Fat Hippo’s Not-A-Rant: Why FIA should rethink their approach

Brought to you by TheJudge13 contributor Danilo Schoeneberg

Formula One is a dictatorship that desperately tries to masquerade as a democracy. The government in the Republic Of Formula One is FIA, but the Maximo Lidér is the short one from Suffolk and the token parliament is the assembly of teams. Theoretically, the parliament could make laws, but since the constitution of the Republic Of F1 in most cases demands a unanimous decision, it’s basically useless as with eleven different interests (10 1/2 as Toro Rosso is basically the co-depended twin of RB) a unanimous vote is basically impossible for all but the most banal decisions. So in the end all laws come either from the government or as an Ukas from the resident tyrant.

There is nothing wrong with that in and of itself, if we get rid of Muhammar al-Midget and the FIA learns, how to achieve it’s goals by encouragement instead of decree. Let me give you an example from my native Germany:

Many people will know that several portions of the German Autobahn do not have a speed limit, so you can blast along at 300kph without having to fear for your license. That’s basically true, but only half the story. Those parts of the Autobahn truly have no speed limit, but they have a ‘suggested speed’ of 130 kph. What that means is, that the more you go over 130kph, the bigger the trade-off in case of something going wrong. If you happen to have an accident, you’ll be shouldering part of the blame, even if the accident was 100% someone else’s fault. The more you exceeded the 130kph suggestion, the bigger part of the blame you’ll have to accept. The message is clear. The state says ‘We want you to stick to a 130kph limit, but you’re free to go faster, but at a price.’

The same applies to drink-n-driving. Germany has a limit of 0.5‰. That means, up until 0.5‰ driving is not illegal. That’s a wee bit more than a pint of beer or a glass of wine. The ‘suggestion’ however is to keep it under 0.3‰, about a single 0.4l beer. Which means until 0.3‰ you are perfectly fine. If you have an accident with 0.4‰ – the accident will be declared your fault. You wont get a DUI – you still were legal – but your insurance will have to pay and your premium will go up.

Both methods are surprisingly effective. Less people drive the Autobahn as if their hair’s on fire than when there was just simply no speed limit and no suggested speed and more people never drink alcohol when driving as back then when there was just ‘under 0.5 ok, over 05. DUI’. Why does it work? Because people have a choice and more importantly, they have the option to react to situations. Most people plan their journey so that they can coast along at 140kph, which is frankly a very comfortable cruising speed – not too pedestrian and not hectic either. That’s over 130kph, but the trade-off is relatively minor and it is still significantly faster than what most other European countries have – a strict 120kph limit. If you get stuck in a jam and lose 20 minutes, you can decide: Do you accept being late and stick to 140, or do you accept the financial (and potential health) risk and go faster to make up some of the time. If you have a strict limit, you are stuffed in any case – you’re either late or risk your license, since with today’s speed camera technology, you are very likely to be caught.

That is where the FIA approach comes into play. The best case is for this is testing. Right now the FIA says – you have “x” testing days and that’s it. If you need to catch up on development, because you started on the back foot, you’re eff’ed. And you’re doubly punished too, as due to the lack of testing you’ll fall further and further behind, meaning, you’ll drop down in the constructors’ championship and will be slapped financially when the payout comes for the next season. The Red Bull dominance of 2011 and 2013 was down to one thing and one thing only – the testing ban. Should Ferrari have had the chance to test at Fiorano until the cows come home, they would have clawed back and would have had the chance to give RB a run for the money.

They wasted time and money on a big Barcelona update which turned out useless, because they couldn’t test it. That’s a ridiculous situation.

But wouldn’t that just be favouring the big teams over the midfield and the small teams? Of course it would, because unlimited testing is what German Autobahn was in the early 90s – no limit and no difference whether you went 130 or 230. What we need is a ‘suggested test limit’. Lets say FIA defines a suggested test limit of 5000km. For the teams at the back it won’t make no difference as they probably won’t have the money to finance 10-15 testing days. But that’s just mirroring real life on the Autobahn. If you struggle to make ends meet, you have a horrid 3-cylinder eco-box that hardly reaches 130 kph anyway.

