Monisha Kaltenborn calls it as she sees it.

[Pup]

Some of the RRA is policeable. Number of people at the track, the hours they work, number of engines you can use, etc. Even the testing ban is a resource restriction of sorts. But I think F1 has gone as far down that path as they can without being overly prescriptive in the car design. Some would say they've already gone too far. I would certainly say that.

[xpensive]

Even the summer-closing is pathetic, as if no top F1-engineer didn't have a home-office anyway, they might as well require them to stop thinking after 1700.

[Pup]

Malaya, saying a cost cap will work since there's a mechanism in place to police it, which they don't need, since it wouldn't work, but everyone will police themselves, because of course they will...

"It is brilliant news," said Mallya when asked about the budget cap.

"It should have happened a few years ago, but better late than never.

"Having been announced by the F1 Commission, I think we should all work towards actually making sure it happens.

"When this was first proposed [in 2009] there was a mechanism put in place to police it.

"OK if people want to cheat and be dishonest they can, but I wouldn't necessarily say any team principal who signs off on [the budget cap] would then push the envelope.

"Once you are agreed and all together it is almost incumbent upon a team principal to make sure the rules are followed.

"Self-governance is better than imposed governance."

Asked whether that meant the teams, rather than the FIA, should police the budget cap, Mallya said the details were less important than the idea itself.

"It can be both; it can be one, the other, a combination of the two," he said.

"That is the least of the problems."

Yes, VJ, thinking and talking at the same time is hard work. Go take a nap now.

[FoxHound]

"Self governance is better than imposed governance"
And this man is a multi national business billionaire?

Better to be lucky than smart so they say...

[Pup]

Comments like Malaya's are all too common in F1 and they've always bewildered me. These are fairly successful people in the sport and you'd think they could string together a few coherent thoughts on something seemingly so important to them. Granted, Malaya inherited his wealth and does seem well on the road to destroying it all, but he did manage to start an airline and run it successfully for some years before it went tits up, and in all honesty, Force India seems to be the most grounded and competently managed of the mid pack teams. But when they say stuff like this, my mind goes through a series of questions that I can never seem to answer.

Are these people actually idiots?
Are their egos too fragile to admit that they don't know the solution?
Do they have so much on their plate that they can only give these issues the most cursory consideration?
Does each one think that his team will be the one to most benefit from the obvious loop holes?
Do they secretly want the idea to fail, or know that it will?
Do they really not want change, but feel the need to publicly say they do?
Are paddock politics so bad that they'll accept any sort of change, no matter how flawed, so are just trying to sell the idea to the press?
Are they trying to promote the sport through crisis?
Are they just just sucking up to Bernie or the FIA?
Are they trying to convince their sponsors that their teams' prospects are looking up with the new regs?

I could go on. But they say stuff like that all the time, and I only know of one member here who will listen to anyone of authority in the sport, and reliably respond "Clearly they have thought this through thoroughly and have found the best of all possible solutions."

[xpensive]

"Once you are agreed and all together it is almost incumbent upon a team principal to make sure the rules are followed."

This one must surely go down in history of naivety, or timely PC, take your pick gentlemen.

[Hail22]

No offense to Malaya or his cohorts that actually believe it'll work in the "real world", but at the end of the day Red Bull can palm off some of their CFD / body work to Red Bull aerospace technologies, Ferrari can palm some costs off to Fiat motor co and Royal Dutch Shell the list of back door opportunities with this cap "could" be endless! (that's without seeing the full details of the discussions about this cap mind you).

[raymondu999]

"Self governance is better than imposed governance"
And this man is a multi national business billionaire?

Better to be lucky than smart so they say...

I think you may have misread his comment - I think he's taking the view that "in an ideal world - all team principals would be idealists who self-govern their team and budget caps, rather than having a centralised body doing the governing" - which I would agree would probably be better, except you and I know it's not going to happen.

[Phil]

Perhaps, instead of just stating the obvious that it isn't policeable, maybe it would be more constructive to analyse what is policaeble / trackable and what isn't? It's obvious that it's inherently difficult to police something like that, but on the other hand, it's also a rather bad outlook for the sport if something doesn't change. So, perhaps it's better to police what you can? If you could get teams to at least not overspend on the things that are trackable, it's already half a win compared to a solution where there is no control over spending caps at all?

I'm not sure that matters - because you make one entity that is under the budget cap (the team) and one entity that is outside of the budget cap and therefore allowed to overspend (the design firm).

What if, similar to the responsability of a company to run a balance sheet, a F1 needs to run a complete history on their spendings throughout the year? So you would have spendings accounted for different areas, like staff, r&d, parts, etc. Now, even if a team does outsource specific developments - that would be in some degree need to be declared/protocoled. If it is, there's already no chance something that costs, say a piece of carbon that costs 100'000, could be billed for '1'000', as the policing government would then say "this is not realistic". They could maybe sell it off for half the price to make it less obvious, but then that would already be a half success rate. Now, I'm aware that some things can be policed better than others, but surely, even if you concentrate on the things you can effectively police, you're already better off towards a more stable F1 in the future?

Also bear in mind that some teams are already struggling enough to probably reach the budget caps that would be set - so it's all really for the bigger teams to keep an eye on. It's really no different to a normal taxation process or how company need to be run. Yes, you can get away with a lot within the greyareas of the law, but even there, I would imagine things to reach anarchic hights if there was no attempt to police taxation at all.

