FIA - Budget Caps from 2009.

[axle]

http://www.f1technical.net/news/8035

TBH I think this is a good thing as long as they de restrict the technology a bit too...

[mx_tifoso]

A budget limit can definately be a good thing for F1. But once the FIA gives an approximate budget cap, then we will see how the individual teams handle and assess it themselves.

Though I would say that anything under $250M would not be accepted by the majority, or at least the top teams. This would be because seven out of the eleven teams spend more than $250 a year*.

Toyota $418.5 M
Ferrari $406.5M
McLaren $402 M
Honda $380.5 M
BMW Sauber $355 M
Renault $324 M
Red Bull $252 m,
Williams $195.5 M
Midland F1/Spyker-MF1 $120 M
Toro Rosso $75 M
Super Aguri $57 M
Est. 2006 Total Spending= $2.9 B


*2006 Spending estimations by F1 Racing.

Wikipedia: Cost of Formula One

This is what I am able to add for the time being, but it is very clear to me that there many others here on this forum with a larger perspective on what goes on within this sport, and therefore would be able to contribute more.

[axle]

A budget limit can definately be a good thing for F1. But once the FIA gives an approximate budget cap, then we will see how the individual teams handle and assess it themselves.

Though I would say that anything under $250M would not be accepted by the majority, or at least the top teams. This would be because seven out of the eleven teams spend more than $250 a year*.

Toyota $418.5 M
Ferrari $406.5M
McLaren $402 M
Honda $380.5 M
BMW Sauber $355 M
Renault $324 M
Red Bull $252 m,
Williams $195.5 M
Midland F1/Spyker-MF1 $120 M
Toro Rosso $75 M
Super Aguri $57 M
Est. 2006 Total Spending= $2.9 B


*2006 Spending estimations by F1 Racing.

Wikipedia: Cost of Formula One

This is what I am able to add for the time being, but it is very clear to me that there many others here on this forum with a larger perspective on what goes on within this sport, and therefore would be able to contribute more.

Good info, even if Wiki is involved :p

I think $200-250m is suitable it just stops those with silly budgets wasting them...

[Principessa]

And don't forget that Mallya will add a lot of millions to the budget of Force India so the number will be even higher.

[Ogami musashi]

The projected cap is 120M$.

But beware that the number you've posted may include marketing, drivers wages and engine costs.

Now the budget cap will not include engine developpement and marketing/wages.


All in one i think this is far more sound than the ban and standardisation planned.

F1 is losing the technology edge, maybe with this plan we will see again cutting edge technologies coming.

Other than that, related to the topic, the 2009 bodywork regulations are still under debate and according to Mosley won't be decided before a march WMSC meeting...

[mx_tifoso]

The projected cap is 120M$.

But beware that the number you've posted may include marketing, drivers wages and engine costs.

Now the budget cap will not include engine developpement and marketing/wages.
...

If thats the case, does the current budget for each team include engine development, marketing, and personell wages?

A budget cap that excludes the expenses for those three departments may very well be ok and within a reasonable amount for the top teams to drop down to. Because as we all know, its not completely about how much you have at your disposal, but about how you "use" it.

Another question, does the expense of a windtunnel by a F1 team go into their annual budget? I'll post an explanation for this question later.

[modbaraban]

I don't think this gonna work.

Cos this:

Toyota $418.5 M
Ferrari $406.5M
McLaren $402 M
Honda $380.5 M
BMW Sauber $355 M
Renault $324 M
Red Bull $252 m,
Williams $195.5 M
Midland F1/Spyker-MF1 $120 M
Toro Rosso $75 M
Super Aguri $57 M

may become this:

Panasonic Toyota Racnig $200M
(+ Toyota $118.5 M, Toyota motorsports GmBH, $100M)
Scuderia Ferrari $200 M
(+ Fiat $206.5M)
Red Bull Racing $152 m,
(+ Red Bull Technologies $100 M)
Vodafone McLaren Mercedes $200 M
(+ Daimler $102 M, MSVIT (McLaren So Very Independant Technologies) $100 M) etc etc etc

EDIT: sounds like a perfect situation to win championship in the court

[mx_tifoso]

Modbaraban, I was thinking very much on similar lines as your above post.

Because as we all know, Ferrari has always had FIAT, especially back in the early 2000's*. So even if the F1 team budget is capped at around half the current average, many teams with parent or sister companies will always have some sort of help that enables them to use an even great amount than what is "allowed".

Another thought, teams like SA have such a low estimated annual budget because they already have a complete car (including engine) directly from Honda F1. Otherwise, if they had to design and creat a complete racing car on their own, their budget would most definately sky rocket. So all their "bragging" about racing in F1 with such a low budget compared to other teams isn't as surprising as it appears to be.

*This team is just an example from many to choose from.

[effuno]

expenditure excludes engine, drivers and promotion.. that in itself can contribute atleast 100millions, once the greener engines research comes into play (or once the freeze on enginer development runs out, whichever is earlier). and ofcourse, drivers are gonna demand more cause they know teams got the capacity to spent more, now that they are limited to spent in aero, suspension etc.. this is pathetic from FIA.

I do not understand why they cry over limiting the budget of each team..everyteam spents because they have the capacity to spent.. and if they think budget cap will bring the levels of teams closer, they cant more mistaken; it will only increase the driver salaries and in turn, teams and sponsors demanding more promotional wor from drivers...! except for williams, there is no team that has any problems with their budget right now(torro ross and super aguri ?? no.. not with their sister teams providing them with cars..). And for williams, if they start producing better cars, sponsors are gonna pour in on them with some exciting young talents in their ranks and they would have money to spent as well..!!

