2021 Cost Cap Rumours and Speculation

[chrisc90]

Not sure about the you damaged my car sort of stuff.

I mean what if someone knocks a end plate off? There’s a very good chance the team can repair just a end plate so how would you decide the cost on that?

You could also get teams saying it’s a bigger repair than needed in order to get extra budget. Who decides what’s salvageable and what isn’t?

It would be open to too much exploitation in my opinion.

[Just_a_fan]

The whole question of the budget cap should be done on a straight forward basis as follows: all teams are assumed to be guilty of overspending unless they can absolutely and clearly show otherwise. Fail to demonstrate your compliance and you are entirely disqualified from the season - team and drivers.

There are reports that it is taking a long time for the FIA to check the books of the teams - that suggests the teams are making it as hard as possible for the FIA. That's the wrong approach from the FIA. They should just say "you prove your compliance in a simple and clear manner or you are out. If we can't quickly and easily see that you have complied then you are deemed to have overspent". No "innocent until proved guilty" as it's much too easy to make the books so complicated that proving guilt is all but impossible in the time frames available. It must be on the teams to prove their compliance. If they can't, then assume they have overspent.

That would put an end to this issue going forward from this season onwards. Otherwise, we will have a team or two being rumoured to be over budget each season and it will just make the whole thing look ridiculous. The budget cap should not be a headline issue for the sport - it should be entirely straightforward and without any sensationalism for the media to stoke.

[Big Tea]

What if the FIA or Liberty would return some of the money for broken parts involved in crashes?

Example: lest say a front wing costs between 150k$ (Haas) and 200k$ (RB) but Liberty would return 100k$ to anyone involved in a crash regardless of who it is.

I see this as a win-win for both sides: Liberty get some drama (SCs can shuffle race order, ie. Singapore 2022) and Teams receive something back (although mistakes are still costly points wise). Of course, some limits would have to be imposed, like really being in a crash, parts affected in a crash (no new RWs in a head-on collision), etc.

A "you damaged my car"-fund would be a good idea. However, I doubt a "sport" ran by rich, white Americans who are trying to maximize profits is going to hand out money.

It would not work anyway as both cars have steering wheels and brakes. Imagine the legal costs.

[Just_a_fan]

What if the FIA or Liberty would return some of the money for broken parts involved in crashes?

Example: lest say a front wing costs between 150k$ (Haas) and 200k$ (RB) but Liberty would return 100k$ to anyone involved in a crash regardless of who it is.

I see this as a win-win for both sides: Liberty get some drama (SCs can shuffle race order, ie. Singapore 2022) and Teams receive something back (although mistakes are still costly points wise). Of course, some limits would have to be imposed, like really being in a crash, parts affected in a crash (no new RWs in a head-on collision), etc.

A "you damaged my car"-fund would be a good idea. However, I doubt a "sport" ran by rich, white Americans who are trying to maximize profits is going to hand out money.

It would not work anyway as both cars have steering wheels and brakes. Imagine the legal costs.

Classic case of "knock for knock" that happens every day with road car insurance claims where fault can not be fully attributed to one party.

I guess the teams would have to rely on the stewards and their investigation and how they attribute blame. And we all know how contentious that is!

[Big Tea]

A "you damaged my car"-fund would be a good idea. However, I doubt a "sport" ran by rich, white Americans who are trying to maximize profits is going to hand out money.

It would not work anyway as both cars have steering wheels and brakes. Imagine the legal costs.

Classic case of "knock for knock" that happens every day with road car insurance claims where fault can not be fully attributed to one party.

I guess the teams would have to rely on the stewards and their investigation and how they attribute blame. And we all know how contentious that is!

Mercedes flicks a rear wheel of a Haas, which spins into a Ferrari which takes a Red Bull into the barrier and a Williams gets sideswiped into an Alfa and both follow into the rail. Who pays

[Just_a_fan]

Not sure about the you damaged my car sort of stuff.

I mean what if someone knocks a end plate off? There’s a very good chance the team can repair just a end plate so how would you decide the cost on that?

You could also get teams saying it’s a bigger repair than needed in order to get extra budget. Who decides what’s salvageable and what isn’t?

It would be open to too much exploitation in my opinion.

Of course, the issue is really only a problem, in terms of the budget cap, at the front end of the grid. Some of the teams further back don't even get as far as the budget cap limits normally so any costs associated with a shunt are just usual stress for them - how are they going to find the money in the first place? A top three team has the opposite problem - how do they deal with it without the risk of overspending with respect to the budget cap.

[Just_a_fan]

It would not work anyway as both cars have steering wheels and brakes. Imagine the legal costs.

Classic case of "knock for knock" that happens every day with road car insurance claims where fault can not be fully attributed to one party.

I guess the teams would have to rely on the stewards and their investigation and how they attribute blame. And we all know how contentious that is!

Mercedes flicks a rear wheel of a Haas, which spins into a Ferrari which takes a Red Bull into the barrier and a Williams gets sideswiped into an Alfa and both follow into the rail. Who pays

If one followed the road car route, Mercedes. Or, in road car terms, Mercedes's insurers would. Each party would go after the party that caused them the issue - so Red Bull would go after Ferrari, who would go after Haas who would go after Mercedes. Mercedes would foot the bill for all of them, ultimately. If someone spins whilst avoiding an incident, then that's their own fault.

As you said before, a total nightmare to sort out.

[Moving Chicane]

Classic case of "knock for knock" that happens every day with road car insurance claims where fault can not be fully attributed to one party.

I guess the teams would have to rely on the stewards and their investigation and how they attribute blame. And we all know how contentious that is!

