Brought to you by TheJudge13 contributor Pipin
There has been much talk of capping budgets for F1 teams over the last several years – indeed, three teams entered on the false promise of such a cap, which we all know did not materialise. Every so often, sections of the media (including social media) and some of the ‘high ups’ in some teams start to publicly wring their hands and lament that the sport is too expensive, and only those with the biggest wallet ever have a chance to win.
But………isn’t this the case with most sport – football being a classic example – the clubs which can afford the star players tend to win – clubs which can’t tend not to. Other aspects of life too – those who have been to expensive public schools tend to earn more than those who went to the local state school – it’s just how life is.
Of course, there are exceptions to this – Coventry City once famously won the FA Cup, but that was a one off. Harold Wilson did not go to Eton yet still became Prime Minister, Pastor Maldonado once won a grand prix……..
Coloni, Osella, ATS, Fondmetal, Forti, Eurobrun, Minardi, Pacific, Simtek, Larrouse – all names from the fairly recent past, names that many think as of failures – I see them as triers – they may have had dreams of winning races and championships – in the same way as Colchester United dream of winning the Premier League – in reality it is very unlikely, but at least they tried.
Other than Manor (one of the teams lied to about the budget cap), who else do we have that can be compared to these teams? One could argue about Sauber, Force India or Lotus – but all of these teams have been at or near the top of the pile in one incarnation or another. The sport is very short of teams with dreams……… Why? The cost to compete is just too high. The answer to this is surely to have a budget cap?
But I say NO!
Budget caps cannot ever work. It doesn’t matter how many commentators talk about ‘forensic accountants being able to check what is spent, teams will always find ways around it – how many ways do companies find of ‘massaging’ accounts so that they minimise their tax liabilities? If Ferrari or Mercedes Benz want to test (for example) a device which stores fuel in excess of what the engine needs right now, to give a ‘super boost’ when the engine calls for it, there are many of their own road cars they could use as the test mule.
Even if they wanted to try out a whole new power unit, there are ways of testing concepts in exotic ‘road’ cars – who is to say whether the development of valves made from costafortunium were developed for a road car or a race car? Once the technology exists, it can be used wherever, but the development costs attributed elsewhere.
The other problem with a budget cap is that teams are already effectively capping their own budgets. There is not a team in the pitlane that does not spend all the money they have – each team may have a different income and therefore a different expenditure, but they will all spend all that they can. This brings us to the crux of the matter.
I am going to use easy numbers rather than try to analyse real figures, but the principal holds true. Lets assume the budget cap is set at £100m. If team A has an income in prize money from FOM of £50m, in order to spend £100m, it needs to raise a further £50m from either sponsors, or drivers. If the team manages to do a multi year deal with Joe Bloggs Widgets to be title sponsor for £50m, then all is well with the world.
Team A can now select drivers purely on merit, rather than what they bring to the team in the way of money, and can say to any other sponsors who want to use the car as a mobile billboard “sorry, all the space is sold”. Sounds great – off they go and win races. In fact they do better than they did last year, and win prize money of £60m.
Add this to the money from Joe Bloggs, and now they have an income of £110m. What do they do with the other £10m? They can’t spend it. The only thing to do would be to use it as dividend payments to shareholders (which may or may not been seen as spending it, depending on the terms of the budget cap). If I were Joe Bloggs, I would now be jumping up and down with rage – I have paid out £50m in order to improve the car – buy gallons of Flo-Jiz (hail to the Hippo) or whatever, and you are giving away £10m of MY MONEY to investors – some of whom just happen to be employed by the team.
The other way round it would be for the team to say to Joe Bloggs “thanks awfully for your support, we don’t need all your money, have £10m back”. I can’t see the teams who are used to spending every penny wanting to do this, can you? Then of course, one of the team’s star drivers has a crash and needs to be replaced for a couple of races by another driver who scores less points. This year, team A finishes lower in the rankings and only earns £40m in prize money.
The commercial director now has to go back to Joe, and ask for an extra £20m to make up the budget, or persuade Joe that he no longer needs the whole car to be is favourite shade of pink, and please can we add a minor sponsor to your exclusive deal.
All far too complicated and totally unnecessary, all we need to do is to allow the teams to spend whatever they want, with a minor caveat.
In the olden days (really not long ago) it was possible to build or buy a chassis, bolt in a Cosworth DFV and go racing – that’s what most of the teams I mentioned earlier (and there were many others) did. The DFV was a great motor, and was easily available at a reasonable price. We don’t have Cosworth any more (but there are rumours…..), and of course because Ferrari, Mercedes-Benz and Renault have spent gazillions on developing the hugely complex power units, they cost an eye watering sum for small teams to buy.
So here is the caveat. You can spend what you like on developing and building a power unit, and so long as it uses X number of Joules of energy per km it can be any configuration you like, and can run on whatever fuel you like. However, you must make it available to customer teams for £1m (we can work out the energy allowed and how many customers they must offer to at a later date).
Presto – we now have a formula that has the green credentials that are deemed necessary (the energy consumption can be reduced in subsequent years to make the sport even greener – much more sensible than the over complex total fuel volume and flow rate mess we have now), with multiple variations of how to use the energy (remember the days when V12, V10, and V8 all used to compete in the same race – now we could have V6, H16, W12, Solar, wheat-germ – whatever!), and recreate the ability for Joe Bloggs to get fed up of being a sponsor, and become a trier instead.
Ah but, I hear you say, what happens when the car makers get fed up of spending gazillions? Well, so long as the engine formula remains reasonably stable, once the R&D spend is out of the way, the annual cost is just manufacturing (yes I know the R & D costs need to be amortized, but what value in terms of marketing and publicity has Infiniti had from its association with Red Bull – R&D can be recouped as marketing). If they do get fed up and take their ball home with them, with a stable engine formula, others may be tempted to join the party (Cosworth, Judd, Mecachrome, Megatron, Supertech, Mugen, Pure, Life, Audi anyone?). With a stable engine formula, and sensible aerodynamic rules, we then get back to F1 being a drivers formula, without being a one make series.
There is no way of stopping the teams spending every penny they can get – the sport just needs to ensure that triers are allowed to give it a go.
Disclaimer: TheJudge13 provides a platform for Formula 1 fans to publish their voice on matters relating to Formula 1. The views expressed in Voice of #F1 Fans are those of the contributor and not those held by TJ13.