Budget caps have become some sort of an item lately. It has passed my mind for years, and I even tried to gauge your thoughts about it in my article “La revolucion”.
Liberty Media is interested to learn how think can be kept financially feasible for the future. Ferrari-boss Marchionne commented on it that it wouldn’t be possible.
A couple of years ago, Max Mosley did some work on the possibilities of budget caps. His idea was to give total liberty in anything else, as long as they would agree to a cap.
Mosley stated “They [the teams] would realise that for 100 million [dollars] you could have great motorsport and build technically advanced cars.”
In 2009 FIA stated in relation to bringing down cost: “Two main philosophies have emerged, either i) reduce activity levels through very restrictive technical rules, plus a degree of standardisation if required; or ii) restrict the money that teams are allowed to spend (cost capping). The FIA believes that unfettered technical competition is part of Formula 1’s DNA, and would like to see this flourish, but in an environment of strong, responsible and innovative management, not a spending race. For these reasons cost capping is preferred.”
It is a major issue that the more time passes, the more teams sink money into their efforts. If the sport cannot regulate itself, will it compete itself to death?
New owners Liberty Media has put forward some of their ideas more and better of social and other digital media, more races, increased sponsoring (!) and finding new markets for the sport to grow.
The question I already asked in “la revolucion” was: will it be more entertaining? Will faster cars make the sport more fun to watch? Will a 3 layered front wing which optimises air flow 5,4% better than before and cost 15M USD make a fan watch longer or more often? Will a 400 Km/H car (GPDA’s Alexander Wurz’ idea) be more interesting to watch than a 350 Km/H car?
I suspect that FIA already knows the answer. We went from V12’s, to V10’s (that sound!!!), to V8’s and now V6 turbo’s. All in an effort to keep power down, and drive manufacturers to think about fuel economy (in an effort to keep F1 connected to the real world?). What is next? Inline 4’s?
Oops, been there, done that. Inline 4’s were the bhp 1000+ monsters from they 80-ies. They were extremely powerful, and sucked gas like, well, uh,, somebody badly in need of a drink.
FIA saw this development track as a dead-end and changed engine regulations.
FIA has been changing regulations to keep manufacturers on the move. The last time FIA changed the rules, all manufacturers were complaining about the cost. Obviously this is ridiculous, in the sense that they themselves set the budget for engine development. If it is too expensive, then don’t do it. “Oh yes, but then we might have a possibility to not have the most powerful engine”, well duh… with that kind of reasoning you will always spend to the max and beyond, and it will always be too expensive.
2017 engines will see another rise in power, bordering on the 1000 bhp. If FIA doesn’t limit things, in 2 years time we will be around 1200bhp. Will F1 fans be happier because of it?
More power means more speed, more speed means that cars will pass the straights even faster. Faster means less time to overtake! If a circuit straight take 10 seconds today, it could take 8 seconds tomorrow, obliterating any chances to do a slipstream. No slipstream, no overtaking: a long parade of really fast cars. Or would we then ask FIA to lengthen the straights and enlarge circuits? Is this line of thought really that awkward? What is it that we want?
And then there is the difference between the front- and the back end of the field. The top 4 has enormous budgets, the privateers have a bad time. Manor, a company that has been racing cars for years, is threatening to go belly-up since it can no longer afford F1. It can’t be their racing hearts, because they do love racing.
IMHO there is just a single solution: a budget cap. Teams really shouldn’t be needing 400 M USD per year. Yes, F1 is hugely popular. Yes, people buy a Mercedes because they saw a Mercedes win at a Grand Prix, and yes, people do drink Red Bull because it is hip and it is fast. But some realism should be put in place as well. The combined 2015 budget of all teams amounted up to 2,7 B USD! (Bruznic: tnx for the numbers!) Imagine what 2.7 B USD do for a development country, world hunger, and if you don’t care about other people dying, for the Mars One project? I might be a little crude here, and even I don’t want to go without F1, but all F1 is in the end is entertainment. This is why I started asking the question: will all this money make F1 more fun to watch?
It is clear teams are not ready for budget caps. Discussions lead to teams threatening to start their own championship in 2009. But times are changing. Would new ownership be the trigger to help put new ideas in motion?
Liberty will put in around 8 B USD to buy F1. They are a corporation with a financial target. They want to see a return on investment. A 10% return would be optimistic, but 5% would be low. No wonder they are looking for ways to stop this money-guzzling.
Marchionne’s remarks that it wouldn’t be possible are mainly driven by the (historically correct) assumption that teams would only find new ways of circumventing budget regulations. It is a bit like to Russian doping scandal: as long as you get away with it, it is accepted. As long as people don’t know, nobody notices the difference.
F1 itself has seen this kind of reconnoitring of limits many times: BAR with it’s hidden fuel tanks, Renault asking Piquet to crash his car into the barriers, McLaren looking at Ferrari designs during spygate, even Michael Schumacher parking his Ferrari at the Rascasse corner in Monaco. One might debate whether things are legal when looking at the rule-book. However, we all know this is not the sportsmanship we want to see.
F1 teams need to take a long look in the mirror. Yes, there are ways to cheat, and cheaters can probably dominate the sport for years. However, it should mean financial suicide when the world finds out. F1 fans are not looking for the best spreadsheet jockeys, F1 fans are not about worshipping the best tax-avoiders either.
Maybe I am only talking for myself (and do leave a message below if that is the case) but I like the drama of people, teams and cars failing, surcoming and winning. There needs to be a bit of drama. Teams do not need 600 people to create drama, teams should not need 400M USD to be a a real championship contender. Too many people involved, too much money flowing: there is no more room for drama and excitement.
A budget cap would bring it all back. Support “la revolucion”..