The more tricky part IMO is how do you go around if you do find that a team has been overspending? IMO - there would be a few ways without impacting the sport too much; You could disqualify them from the constructors championship (no money paid out at the end of the year) which would hurt the team, but not necessarely the driver. Even for a big team, I'd imagine that be quite a setback, even in image. Look at Stepneygate - at the end of the day, McLaren was found guilty and disqualified. The same could be done for a team that is "caught" overspending - even if that "overspending" is in the form of a team failing to convince the policing body (FIA) that their outsourcing is legit and legal.

In other words, if you do things correctly and by the book and accoarding to the rules - would it be hard for you to prove that? What if you aren't - how hard would it be to prove that you are? I would think both situations would be quite far apart if a team did attempt to do dodgy outsourcing on a large scale.

[raymondu999]

So they buy a car + upgrades at a "token" 10million quid. Not gonna change much. Besides, they cannot prove in court of law that "x pounds" is unreasonable. With taxation, it's different because it's always somehow gonna find it's way back thanks to the wide jurisdiction. F1 has limited jurisdiction.

[Phil]

I'm not sure I follow. Of course if you simplify it to the degree that if you only have a car that costs 10 million quid, there's no way to police it. The point is, you break it down into individual expenses. Every expense would need to be accounted for. Now, your point is, as a businessman, that it's relatively easy to set up a fake company and outsource things to effectively yourself to cheat your way out complying to a budget cap. Fair enough. But if you have some entity that polices expenses or has access to your books where the costs and spendings (for individual components, R&D, what not...) are protocoled, there is the potential that some weird transactions might show up. Like for example a component that you are outsourcing to your own fake shell company that develops the part for a price and sells it back for a hundreth of its expense. If a steward then sees this, it would raise questions as to how that component (if it's a widely accepted part where there is a common ground on what these things can and can not cost) is that cheap - and a resulting investigation could then perhaps bring to light that the team in fact is 'overspending'.

Now, I'm not saying that overspending will be impossible. That's not the point. The point is, by setting up rules to police the expenses you *can*, you might be minimizing the overspending and it would work towards making F1 a bit more of a level playing field - at least in the context that a big team like RedBull can not spend 10+ times the amount a midfield running team could only dream of.

[tuj]

Well one step would be to stop subsidizing travel for the top X teams or subsidize travels for all the teams. A second step would be more equitable distribution of prize money. Both of those are tangible mechanisms that would help control costs. I also think there should be a salary cap for drivers, team principals, car designers, etc. There should also be a minimum salary for personnel as well. The teraflop restrictions on CFD need to be modified to keep up with technology.

[GitanesBlondes]

Phil, I'm afraid all of that is wishful thinking. There is no way to police a budget cap effectively, and it's going to be down to whomever can hide everything better than the rest that determines who has an advantage. The only way to tamp down on costs are to see where they are being spent, and simply rewrite the technical rules to the point where there is nothing to develop for aero. The F1 operations of teams will shrink drastically because teams are not going to maintain large staffs if there is nothing for them to do.

The problem with the McLaren 2007 saga as an example is that do you or anyone else really believe such things were not going on prior to 2007? Sure they got kicked out of the WCC, but Mosley had his own vendetta against Ron anyway so I don't look at that as being representative of "justice" being served.

[GitanesBlondes]

Well one step would be to stop subsidizing travel for the top X teams or subsidize travels for all the teams. A second step would be more equitable distribution of prize money. Both of those are tangible mechanisms that would help control costs. I also think there should be a salary cap for drivers, team principals, car designers, etc. There should also be a minimum salary for personnel as well. The teraflop restrictions on CFD need to be modified to keep up with technology.

I don't see any of these as being remotely reasonable. Salary cap for employees? Ludicrous. You're essentially trying to force socialism on F1, and what you will wind up with is a drab and uninspiring race series because hard work is no longer rewarded.

[Moxie]

Since I first learned about the Ferrari payment, the Ferrari veto and the travel subsidies for top teams this issue has been nagging me. The problem as I see it is not the total "cost" of F1 but the inability to field a grid of 12 teams due to the financial disparity between the front and rear of the gird. This is exasperated the fact that the back markers must meet minimum performance standards just to compete (the 107% rule) That is a lot of money for teams and sponsors to throw around for nothing.

I don't think a "budget cap" is the answer either. However, I believe that budgets can be more or less "capped" in a manner that needs little policing. Poker players call it pot odds. The financial incentive for the financial risk is the prize money. Based upon the size of the pot and the strength of the hand each player will determine the appropriate size of their bet. Players with week hands fold, or take long odds on winning. It is simple risk vs. reward.

Apply this to F1 and the concept will be as such. The additional prize money for taking first place must give incentive for teams to build fancy cars and improve them through the course of a season. At the same time since this is a racing sport, it is imperative to actually keep players in the game. If F1 wants 12 teams to take the financial risk, they must dangle a reward worthy of that risk.

This whole pot odds strategy, of course, fails to include the role of sponsorship. As I do not know real world numbers I can only present this in terms of general forces. For the most part the value of advertizing real estate increases as one moves towards the front of the grid, this would imply that the incentive to win still exists. However, we have seen in many cases that the need for sponsorship is so great that some teams have made questionable choices for their driver line up because of the money the driver brings to the team. If the incentive for sponsorship money outweighs the incentive to win then the whole pot odds structure is lost. Indeed the whole idea of competition is lost.