So what then about the trade-off? Well, that’s so simple, it probably makes too much sense for FIA to even consider it. For every started 1.000km (roughly one testing day) you go over the testing limit, 2% of the FIA/Bernie money you’ll get after the season will be docked and goes into a ‘resource fund’. This means a team can rack up a mammoth 55,000 testing kilometres legally, but the trade-off is, they won’t get a single cent from FIA/Bernie and all the jolly millions go to the fund.

What to do with the fund then? Now, that’s again extremely simple. Whatever piles up in the fund is distributed among the teams that stayed below the suggested test limit. The less testing you did, the bigger your portion of the fund. Theoretically that might lead to the top teams pouring huge money into simulators and ending up with minimum testing, hence getting even more money back…

No it won’t… Why should this scheme be restricted to testing days? Have the team’s simulators scrutinized and sealed by FIA like cars are and make software modules mandatory that prevent a simulator being activated without a FIA activation code. Each activation code (ordered and delivered via network connection) gives 1,000 simulator km. Each team has a suggested limit of 5,000 sim kilometres. each activation code past the fifth one – another 2% disappear into the fund. Next step: engines. Suggested limit is 5 engines. Every extra engine – 2%. Have 25,000 testing km’s, 25,000 sim km’s and 5 extra engines and all your money goes to the fund.

See a pattern here? That’s what I would call effective resource restriction management and it’s easy to police, too. Every test has to be registered with FIA – easy to track. Simulators can only be activated with a FIA activation code – very easy to track. Number of engines used – very easy to track. Teams have to decide how to spend their resources and the system works by encouragement to use less instead of indiscriminate punishment for overspending. If Ferrari or Red Bull decide to charge ahead by outspending the others in terms of testing hours, engines used, simulator running – fine – but every euro they spend over the suggested limits, trickles down to those that compete with less resource use.

What then, if a team already has blown 100% of their FIA/Bernie money into the resource fund, but want to continue guzzling resources? Very simple, the system continues to count. Imagine Red Bull wins the WDC and WCC (like I suspect was done this year) by simply out-simulating all other teams? I have no exact numbers, but I would be surprised if RB has done less than 55,000km in the simulator in 2013. That’s an astronomical advantage over a team like Marussia, which doesn’t have a simulator at all. Add to that the fact that RB had to send both Webber and Seb out at Monza, knowing that their gearboxes were already wonky, but the allotment ran thin.

In the ‘Hippo Resource Management’ they simply would have changed them, the extra gearboxes would have cost them 2% each, bringing their ‘fund donation’ to 104%. RB would still have won the WCC, but probably with less gap on Merc and Ferrari, who would have ‘donated’, too and at huge costs. Let’s say their FIA/Bernie money for 2014 would amount to 76 million Euro. They’ve blown all of that into the fund and have to pay 4% of that (3,4 million) of resource fine, because they even overspent 100% of their prize-money. People at Marussia, Caterham, Sauber and Williams would help themselves to a brewery with the money coming in, or, if they’d be sensible they’d invest it into being more competitive next year.

There also needs to be a provision against teams deliberately trying to ‘harvest’ more money from the “fund”. For that a factor can be calculated that determines the success/resource rate. If Williams and Marussia both have used only 3 test days and no extra engines, but Williams is 8th and Marussia 11th, the crew from Grove will of course get more of the payout, but Marussia would still get a fair slice of dough.

Could such a system work? I think so. It especially opens options for midfield teams. Tense battles, like the Force India/Sauber/McLaren three-way fight could have been changed by Force India risking 4% of their payout for two testing days, but the payout would have risen, had they overhauled McLaren due to it. And it makes resource use and spending much easier to police. Listen FIA, feel free to implement it – the Hippo is a beer drinker. Deliver it in small bottles to the pond.

~ by Danilo Schöneberg on December 31, 2013.

33 Responses to “Fat Hippo’s Not-A-Rant: Why FIA should rethink their approach”

  1. Sensible, creative and practical approach. Let’s get it done!!!

  2. This is fantastic, Danilo. I see no obvious significant flaws in your reasoning. Best of all, it retains a sense of meritocracy.
    I also liked the back story on Germany’s driving laws/segue into the story. Very interesting.

    • Agreed… both interesting, enlightening, and sensible… so, sadly, it’s bound to fail.
      If you win, I have a good friend in Hamburg who can provide the bottle of beer… ;) If you’re anywhere nearby…

  3. +1000 for the “Hippo Resource Management” method. Simple, effective, progressive.

