Parr says only eight teams next year, three car teams.

[emaren]

Personally, i think F1 cost control is out of control, and the regulations are out of control.

I agree, cost control has never been a part of F1, even in the 1970's teams spent every single penny that they could muster going faster. This has never changed.

What has changed is that the regulations have tightened up so much that the only gains are not only minute, but they cost a fortune.

Aero is pretty much the only avenue that the teams are able to pursue now, even with the limits to processing and wind tunnel use this is still ridiculous. I find it very hard to get excited abut the latest Williams engine cover or the new Mercedes monkey seat. They do not add to the racing, but they consume an inordinate amount of resource to develop.

The regulations are now way too tight to allow any innovation.

The whole thing needs a re-think...

[MOWOG]

Welcome, brother!

Yes, but a re-think by whom? According to press reports today, Bernie was denied reinstatement to the board of Delta Topco, whatever that is (sounds suspiciously like an English translation of capo di tutti capos to me. ) and may actually be thrown overboard within the week.

Jean Todt is an ineffectual figurehead.

And the teams couldn't agree the sun rises in the East if you put a gun to their collective heads.

Formula One is like an America's Cup catamaran without a rudder. I predict stormy waters ahead.

[xpensive]

Everything going wrong, including obscene spending, began with MrE in the late 80s and accelerated with MrM in the early 90s.

I'm afraid there will be a big crash in 2015 with another 2 or 3 teams falling off, costs way too high and sponsors hard to find.

[emaren]

Everything going wrong, including obscene spending, began with MrE in the late 80s and accelerated with MrM in the early 90s.

That late ?

I seem to remember Renault upsetting the apple-cart with the Turbo's in the late 1970's. From memory, at that point, the sport was really dominated by DFV's, Ferrari and their glorious 12's and the oddballs running Alfa engines.

Obviously all that extra power from about 1979 onwards needed harnessing, but the rules were relatively free regarding what was and wasn't legal. So all sort of crazy stuff emerged.....

However, I really think that the banning of ABS, traction control and the excessive knee-jerk reactions following the deaths of Ratzenberger and Senna put us on the path to the over-restrictive rules that promote huge aero investment.....

[Moxie]

Time for a thought experiment.

You are at a table with 11 other people. You each ante $10,000 , so there is a pot of $120,000 in the center of the table. There are no cards in this game...just people bidding on the pot. Once you bid on the pot the money is gone. The pot does not increase, and you will not get the money back.

Scenario 1) After the ante you have a bankroll of only $10,000. You are aware that some of your competitors have bankrolls that exceed $300,000. At what point do you stop playing this wastefully expensive game, and keep what is left of your bankroll?

Scenario 2) You have a bankroll of $300,000. At what point do you stop bidding for $120,000? Are you willing to take a loss just to "win" this game? How much are you willing to lose?

How do the dynamics of the game change if the ante is only $5,000 and the resulting pot is only $60,000.


I'm hoping this thought experiment demonstrates why the problem here is not the costs per se.

The problem in F1 is caused by the economic influences which motivate the top teams to spend so much to win the pot, and at the same time require the bottom teams to take financial risks without providing rewards of proper proportion.

[flatlander_48]

It has the effect of putting the bar too high for new teams wanting to enter the sport. Also, if a teams craps or just decides to leave the sport, it effects 3 cars and not just 2.

[Hail22]

I have a feeling in my bones that we'll have an announcement confirming / denying that Formula 1 will field eight teams with 3 cars each for the 2015 season,around the Austin Grand Prix.

Will it happen? I have a weird feeling we'll be seeing three car teams next year or 2016.

[Richard]

I'm hoping this thought experiment demonstrates why the problem here is not the costs per se.

The problem in F1 is caused by the economic influences which motivate the top teams to spend so much to win the pot, and at the same time require the bottom teams to take financial risks without providing rewards of proper proportion.

Indeed, the problem is that the teams will spend every penny they get. The big teams think "How are we going to spend £300m this year?". The FIA can change the car regs as much as they like, but those front teams will still spend £300m. So the answer is to spread the cash more evenly.

[xpensive]

...
Indeed, the problem is that the teams will spend every penny they get.
...

I'm not totally convinced that is true, I don't believe that Mateschitz or Ferrari sees it as a self-serving goal to waste their money?

After all, the top teams actually makes a profit, or at least used to, how would that be possible if they wasted every penny?

[Richard]

Yes, "every penny" is after deductions for tax, financing debt, property costs, owners wanting to draw down some return on investment, etc.

My point is that they don't think "How much money do we need to build a car" and try to reduce cost of production like any other business would. Instead they think "How can we afford to spend" and try to maximise the production effort (hence maximise total production cost).

The issue is that the F1 is only too expensive for small teams because the big teams spend so much. They spend that much because they are in arms race and because they can. We can't stop the arms race because that the point of a competition. So the focus should be on the supply of money. More even distribution of the prize money could easily make F1 affordable for the teams at the bottom. It wouldn't need all the complication of the RRA either.