My opinion is that this is terrible and that F1 is the pinnale of motorsport TECHNOLOGY and should always be, irrespective of what they contribute to road cars! (its a sport, just like football, cricket blah blah.and anything that comes into roadcars should be a bonus ..)

[Ogami musashi]

I think there's a little misconception here about the purpose of the caps.

The caps are not done to level the field, they're done to allow small teams to enter F1 without dying 1 season later.


which bring me to the point why cost should be controlled?

"If one team spend as much it is because she can".

Yes, but if that team spend as much, she will raise the level of competitiveness via this increased funding, then the other teams will have to follow the trend.

This effect has absolutely no garantee to be sustainable and even seeing how many teams pull out of F1 for the last 10 years you can see it is not.



By the way, the engine development cost will also be capped. It will simply be capped outside the main one.

Only wages and marketing won't be capped.

In addition it is planned to have a registered account at a cost policy office for each team which will take into account the incomes from sister teams/3rd parties manufacturers.

But yes some teams will still be helped , as said above, the plan is not to level the field.


By the way, the recent news about the superlicense going from 1200 euros+447euros per points earned previous season to 10000+ 2000 euros per point earned the previous season is a radical measure to level the field!

[dumrick]

By the way, the recent news about the superlicense going from 1200 euros to 10000+ 447 euros per point earned the previous season is a radical measure to level the field!

...and to limit team's costs... they are very worried about limiting the amount of money spent outside of FIA fees - maybe to raise those?

[Rob W]

This whole budget cap talk is really just to invite ideas from the teams. Categorically, they will not be able to limit a team's technical spending. There is no way they could ever police it. No teams current full operating budget is actually known by any outsiders - they're all estimates.

Factors such as where you run a team from would make too much difference. In Germany, for example, it might cost a couple of percent more for the equivalent staff member of in the UK or Japan - this would add, overall, a couple of million dollars to a team's budget which they couldn't use elsewhere. The most sense then would be to move teams HQs to Malaysia or Thailand - the savings would far outweigh the extra travel needed.

Also, as has been mentioned before, how do you stop Toyota or Ferrari doing quasi-F1 testing/development and then claiming it was for road car purposes? You can't. Likewise, Ferrari could claim their development is actually 'marketing' because Ferrari use their F1 team as their companies marketing vehicle (They don't do any advertising directly, they use the money they would otherwise towards the team)

Max is waving his stick like an idiot as usual. The only real outcome of this is to hope that some practical and measurable ideas will be submitted by teams.

R

[Rob W]

Now the budget cap will not include engine developement...

I found this particularly funny.. Isn't there a ban on engine development? How can they then turn around and say, "the budget cap doesn't include the engine - which you can't develop anyway.."

R

[checkered]

Rob W, I'm not

in the habit of posting messages of mere agreement, but as I've lacked energy to discuss the budget capping initiatives, I have to say you raised a number of vital points in the above posts. Some were nothing short of revelations, so thank you very much for that. The most solid possible counterarguments I've seen were by grandprix.com in some recent features - they suggested reasons why the caps would encourage very effective self-regulation of costs between the teams coupled with exhaustive accounting. My memory fails me at the moment as far as how the underlying reasoning went, but perhaps if you care to investigate those pieces, in time you might arrive at even more fruitful conclusions for the enlightenment of us all. And yes, I too revelled in the absurdity of spending freely on engines that can't be developed ...

[Rob W]

...they suggested reasons why the caps would encourage very effective self-regulation of costs between the teams coupled with exhaustive accounting.

I agree there are ways to attempt to make it open and fair.. but there will aways be things which can be fudged.

For example - a raw piece of carbon - one team pays, for example, $100. Another team comes along and uses the equivalent piece of carbon from their supplier and it goes in their books as costing $75. A team could achieve this 'saving' in a number of ways which circumvent the budget accounting practices.. Perhaps they offer the supplier a sponsorship logo in return for cheaper product? It then falls into marketing budget territory and is not part of the equation... Or they might go to a supplier and say: "sell it to use for $50 and we'll fly you and your wife business class to every race this year.." again, falls under marketing budget and is exempt from the budget cap.

Then take Ferrari, who manufacture certain parts for their F1 cars in their production car factory. They say "it cost us $25" - but we know that, since they own the factory, they might have retasked a machine at a loss to the road-car division in order to make the product transfer cheaper to the F1 team.

Research and testing could be fudged easily also. Imagine Williams (team 'A') decides to develop a new brake technology. They start with basic ideas (at a cost), they make some test versions (at a cost), produce some proper versions (at a cost), race with them a bit, modify the design (further cost) and modify it further for certain tracks (further cost). Toyota (Team 'B') comes along and thinks: 'That idea has merit - Lets investigate it for road cars'. They get their parent company to start research on a version for road cars (no cost to the team), investigate materials, and iron out broad reliability and manufacturing issues (no cost to the team). Finally when they're a long way down the development path the F1 team starts to produce their own version - but since they have far less lessons to learn by virtue of the car company - can come up with a comparable part for far less money than the other team.

There are so many ways to fudge this proposal and the huge disadvantage teams like Force India etc will be at compared to a major manufacturer such as Toyota will just increase the gap (well, maybe not to Toyota )

R