  4. I think its a brilliant idea!! Well thought out, practical, easy to police, fair to everyone and gives incentives to smaller budget teams. So, of course it will never be implemented. When have Bernie and the powers that be ever done anything except to feather their own nests?

  5. agree with everything apart from the gearbox part. That’s surely part of the fun of racing is knowing that either of the RB cars could have blown at any time. Just look back to Singapore 2012 where Hamilton started to take it slightly easier on his engine…then retired. It gave an extra dimension to the racing that day that we would have been robbed of.

    Also, you say it would have created a tense midfield battle but I fail to see how this would develop. McLaren were the richest in that group and would ultimately come out victorious if this battle were to commence.

    • Sure, McLaren are the richest, but that’s the whole point of the system. It encourages them not to spend all that money and if they do, they indirectly sponsor those that they beat by outspending them.

      • Fair enough, but it seems unfair to teams working on a much tighter budget to have their innovative design blown away after 2 races because a team like McLaren (with their Middle East millions) to be able to spend to win.

        Imagine a scenario where testing is controlled to say, once or twice in a season, at least they would know that their ‘innovation’ was guaranteed until that testing session. While your new system would be a much fairer distribution of prize/general funds, it could cause the big teams to remain the big teams, with the (smaller) back of the gridders still at the back. A team like Red Bull seem to be able to find more money when they need it….so where does this scheme fit in with resource restriction – especially if a team only cares about winning at (almost) any cost?

        • The answer to that is very simple. If a team like RB overspends like they would have done this year, they wouldn’t see a single penny of bernie money. Together with the millions donated by McLaren, Mercedes, Ferrari and perhaps Lotus (once they’ve cleaned the back of their sofa) that resource fund could easily grow to something like 250-400 million and a team like Marussia would end up getting a whole season’s budget worth of refund. Now imagine what Marussia could do if their budget would double. At 80-90 million it would still be much smaller than what Ferrari has, but it would certainly allow them to invest in better technology and become more competitive.

          RB meanwhile couldn’t overspend every year. Part of why they’ve been in F1 since 2006 is that part of their costs comes back via Bernie money. Mateschitz wouldn’t pay 500M every year, just for advertising, so even RB would be trying to not use up 100% of their Bernie money. For instance they would have probably stopped development earlier this year (thus saving resources), trying to maintain a small gap on Fezza and Merc instead of charging ahead by a country mile, making the last races much less a forgone conclusion than they ended up being.

          • Wouldn’t this system see teams calling it quits for a year instead of pounding away at the simulator. For example, Lewis Hamilton has talked repeatedly about how after Hungary he had the slimmest of chance of winning the title, but after the summer break Red Bull came back in what looked like a different car. After Belgium, your system could see teams just giving up on a year because it seems too bigger risk for the financial penalty to carry on testing.

            Furthermore, your system could also see a team like RB using up a 2012 testing allowance to test a 2013 car.

            Also, where does this leave off-season testing?

  6. also to add: on the simulator side of this, it would create an interesting trade off between accepting 2nd best at a GP weekend and striving for a win….but is this really fair? Red Bull were comfortably the 2nd fastest team in Monaco on the Thursday, but managed to narrow the gap drastically between themselves and Mercedes thanks in no small part to the dawn til dusk shift Sebastian Buemi put in on the RB simulator, back in Milton Keynes, to develop the new front wing.

    What about limiting the simulator time on GP weekends?

    • Limiting use on certain times would make it uselessly complicated. When or with whome they start up the simulator doesn’t matter, it would have counted towards their tally of sim hours, so if they want to close the gap on a weekend by a mammoth they can, but those few hundred kms of testing need to be compensated later on by sacrificing Bernie money.

      The championship fight is so close these days, every team that wants to win the title will almost inevitably overspend their resources. To return to the Autobahn analogy: Even if you meticulously paln your journey for an average speed of 130 kph, you’ll end up going faster than that at some point, because you either need to make an unscheduled bathroom stop, get boxed in by a few lorries (happens almost inevitably on the A2 near Helmstedt) or some other thing you couldn’t plan with.