[Moxie]

Yes, "every penny" is after deductions for tax, financing debt, property costs, owners wanting to draw down some return on investment, etc.

My point is that they don't think "How much money do we need to build a car" and try to reduce cost of production like any other business would. Instead they think "How can we afford to spend" and try to maximise the production effort (hence maximise total production cost).

The issue is that the F1 is only too expensive for small teams because the big teams spend so much. They spend that much because they are in arms race and because they can. We can't stop the arms race because that the point of a competition. So the focus should be on the supply of money. More even distribution of the prize money could easily make F1 affordable for the teams at the bottom. It wouldn't need all the complication of the RRA either.

Front runners receive two rewards for their investment: prize money and TV exposure. The value of that exposure must not be ignored. The amount of TV time should also be adjusted to give teams a properly proportioned return on investment. Let me be clear here; the production should be dictated by the entertainment value of the action on the track during green flag racing. Safety car periods, the pre-race in-car quali lap, pre-race interviews, are all good opportunities to reward rear teams with exposure.

[xpensive]

In a perfect world, all teams should also be given the same points in the race, regardless of placing.

[FoxHound]

I fail to see why any focus should be given to also-rans. If they perform well, and earn the right to get coverage then fair enough.
But if we start propping them up giving them extra money, more coverage etc on the basis that they are perennial back markers, then you start to reward failure.

We can look at teams net spend as why they fail, but F1 is a wide and deep pond. This should have been the first question on their minds BEFORE entering competition.
Were they (Caterham, HRT, Marussia) lured into F1 on false pretences? There is a good question.

I think if we have 3 "joker" teams, with the ability to purchase any current chassis, and engine along with aero updates, this could help alleviate the competitive problem.
Caterham have a budget of circa $110 million. If engines cost $26 million, a chassis with aero along with technical support should be mandated at around 60/70 million.

This way, they get to be competitive for the same cost or less, than if they go it alone.

You could have many variations of the concept. Perhaps picking and choosing updates, allowing them to do their own if they so choose, or purchase updates they know gives a performance upgrade.
Factory teams will also earn more money as development parts costs can be offset by potential purchase.

Seems a damn sight more reasonable than getting all that money burnt for languishing in 22nd place.

[flatlander_48]

I fail to see why any focus should be given to also-rans. If they perform well, and earn the right to get coverage then fair enough.
But if we start propping them up giving them extra money, more coverage etc on the basis that they are perennial back markers, then you start to reward failure.

That's just it. It is not "propping them up". It is distributing the monies derived from F-1 in a more equitable fashion. When BE decided that only the first 10 places would be involved in the payouts, right away the 11th team gets screwed. He's trying to force the 3-car deal to happen. Also, the payouts decrease sharply with each succeeding place down the grid. There is no sense of fairness about it at all.

So, suppose you do have 8 teams and someone like Gene Haas comes along. If the grid is capped at 24 cars, who doesn't field 2 cars in order for a new team to join?

That's the thing about stupid ideas. Because the logic was faulty from the beginning, everything that happens afterwards becomes a special situation.

[Moxie]

I fail to see why any focus should be given to also-rans. If they perform well, and earn the right to get coverage then fair enough.
But if we start propping them up giving them extra money, more coverage etc on the basis that they are perennial back markers, then you start to reward failure.

1) Because it is boring to watch a "competition" where one team wins in excess of 60%of the races, and the second place team wins the remaining races. It is like watching the Harlem Globe Trotters play the Washington Generals, without the humor. The have a legitimate competition there must be a broader field and some unpredictability. Teams further down the grid must have at least some outside chance of winning a race. This does not exist in F1 today.

2). The point is that I do not want to see a field full of "also-rans." I want to see more teams that have a real chance to reach the podium or even win at any given race. There will always be stronger teams and weaker teams, but two teams that win everything, makes everyone else "also-rans."

3). I am not suggesting "rewarding failure" or "propping them up." This suggests that they receive rewards that they do not deserve. I would strongly disapprove of a simple redistribution of money from wealthy teams to poor teams, as this certainly would be "rewarding failure." The changes I suggest is to adjust the economic incentives so that the teams at the rear of the field EARN a reward that is proportional to the risk that they take.

4) Bernie makes a ton of money putting on his circus, and these teams are his performers. Whithout them there isn't much of a show. Bernie needs to improve the product. Additionally. Marussia , Caterham and Sauber have fans too. Consider the financial cost to FOM of reducing the coverage of Mercedes, Red Bull and Ferrari by 120 seconds, and increasing the coverage of Marussia, Caterham and Sauber by 120 seconds. The risk for FOM is low for few Mercedes fans would notice that their favored cars are on the screen for 1 min less. At the same time FOM would be supporting a broader fan base as the Caterham fans would certainly notice that their favored car is on screen for 60 seconds as opposed to less than 20 seconds. The additional exposure will enable these teams to offer a return on investment to sponsors, which will help to improve their ability to compete.

5). I would not expect any of this to turn F1 around in a single season. I do think positive effects would be seen immediately, but a healthy, financially stable competition will take many seasons to develop and balance.