The end of the budget cap?
Discussion
In the Times today there is an interview with Bernie Eccs in which, amongst other things, he virtually bins and suggestion of a valid budget cap.
He says, in essence, that the FiA will not police how much is spent but the teams' own auditors will. This is, to say the least, a wierd suggestion.
It comes from Bernie, who has nothing to do with the regs, so one wonders if it is after full consultation with his joined-at-the-wallet mate Mosley. the first thought that crossed my mind was whether the teams would be able to avail themselves of the same auditors as Enron.
So with total budgets, even under the cap, being in the region of £150m, this flexible approach will put them up to where they are now.
It seems to me to be very like having two referees at each football match with, say, Manchester United paying for one to referee them and Arsenal paying for their own referee.
A very, very strange suggestion.
Further he's stated quite clearly that the two-tier system is dead.
The biggest question is whether this statment has been made with the agreement of Mosley. If it has then it is a massive climbdown. If not then . . . well, if not then things have moved on apace.
This tends to suggest that the Ferrari threat of opting out of GP racing is viewed as very real. Have they already made the decision to pull the plug? Is this a last ditch effort by Eccs (or even a joint Mosley/Eccs ploy) to drag them back into the fold before their meeting next week.
If Ferrari do not sign on the 29th then Mosley could, justifiably, suggest that these new proposals were the invention of Eccs and not a result of consultation and that he hadn't backed down.
All very odd.
http://www.timesonline.co.uk/tol/sport/formula_1/a...
He says, in essence, that the FiA will not police how much is spent but the teams' own auditors will. This is, to say the least, a wierd suggestion.
It comes from Bernie, who has nothing to do with the regs, so one wonders if it is after full consultation with his joined-at-the-wallet mate Mosley. the first thought that crossed my mind was whether the teams would be able to avail themselves of the same auditors as Enron.
So with total budgets, even under the cap, being in the region of £150m, this flexible approach will put them up to where they are now.
It seems to me to be very like having two referees at each football match with, say, Manchester United paying for one to referee them and Arsenal paying for their own referee.
A very, very strange suggestion.
Further he's stated quite clearly that the two-tier system is dead.
The biggest question is whether this statment has been made with the agreement of Mosley. If it has then it is a massive climbdown. If not then . . . well, if not then things have moved on apace.
This tends to suggest that the Ferrari threat of opting out of GP racing is viewed as very real. Have they already made the decision to pull the plug? Is this a last ditch effort by Eccs (or even a joint Mosley/Eccs ploy) to drag them back into the fold before their meeting next week.
If Ferrari do not sign on the 29th then Mosley could, justifiably, suggest that these new proposals were the invention of Eccs and not a result of consultation and that he hadn't backed down.
All very odd.
http://www.timesonline.co.uk/tol/sport/formula_1/a...
The whole cost cutting thing is a complete mess and a massive over-reaction to media recession hype. If teams desperately need to save money (and I'm sure some of them do), they will do it anyway without the need for badly conceived regulations from the FIA. The championship is fast becoming a bad joke.
I don't think he has said the two tier system is dead. You could equally take this extract to say that he expects all teams to agree to, and limit themselves to, the £40M cap:
"He said that the prospects of there being a two-tier championship in 2010, with cars running under two sets of technical rules, is “slowly disappearing”. He believes that the £40 million figure is right and is confident that all the present teams, including Ferrari, will accept the rules."
Frankly I don't think listening to BE about this is particularly relevant, given the other comments from Tony Purnell today on the Autosport website about the budget cap discussions.
My expectations are that there will be a compromise reached between the teams and the FIA such that the £40m cap is phased in over a period of time (maybe three years) and that the technical freedoms proposed for the budget capped teams will be reduced.
In essence, I think the FIA have more to lose and hence will need to save some face by maintaining some of the elements of their proposals while, in effect, allowing the teams to carry on reducing budgets themselves in a less dramatic manner.
If this happens then MM's position is less strong, and I would expect FOTA to next turn their attention to FOM, who I expect are currently more than a little worried about the prospect of their product being massively devalued by running a race series of privateer teams with the same engines.
Nick M said:
My expectations are that there will be a compromise reached between the teams and the FIA such that the £40m cap is phased in over a period of time (maybe three years) and that the technical freedoms proposed for the budget capped teams will be reduced.
From Mosley's point of view, ditching the two-tier proposal and a change to the budget cap is not a compromise, it is a rejection. The teams want a budget cap so one on their terms will be their proposal.The question remains, though, whether Mosley knows about these suggestions from Eccles.
The critical time is the 29th. If Ferrari and other teams refuse to sign by that date then F1 is dead as we know it as FOM will have no assets. Who wants to watch unknown teams meandering around some circuit is a country they can't place on a map? Certainly not those whom Vodaphone want to impress with their corporate image. That will put FOTA in the driving seat as Mosley's authority will be gone. That would not be a compromise.
