn say their cars produced 1G of downforce @185 kph. What's the fun in watching cars racing that are stuck to the tarmac like a bunch of Scalextrics? Cornering tail-out (or 4-wheel drifting) is much more entertaining, and I suspect also takes more driver skill ...dramatically more. It certainly showcases driver skill more but sliding tyres and powerful wings work at crossed purposes.

Radial-ply tyres had been being manufactured for a quarter of a century before F1 began transitioning away from cross-plies. The reason the sport remained shackled to the cross-plies for so long was that radials of that era didn't slide as predictably as did cross-plies. When they let loose, they let loose. But by 1977, huge wings were the norm and ground effects were on the horizon, and sliding an F1 car was passé, so it was far from coincidence that that was the first season radial tyres made their way onto the F1 grid.

Fast-forward 35 years. Now radials slide as deftly as cross-plies ever dreamt of, and there's even a motor racing venue dedicated to excessive tail-happiness.

But that development is lost on F1. We are well past the point when tyres were ready to switch back to primarily mechanical grip. The FIA remain oblivious to their role in the collapse of overtaking, and continue to propose to cure the sport's ills with still more, still tighter regulations. Hardly progressive, the coming V6-T engine formula is yet another step backwards to the previous turbo era, not because they both featured forced induction, but because brute horsepower and driver skill will take a back seat to the fuel economy. And it is too stifling to engine design.

The sport can't forever forsake new automotive technologies, else it will be mentioned in the same breath as NASCAR, which still ran on carburettors until 27 years after the last American manufacturer stopped selling anything that used them. F1 presently forbids active suspension, antilock braking, traction control, stability augmentation, variable cam timing, variable valve actuation, variable length intake runners, more than four valves per cylinder, variable exhaust tuning, and every engine configuration on earth save the 90° V-8 (which must have circular, not oval, pistons and cylinders), all of which see (or have seen) use in production automobiles and motorbikes. And although 2014 rules will permit turbocharging, they will not allow multi-stage turbos or variable impeller vane geometry. Meaning these turbos use near as makes no difference the same technology as those on offer in the 1962 Oldsmobile Jetfire.

These days it is becoming difficult to find even an Econo-Box that doesn't come equipped with ABS and traction control. And all new cars sold in the USA are required to have electronic stability control. So I hardly think the cost of these features is the deciding factor in excluding them from F1 cars. Fan perception of driver involvement is an altogether different matter, but once they see cars with tiny wings, slithering from apex to outer kerb at every corner, leaving four clearly distinguishable black stripes across the tarmac, I think they'll get over it.

Sort out the regulation and management of the sport first, then its money problems will disappear. Otherwise, we're all just whistling past F1's graveyard.
Before there was television coverage there was very little sponsorship from outside the motor industry. This resulted in spending being much lower which allowed teams with little funding to spring up, not qualify for a few races and then disappear again. Also some rich playboy could get to drive a few laps of free practice in a fast car.

Then Mr Ecclestone started to act for the teams whilst taking 8% for himself and bringing in TV to boost everyone's income, especially his own. The FIA then had a forced sale, instead of getting Mr E to do it the gave him F1 instead. Now F1 is a monster which is gobbling up resources at an ever increasing rate. It can't last this way, something has to give.
Just a thought,If there were 10 teams as the gnome would like
and 20 races,and a income generated as of 2011 (£963).

This would mean each teams contribution would be £96 million.
Remove bernies 50% and it brings each teams earnings down to
£48 million.

Remove the rules and give each team £48 million.
That would create a level playing field.

£50 million would then be the ideal capped cost
On top of that is sponsorship. You can't share of that out between the teams, nor can you share out what Red Bull spend on their team, in itself a form of sponsorship.

Imo it would be better to divide the whole of the TV money between the teams plus their share of the gate money, which I would halve compared what Mr E takes. This would be a firm base on which the teams could then build on with their sponsorship.

Unfortunately this would need agreement between teams who cannot agree on anything, each having their own little axe to grind, which is why Mr E is so successful.

I do find it peculiar that the sponsors seem not to have woken up to the loss of viewers in the UK last season, and the loss of viewers that they will have this year in Italy. This is just one more facet of Mr E, as long as his money comes in the teams can make do with what is left over.
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