Mercedes flicks a rear wheel of a Haas, which spins into a Ferrari which takes a Red Bull into the barrier and a Williams gets sideswiped into an Alfa and both follow into the rail. Who pays

If one followed the road car route, Mercedes. Or, in road car terms, Mercedes's insurers would. Each party would go after the party that caused them the issue - so Red Bull would go after Ferrari, who would go after Haas who would go after Mercedes. Mercedes would foot the bill for all of them, ultimately. If someone spins whilst avoiding an incident, then that's their own fault.

As you said before, a total nightmare to sort out.

Maybe I was misunderstood but the "Crash fund" would cover anybody involved in an accident. However that would cover only half (or any other agreed ammount) of the cost. Car X would receive 200k$ for FW + front right suspension. Car Y would receive 1,5M$ because it flew over the barrier.

However, I can see this would get very complicated very fast.

Anyway, back on topic. How does this financial screening work? Who does it?

[Hoffman900]

The crash fund / funding crashes is ridiculous. It’s a risk built into the sport.

In cost cap American sports, if a player gets injured by another opponent, the other team isn’t responsible. Racing should be no different.

These type of thought experiments is what makes F1 needlessly complicated.

[ispano6]

The crash fund / funding crashes is ridiculous. It’s a risk built into the sport.

In cost cap American sports, if a player gets injured by another opponent, the other team isn’t responsible. Racing should be no different.

These type of thought experiments is what makes F1 needlessly complicated.

It's ridiculous to compare American contact sports with F1. When you're driving down the street and crash into another car, your insurance company which you pay for covers the damage and hospital costs. You can also be sued, separately. Concussions in contact sports have led to lawsuits as well as payments for damages. To say that a team or another driver is not responsible for career ending or possibly life-ending injuries is gross negligence. Consider the team the insurance company of the driver.

[Jolle]

The crash fund / funding crashes is ridiculous. It’s a risk built into the sport.

In cost cap American sports, if a player gets injured by another opponent, the other team isn’t responsible. Racing should be no different.

These type of thought experiments is what makes F1 needlessly complicated.

It's ridiculous to compare American contact sports with F1. When you're driving down the street and crash into another car, your insurance company which you pay for covers the damage and hospital costs. You can also be sued, separately. Concussions in contact sports have led to lawsuits as well as payments for damages. To say that a team or another driver is not responsible for career ending or possibly life-ending injuries is gross negligence. Consider the team the insurance company of the driver.

Just imagine you are able to be sued because you made an error of judgment on track. Or on any sporting field. That is not how it works.

By the way, there are racing insurances so…

[langedweil]

Mercedes flicks a rear wheel of a Haas, which spins into a Ferrari which takes a Red Bull into the barrier and a Williams gets sideswiped into an Alfa and both follow into the rail. Who pays

That's easy, MB
But they'd be broke by race 1, so dunno ..

[DChemTech]

I don't see so much of an issue with crash costs. As mentioned by others, part of the game. I see bigger issues with the impact of the mid-season rule changes that the FIA introduces from time to time. Not just sportive upsets, they may also force coslty redesigns, and do not hit all teams equally.

[Big Tea]

Mercedes flicks a rear wheel of a Haas, which spins into a Ferrari which takes a Red Bull into the barrier and a Williams gets sideswiped into an Alfa and both follow into the rail. Who pays

That's easy, MB
But they'd be broke by race 1, so dunno ..

Not easy, because the Merc would only have hit the Haas causing no damage. The Haas his the Ferrari probably causing some damage. Ferrari hits the Red Bull causing damage, and it hits the fence. the Williams was hit by the Ferrari and/or the Red Bull, none of which were touched by the Merc, only the Haas which could have steered out of the crash (yeh, right but prove it ) The Alfa and Williams were damaged by hitting the barrier.

Knowing what happened is not good enough, it has to be proven. I believe if it was on public roads, the merc would escape, the Haas liable for the Ferrari, the Ferrari for the Red Bull, and I would not even guess the rest other than the sideswipe damage attributed to Williams.

All cars have steering and breaking, so could have avoided the contact unless they were driving too quickly for the conditions

[Edax]

The whole question of the budget cap should be done on a straight forward basis as follows: all teams are assumed to be guilty of overspending unless they can absolutely and clearly show otherwise. Fail to demonstrate your compliance and you are entirely disqualified from the season - team and drivers.

There are reports that it is taking a long time for the FIA to check the books of the teams - that suggests the teams are making it as hard as possible for the FIA. That's the wrong approach from the FIA. They should just say "you prove your compliance in a simple and clear manner or you are out. If we can't quickly and easily see that you have complied then you are deemed to have overspent". No "innocent until proved guilty" as it's much too easy to make the books so complicated that proving guilt is all but impossible in the time frames available. It must be on the teams to prove their compliance. If they can't, then assume they have overspent.

That would put an end to this issue going forward from this season onwards. Otherwise, we will have a team or two being rumoured to be over budget each season and it will just make the whole thing look ridiculous. The budget cap should not be a headline issue for the sport - it should be entirely straightforward and without any sensationalism for the media to stoke.

I think the thought is nice but the reality less simple. I am an engineer by trade but I cannot help to notice that in every project I worked on the financing was more complex than the thing we tried to develop in the first place and usually by an order of magnitude.

As a company you try to minimize costs especially on development. That means that you try to make full use of all available tax deductions, grants, local employment schemes (subsidized labor) etc. You try hedge your risks and amortize expenses. That all leads to interesting company structures and even more interesting contracts.

No doubt that the teams have put in their proof that they comply to the cap, but I can also understand that it takes a while to check it and that questions remain.

And that is not necessarily a sign of bad will but also the desire to make a buck go as far as possible.