      Same applies to the teams. If you want to win the championship, you can’t afford to send your car out with a wonky engine, so you will sacrifice those 2% of Bernie money for a new one. Unlike the indiscriminate punishment of today’s system however, the ‘fine’ will not go to Bernies coffers, but will go back to those teams which made the season with 5 or even with only 4 engines.

      • To play devil’s advocate here but….how do you guard against Caterham and Marrusia getting together, realising they will never be able to bridge the gap to the rest of the field and halting car development knowing they will both be suitably financially rewarded for doing so?

        • You raise a ton of good question here, adam. I think I’ll write a follow-up trying to explain these things. ;)

          • I look forward to it. Just like the FIA F1 rule book, before these rules are tightened there would be ways to exploit them.

          • Now look what you’ve done, Adam… LOL :)

  7. and finally: this system is fine, apart from the fact that Ferrari get an amount ($17.5million correct?) purely for being Ferrari. This is a head start each year which is plainly unfair.

    • You won’t find anyone, who won’t agree with that, but keep in mind that Ferrari will almost inevitably be one of the overspending teams, so that ‘extra money’ will quite quickly disappear into the resource fund and from there will find its way to the less spending teams. Still not entirely fair, but less unfair than what we have now.

      This ‘hippo system’ solves a couple of problems implicitely. For instance, since a gearbox change costs nothing (if below the limit) or 2% bernie money (if over the limit), blatant Grid manipulations, like Austin 2012 are impossible.

      • Blatant grid manipulations would even more of a regular occurrence if there was no penalty here. Also, does your system allow a driver to switch back to a previous gearbox which was in fine condition to be used even after 5 races…especially if these races were incomplete?

  8. Brilliant, it’ll never happen as I can’t see any of the big teams agreeing to it, but I think it’s a cracking idea. My worry would be that investment firms would buy up the back of the grid teams and run them on a shoe string for the extra cash the would profit from. Perhaps the rules could say that the extra Bernie money has to be reinvested back into the development of the cars/equipment at the factory. Or maybe they get punished financially for being slow, percentage wise.

  9. This would be a great system, with an exception on the part of simulators.

    The most expensive part of a simulator is the software and software does not wear (in theory, in reality it does :( ). The variable costs for a simulator is electricity (hardware is written off and replaced in 3 or 5 years, so not a variable cost).
    Teams have other simulation software (fuel consumption predictions, wear predictions, etc.) besides the driver simulation, how do you want to control those? Set a maximum on the CPU cycles?

    In a time where training of lorry drivers starts with a few hours in a simulator, before putting them in an actual lorry, it is weird that F1 teams, such as Marrusia, do not have a driver simulator at all. Instead they send out a driver on the track without proper training on the car systems and behavior. It would be for their own benefit to have at least some simple driver simulator to instruct a test driver on how to handle the car, to get more done in the RL test driving. Putting drivers/operators in simulators before putting them in a real system is an industry standard (aviation, shipping, etc).

    (On the lorry part, I was surprised to hear that drivers were put in a simulator before they got lessons in an old DAF YA 4442 :) )

  10. Definitely an admirable system, which would greatly improve the current era of F1. I do believe that RB are overspending (but also targeting their spend well, e.g. gaining expertise in simulators), while others who used to have been ‘neutered’ (Ferrari with their testing track and lack of testing). The great thing about this system is that it allows each team to ‘play their hand’, i.e. Ferrari can do some testing, just it means they’ll be paying those that can’t afford to as they don’t have a track on hand. Others can do sim work instead, while those doing it 24/7 similarly pay those that can’t afford to.

    Interesting to learn about the German system – and it does take two to have an accident. Even if someone drives straight into you, you could have not been there in the first place, or been driving slow enough to avoid it easier. I find that in the UK you can drive any speed really in certain places, while other places have a heavy police presence (and also quite a lot of traffic anyway). Peak speeds are fine, but a lot of people are caught out by “average speed cameras”, which are infuriating when they mean long stretches of motorway can’t be driven at a risky % more than 50mph (probably because of cones on the road, from workmen working at some point).

    The car really matters as well – these new Audis can cruise easily at up to 100mph, while older cars are struggling when you get near 70. A bit like old F1 vs. new F1 cars! Hence Cyril saying the cars are now too easy (I only saw the headline but think it was about suspensions? The cars look so smooth now compared with ten years ago)..

