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FIA have become involved in cost-cutting regulations


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#1 ali.unal

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Posted 24 May 2012 - 20:49

Today in press conference at Monaco GP, Ross Brawn has actually announced in response to a question that "FIA have now, at the request of the teams, have become involved and there’s a meeting next week which I think will be a very important meeting to set the objectives and agree the methodologies and philosophies that we want to control costs in the future."

We know that teams have been operating for some time within a certain agreement called Resource Restriction Agreement, which was signed after Max Mosley's dead-born budget cap proposal, in order to cut costs and resources. There was a motive that budgets would have been cut back to 90's levels, which I am not sure is still in place.

Although Ferrari and Red Bull left FOTA, they reiterated number of times that they are fully behind cost-cutting measures. On March, Red Bull has spoken out that "they are refusing to sign off on the latest range of cost-control suggestions in Formula One, believing there are flaws behind the ideas." We know Ferrari also are not happy in the way cost-cutting is policed.

Hence the FIA "intervention." Although Ross underlines that it was "at the request of the teams", I find it very difficult to imagine a way the FIA could dictate how and how much money teams can spend in a fiscal year without imposing a budget cap (which certain teams oppose by nature). Teams are also reluctant to hire private companies to audit their records, so they must find another way.

Interesting times ahead. New Concorde Agreement, new engines, new cost-cutting measures. There has been some talks that FIA could be removed from the equation as a whole and Formula 1 (a.k.a. GP1) Rule Book could be written by a certain thong-wearer race-fixer Italineer. Let's see.

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#2 F1ultimate

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Posted 25 May 2012 - 09:11

FIA would naturally need to be involved in cost-cutting regulation talks as it's effectively a rule governing the sport and there is a need for a body to enforce the rule and make sure that all parties are compliant. After all F1 teams are not dumb and will exploit loopholes where ever there are any.

#3 MrMontecarlo

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Posted 25 May 2012 - 09:28

Again with this cost cutting crap. Formula 1 is not about being cheap, it's about development. Nowadays they can't develop the engines, what sort of racing is this in which you can't improve your engine? I prefer to have less teams in Formula 1, but strong and able to use their resources.

#4 pdac

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Posted 25 May 2012 - 18:31

Again with this cost cutting crap. Formula 1 is not about being cheap, it's about development. Nowadays they can't develop the engines, what sort of racing is this in which you can't improve your engine? I prefer to have less teams in Formula 1, but strong and able to use their resources.


My feeling is that even the top teams fear this. I think there is concern that, because of the competitive nature of the sport, without agreements, the cost will just spiral to the point where there will be very few teams left. No one who is currently a the sharp end wants to move to a situtation where they are spending up to their absolute maximum and are still coming last every race. That's why they were happy to all sign up to their own RRA.

#5 MrMontecarlo

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Posted 25 May 2012 - 18:35

My feeling is that even the top teams fear this. I think there is concern that, because of the competitive nature of the sport, without agreements, the cost will just spiral to the point where there will be very few teams left. No one who is currently a the sharp end wants to move to a situtation where they are spending up to their absolute maximum and are still coming last every race. That's why they were happy to all sign up to their own RRA.


Ferrari can't be happy with the RRA.

#6 Victor

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Posted 25 May 2012 - 18:42

Again with this cost cutting crap. Formula 1 is not about being cheap, it's about development. Nowadays they can't develop the engines, what sort of racing is this in which you can't improve your engine? I prefer to have less teams in Formula 1, but strong and able to use their resources.


I could not agree more. If you look back in history there are plenty of great racing years with less teams and cars. I would rather have 3 cars per team with fewer but stronger teams, willing to spend some money and to develop cars and engines. F1 is supposed to be the pinnacle of motorsport not the pineapple of motorsport.

#7 Timstr11

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Posted 26 May 2012 - 10:39

Parallel to this, Flavio Briatore seems to have been asked (by Ecclestone?) to draft new F1 regulations which will dramatically cut cost.
Apart from the fact that a convicted race-fixing crook has been drafted in to draft new regulations, I don't understand what's going on.
Is Bernie trying to oust the FIA as rules governing body? I hope to see a Dieter Rencken article to shed some light on this matter soon.

#8 ali.unal

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Posted 14 June 2012 - 19:34

There is a lot going on behind the scenes regarding to 2014 engines and I think cost-cutting negotiations and that will go hand in hand. Apparantly Bernie Ecclestone wants the new 2014-formula engines to be postponed for they will be very very expensive with respect to the cost of current packages. It's proposed that new engines will cost as much as £25m per team, which will be immensely expensive compared to current £7m. New teams are reluctant to pay that amount and engine manufacturers say that is only logical for new engines to cost that much in the beginnig reckoning it will drop in 5-year period. Mercedes, Renault and Ferrari all oppose to postponing new engines as they have already made huge investment, but Bernie doesn't want new teams to drop due to increased engine costs. This will be a talking matter in Friday's WMSC meeting.

Here are the details (PLUS members):

http://plus.autospor...e-be-with-them/

#9 King Six

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Posted 14 June 2012 - 19:47

I've completely lost interest in this sport now, what with the stifling rules that ban everything, the refusal to adopt new engines...it's just GP1 series now. About the drivers and how they manage the tyres. Especially in comparison to the ACO's LMP1 regulations for 2014.