It is my assumption that Mosley will back down completely and accept the team's proposals. Anything else will be a vote of confidence and one that he can't get some mate of his with a brother with a shrubbery fund to fiddle. He will be of no consequence, his sole function keeping the seat warm until someone important comes in to replace him.
If he doesn't back down - well, it's anyone's guess I suppose. If Ferrari doesn't sign on the 29th then Berie's carefully crafted support system collapses.
If the teams don't sign then someone from the FiA will either come in with some form of compromise where they accept what FOTA demands, or else F1 will become a joke.
I'm supposed to be writing at the moment but I just can't concentrate. I keep trying to work out what the options are. Is it possible that Bernie's intervention is a good sign? I don't think I could recognise a good sign for F1, it being so long since I've seen one.
I suspect that agreed notional costs will end up being the solution.
Say that FOTA agree that it should cost a notional £1 million to design, develop, and build a front wing. Then it does not matter if it actually costs McLaren twice as much to do it or if Prodrive can do it for 75% of the notional costs. It does prevents McLaren having a new wing, diffuser etc for every race circuit as it is easy to spot when they have used up their notional £40 million budget. The same goes for operating a pit crew, or buying-in wheel and brake systems.
Drivers and engines are already out of the bottom line so I am sure that it is much easier to get a compromise. However, I can fully understand why the manufacturers do not want FIA auditors crawling all over their books to see how much they pay the guy who sweeps the factory floor.
Say that FOTA agree that it should cost a notional £1 million to design, develop, and build a front wing. Then it does not matter if it actually costs McLaren twice as much to do it or if Prodrive can do it for 75% of the notional costs. It does prevents McLaren having a new wing, diffuser etc for every race circuit as it is easy to spot when they have used up their notional £40 million budget. The same goes for operating a pit crew, or buying-in wheel and brake systems.
Drivers and engines are already out of the bottom line so I am sure that it is much easier to get a compromise. However, I can fully understand why the manufacturers do not want FIA auditors crawling all over their books to see how much they pay the guy who sweeps the factory floor.
rdjohn said:
However, I can fully understand why the manufacturers do not want FIA auditors crawling all over their books to see how much they pay the guy who sweeps the factory floor.
More to the point, I'm not convinced it could be enforced.Companies obviously have statutory requirements to file accounts, VAT returns, tax returns, etc., but I doubt that a governing body would have sufficient authority to be able to demand to see the books of each race team in all of the countries where they're based. The auditors would also need to ensure that they had access to properly skilled teams in each of those countries and that's not going to come cheap.
Fittster said:
Has any sport ever been able to keep to a budget cap?
The 1s where the equipment is handed out by lottery before the event, in theory, yes.VW's new Beetle Cup, for example.
Doesn't stop some people thinking some others have been buying drinkies for the admin people though.
It will certainly be interesting to how this turns out. As I see it, these are the possibilities
1. Max stands firm. Ferrari, Toyota, BMW, Red Bull/TR & Renault leave.
2. Max stands firm. Ferrari leave, the others cave.
3. Max stands firm. All teams threatening to leave chicken out.
4. There is a compromise on the budget cap that Ferrari et al can live with.
5. Max caves. FOTA budget cap is adopted.
The consequences of each scenario would be
1. F1 withers on the vine and dies quickly as sponsors run for the hills. Max is remembered for all time as the man who killed F1.
2,3. F1 continues, but is a shadow of its former self, regulated by a now power-mad FIA.
4. F1 continues but Max´s authority is destroyed and his position becomes untenable.
5. F1 continues but there are changes at the FIA after Max has no option but to fall on his sword.
If I were a gambling man I would go for scenario 5, but I´d get the missus to put a few quid down each way on scenario 4. I´d also have a side bet on Bernie coming up smelling of roses.
1. Max stands firm. Ferrari, Toyota, BMW, Red Bull/TR & Renault leave.
2. Max stands firm. Ferrari leave, the others cave.
3. Max stands firm. All teams threatening to leave chicken out.
4. There is a compromise on the budget cap that Ferrari et al can live with.
5. Max caves. FOTA budget cap is adopted.
The consequences of each scenario would be
1. F1 withers on the vine and dies quickly as sponsors run for the hills. Max is remembered for all time as the man who killed F1.
2,3. F1 continues, but is a shadow of its former self, regulated by a now power-mad FIA.
4. F1 continues but Max´s authority is destroyed and his position becomes untenable.
5. F1 continues but there are changes at the FIA after Max has no option but to fall on his sword.
If I were a gambling man I would go for scenario 5, but I´d get the missus to put a few quid down each way on scenario 4. I´d also have a side bet on Bernie coming up smelling of roses.
Stupid rule that can't be policed. I understand the £40m proposed cap excludes driver's wages (amongst a few other things.) What's to stop any of the big spenders paying their drivers say £250m, on the proviso that the driver must pay for their own tyres, fuel, engines etc etc. Driver ends up taking home the same amount in his pay packet as he always has done, and the teams get all their development work paid for by the driver i.e. outside the capped budget.
Gassing Station | General Motorsport | Top of Page | What's New | My Stuff