  11. Right…..something must be done.

    Two articles in a row from Das Fett Nilpferd that I agree with in full. What’s happening? Whos abducted Danilo? Can we talk about Red Bull and Pirelli again…. Please?!!??

    Yep, there are a few creases and kinks to iron out, as Adam pointed out, but conceptually its brilliant in its simplicity.

    And I have a thing for optimisation and efficiency, so this speaks (loudly) to my inner perfectionist.

    Well done that man!!

  12. Print it, make it an official letter and send a copy to FIA and all teams.

  13. How would you prevent teams from going all out and burning through all of their reward money? We could have more Mclaren 2013 where teams go all in one year and completely fall off the next season.

    • That would be their choice to run a strategy like that, but I doubt sponsors would be too happy, if you a championship winning package and charge a sponsor big money only for them to find you are trailing the field the very next season and virtually no air time for your sponsors buck. I don’t think the teams would do it, maybe the smaller ones, but they won’t win the title as even using up their prize money and some most likely wouldn’t give them enough to challenge and they won’t have enough cash to stay alive.

  14. LOL, once again DSyou have come up with an admirable idea. It’s ever so tiresome to have to agree with you all the time xD.

    I like it’s similarities to the MLB system which has been shown to work quite well in practice, instead of a cap, essentially progressive tax over certain limits. Leaving the teams to decide for themselves what’s worth it. Clearly in a general sense it should be the way forward, which means of course it will never see the light of day.

    Of course, I would add to that just giving the teams a big pile of resources for the season, tires fuel everything, and letting them budget what they want to bring to each race would also add a great deal of strategic spice to the season. Want to blow all your super softs at Monaco? Fine, it will be fun watching you slide around the rest of the season. Want to use double fuel at Monza? Fine, you’ll be limping around Interlagos and it will be entertaining watching your driver trying to push the car up the hill to finish the race. You could even award bonus points for having leftover resources.
    Just sayin’ if you want to value conservation, VALUE it ;-)

  15. I like this idea very much Danilo, a few minor tweeks but on principal very acceptable indeed, well thought out.

    I have a little question.

    A test session is exactly that, so what would stop a small team producing say for the 2013 season and not upgrading at all, use it again in the ’14 season too, at each test session they are allowed, they get themselves organised and test the 2015 car (assuming regs are fairly ststable) in all tests over those 2 season, they will have had a nice payout from the over spend pot, so in 2015 they are so confident they test and simulate till the cows come home but for some reason they don’t win the title and end up owing FOM the GDP of a small country, would you expect them to go bust.
    I only ask because if I were Marussia I would use the same car for 2 seasons whilest developing the car I really wanna challenge with. Let’s face it, if they come last for 2 seasons it’s no big change in order, plus the extra cash from the overspend pot invested, then they come out fighting and try some giant killing.

    I do have a small suggestion, how about if the smaller teams don’t have the funds to use all their allocated test days, how about they can sell them to bigger teams and same for sim time too as some teams don’t own a sim at all, once all the spare days/sim time are sold, then it costs X% of prize money to do more. This way the small teams benefit twice, selling testing/sim time and from the overspend pot. A little like industial countries buy CO2 credits from none industral countries.

    If you wanted to formalise this proposal and send it to the FIA/FOM/Teams I would happily sign it too, I would guess several of the regulars would add their support. You never know until you try.

  16. Nice idea. But I would also just ban simulators, and free up the rules on computer time. Does anyone seriously think that teams don’t use HPC clouds like Amazon AWS, outside of the current restrictions?

    I would also like to see an expanded implementation of the basic idea that Gary Anderson put forward. He suggested that there should be a number of aero homologation periods during the year. The car would be split into three areas, A – forward from the back of the front tyre, C – backward from the front of the rear tyre, and B – the middle section. Section B would only have two in season changes allowed. A & C would have maybe three changes. Wings could have a number of elements that could be removed for low down-force, and replaced for high down-force circuits.

    • Lotus is using a cloud, when you have Microsoft Dynamics and Avanade as partners, it is not hard to figure where the calculations are done.

  17. Ever wondered what would be the perfomance gap of the cars in 2014.
    Can’t wait to see!!!!

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