F1 is just on life support right now, constantly tightening the rules and budgets to push the sport further and further into irrelevancy just so the small teams can stay alive without having to actually do anything except build a car that the rulebook/instructions tell you to. I'm almost done with this, I didn't even finish watching the Canadian GP, seeing Perez one stop it again and again and again...

The fact is if F1 can't support big teams and constantly needs to cut costs in order to keep the smaller teams, then F1 is already lost. Teams/companies should be striving to stay in F1, not the other way round.

Edited by King Six, 14 June 2012 - 19:49.


#10 Sakae

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Posted 14 June 2012 - 20:31

Again with this cost cutting crap. Formula 1 is not about being cheap, it's about development. Nowadays they can't develop the engines, what sort of racing is this in which you can't improve your engine? I prefer to have less teams in Formula 1, but strong and able to use their resources.

You have my attention.

#11 Atreiu

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Posted 14 June 2012 - 22:04

I'll say it again, customer cars.
If F1 wants to develop and implement green and cutting edge engines which will link the sport to high end performance, eco-responsability and the next century or whatever, than screw the chassis which have become bottomless pits of money sucking aero and mechanical development for the most negligible gains.

Does F1 want to promote winglets, holes/gaps, DRS, EDBs and wind tunnel constructors or engines and manufacturers?


Edited by Atreiu, 14 June 2012 - 22:05.


#12 WhiteBlue

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Posted 15 June 2012 - 00:46

All sensible parties in F1 agree that there must be continued cost control for chassis and power plants. The RRA and the engine freeze effectively saved 30% of team budgets from 2010. The teams need this to continue because with the Euro crisis there will be no public tax subsidies for Europeans in the future. At the same time private manufacturer investment in R&D will increasingly go to fuel efficiency technologies.

F1 has tried to make the new engines more restrictive in terms of specification than they ideally have to be without budget control, but this move is doomed. Narrowing specs has never stopped a development arms race. The engine manufacturers will try to outspend each other unless they decide to apply cost capping of some sort or another on power plants.

The same is true of the chassis situation. The teams need to find agreement with the FiA on future cost control. Jean Todt has no intention to impose something on F1 that isn't approved by the F1 commission. I'm having the impression that a voluntary budget cap combined with the current resource restrictions will be agreed. At least I see that as the logical thing that they need to do. The teams have no more big increase of funds coming with the commercial conditions fixed for 2020 as they are now. They have to protect their existence with the money they have now. So it is likely that they will get serious about the cost control and the FiA will encourage them by offering to police the agreed caps.

With some kind of cost control in place there can be more room for technical innovation as we see in LMP.

#13 ali.unal

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Posted 18 September 2012 - 09:56

I guess Mosley must be giggling somewhere, saying "I said so":

Formula 1 teams open to reviving budget cap plan

#14 Sakae

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Posted 18 September 2012 - 10:22

FiA as a monetary regulator is bad idea, because they are simply not qualified to run it.

1. Let global economics, and individual team's financial steering body to determine team's budget. They are qualified, and on frontline what can be afforded.

2. FiA, stop jerking teams around by constantly changing regulations and all that expensive nonsence (KERS, no KERS, DRS, no DRS, and so on), which contributes nothing to racing quality, and focus on writing sensible specifications that will indirectly determine cost of running business.

3. Mr. Ecclestone, lower your fees, please.

Edited by Sakae, 18 September 2012 - 11:59.


#15 pizzalover

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Posted 18 September 2012 - 11:32

Does anyone here know how teams allocate their budgets?

Research and production of aerodynamics must be large part. The FIA should bring in a regulation that simplifies aerodynamics and therefore cut costs.

For example, a rule whereby the body of the car could theoretically be produced from a two part mould (air intakes and driver cockpit excepted). This could easily be verified by subjecting car plans to computer modelling.

The advantage that larger teams have in wind tunnel and CFD would be negated.

#16 Sakae

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Posted 18 September 2012 - 13:03

Manufacturers should move away from F1. Simple as that. Enough is enough.

This tendency that smaller teams must be accomodated is far too expensive for the teams that already invested into their resources and technology only to find a year later that millions of Euros are again wasted due to new cuts and regulations? I think that production people who do know quite accurately cost of this all must be absolutley furious to see all that money being poured into the drain. Cost of racing is probably not as large problem, but mismanagement of regulations might be more expensive between those two.

#17 Slowinfastout

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Posted 18 September 2012 - 13:25

You have to read between the lines here...

What's happening is that the Concorde agreement isn't finalized yet, and it almost looks like everyone was moving forward while the FIA was left behind.

Remember Ecclestone saying all the teams were signed up? the teams should write the regulations?

Bernie might as well kick Jean Todt in the nuts, it would be a more friendly gesture than that claim.

The FIA responded by sitting tight and letting time lapse, and now we're at a point where it's starting to get quite a bit late to: A) not have a calendar. B) not have finalized 2013 regulations.

The teams will soon reach a point where they will have to submit themselves to whatever the FIA wants to do (FIA-controlled budget cap, for instance), or basically going to war again and risk having stuff they like even less being imposed to them.