Budget caps
 

This is getting silly now. If you can guarentee a rule that will will be abused by one and all, this is it.

http://www.autosport.com/news/report.php/id/73455

Could never work as intended. Every constructor has different cost-structures & of course efficiencies differ as a result. For instance, it's not as easy as 'cap it at USD 150 million each' but ultimately every constructor will try to optimise that sum & even restructure to do so. Yet even then one can argue that (say) Renault or Williams may manage limited resources more efficiently than the bigger or smaller teams.

I say that regulations should be organised in such a way that cost structures are truly reflected in smaller budgets.

This sounds like one of those debating society topics: "The idea that each team should have the same amount of money, so that success is simply a function of intellectual ability, has great appeal." Perhaps of more interest is that Max would "like to discuss this further with FOTA". I think that's significant in terms of FOTA's press conference taking place in a few days time.

There will be many, many ways around this. For example any manufacturer team could for example just be claiming to be buying cheap off the shelf components from their road car division. The fact that these components cost millions to develop won't appear on the balance sheets!

So obvious isn't it.

Or having componants being tested in other vehicles.

It was bad enough in the days of non-professional Rugby making sure players didn't receive wages. It was a case of a Kiwi or Aussie player being taken on as a "consultant" or whatever as some exorborant rate with Company car and benefits while only expecting to turn up for a board meeting once a Month.

And that was easy to police!!

May well be impossible to enforce, but it could work.

If all the teams agree to the cap in the first place, and the punishment for breaking this rule is incredibly harsh, I don't think the teams would gamble on breaking it as long as the FIA can actively be seen to be monitoring it.

What I find funny, is how people who believe that the teams should own F1 rather than CVC and Bernie, yet don't trust them to stick to an agreed budget cap.

I wouldn't trust them to tie their shoe laces http://www.motorsportforums.com/imag...es/biggrin.gif

You have to remember PP that a budget cap is very easy to stick to. Profit and loss on a spread sheet.

However, development that goes into outside development is impossible to gauge. For example, if Mercedes sell their engines to McLaren for £10k a pop, what's wrong with that?

I would say the potential to bend the rules makes the intention a mockery.

Definately, I'm not doubting its impossibility of enforcing it.

But I think if they are actively seen to be chasing down any expenditure F1 related within their different companies, and with the prospect of a huge fine, I do think it has potential to work.

So what happens in the case of SpA Ferrari? They do not make a distinction between the books of the F1 team and the road going division, with good reason - there aren't any. People employed by Ferrari are employed by... Ferrari.

They are NOT a manufacturer but a race team that happens to sell motor cars. I would wager that it would impossible to separate costs out of the group. How do you pro rata electricity, wages, and council rates?
Accounting is to a degree a legal fiction and if the FIA sets a cap, then you'll merely see several set of accounts that all arrive at the same outcome.

"The idea that each team should have the same amount of money, so that success is simply a function of intellectual ability, has great appeal," said Mosley. "If properly enforced, it would be a very fair system. Indeed one view is that having much more money than a rival team is just as unfair as having a bigger engine."
- Max Mosley

How does this fit in with the fact that TV revenues have been apportioned out on a less than equal basis for 25+ years? Doesn't this mean that the FIA actually brought this about in the first place?
I refer again to the famous racial discrimination case of Pot vs Kettle, which as a result people are allowed to make utterly ironic and hypocritical statements without fear of a tarnished reputation.

This is what happens when you deal with unbelieveable big amounts of money. Huuuuge piles of cash which make them fail think clearly about the sport..

Sorry, I was daydreaming...

I'd be highly suprised if the whole of Ferrari finances come under one name.

Its more than likely that Ferrari will be split up into many different subsidary companies, as per the norm in all normal companies.

Again I stress it is near impossible to enforce, but as I say, I do believe it could work with incredibly harsh fines for being caught and visible sign of FIA searching through accounts.

And the team obviously agreeing to it in the first place.

A new rule everybody will break (if they can get the money of course). If technical rules can be so ambigous sometimes why do they have to get into accounting?

it would be great if they made them share their suppliers. So McLaren's I don't know what costs 10 bucks. let them all have it at 10 bucks then http://www.motorsportforums.com/imag...s/laughing.gif

Budget caps in F1 is a really bright idea. Because it can be policed 100% and surely there is no way around it. Yep. Brilliant idea Maxie.

Methinks this might be that sarcasm thingy I've heard so much about http://www.motorsportforums.com/imag...s/laughing.gif

The reason why I suspect that it isn't is two fold:
1. Being an SpA, Ferrari is roughly the equivalent to a private Limited company in the UK. Being one of these there probably aren't a lot of shares actually in the company. It would make sense for a small number of people to control it.
2.The factory itself is not terribly big. In fact in all honesty I think that the Yorkshire Tea Factory in Harrogate is bigger... and the fact that on the tour of the place they're at pains to tell you that it's one organisation.

Of course it could have changed since 2003 when I went on the tour and this is Wild Mass Guessing, but it's educated Wild Mass Guessing.

Budget caps do not provide the right solution. Imagine if that was the case for football (soccer) & how that would impact on everything. Likewise, Ferrari (for example) owns six tracks & does not pay the royalties required to test on a particular track (although they do have to maintain it themselves) & even make some profit out of it. For example, when Italian F3000 or British F3 races or others are held they do get some decent revenue. Does that go into the budget as well? I like the idea that every squad should have its 'home track' (even if it's just for testing) that must host an F3, GP2 or F3000 or some other series if they want to make extra money.

I say find ways to make F1 cost-effective. Start by insisting that each chassis should last x2 seasons!

I'm in two minds over this. While in practice it is virtually unpoliceable, in theory, if we accept that the whole cost-cutting thing isn't going to go away any time soon (at least until the economy picks up), then a budget cap is by far and away the lesser of two evils compared to the dreaded alternative (standard parts). Don't see how it can be enforced though...

This is madness yet again.

You will end up with a 2 tier formula because Ferrari, McLaren etc wouldn't be able to work this.

For example, Ferrari wouldn't be able to use their test track unless they split from the group and hired them back. Then, you would have to say they need to hire them at an exclusive rate and not on a shared basis as the other teams do. Otherwise they will have to declare that the track is part of their 30m budget and all costs associated.

What about if teams sell componants to other teams? If McLaren Merc sell engines, can they gather the development cost back?

Then you will have the prospect of an uncapped team being blitzed on the straight by capped teams with unrestricted engines http://www.motorsportforums.com/imag.../roll_eyes.gif

Elvis has finally left the building.

This is crazy.