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F1 Budget Cap?


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#51 stevewf1

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Posted 28 December 2007 - 19:37

What's interesting to me is that it's Honda who want this... Granted, Honda is not as big of a spender as other teams, but I believe that where Honda goes, other manufacturers will follow - except maybe Ferrari - Fiat may have something to say...

Whatever happens, sooner or later, the "market" will decide. The Big Spenders (companies competing in the real world marketplace) in F1 today will realize that $500 million a year in F1 just isn't worth it anymore...

And then they all leave... Which won't necessarily be a bad thing. :)

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#52 Slowinfastout

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Posted 28 December 2007 - 20:11

I think some people are confusing a salary cap and a 'budget' cap...

A salary cap is easy to enforce, but it contributes nothing to F1. Well, almost..

A budget cap is impossible to enforce and is a ridiculous idea, IMO.

It's all a matter of accepting F1 as technological challenge or not.

Lets face it, from a budget standpoint the whole idea is obviously starting to make less and less sense. Apart from paint and decals the cars all look the same to the average joe, and they probably do for the CEO at Honda as well. They all more or less sound the same, etc..

Spending that much money for the purity of the sport is just bad business.. I certainly understand the nostalgic people but this year it also became obvious that nobody is going to innovate, go radical, and buld a H-16 or something.. you just do what the best team does, try to make it a little better, and that should be good enough...
The information flows freely. Who cares if someone has a fresh new clever idea at the wind tunnel? Its just going to add a winglet on a car thats already full of winglets which itself is in a field full of cars full of slightly different winglets.

Spending that much money for that is becoming pointless to all but the hardcore fans or the F1 engineers.. hence that crazy budget cap idea.. its an alarm signal, not a legitimate request..

#53 stevewf1

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Posted 28 December 2007 - 20:46

Originally posted by Slowinfastout
I think some people are confusing a salary cap and a 'budget' cap...

A salary cap is easy to enforce, but it contributes nothing to F1. Well, almost..

A budget cap is impossible to enforce and is a ridiculous idea, IMO.

It's all a matter of accepting F1 as technological challenge or not.

Lets face it, from a budget standpoint the whole idea is obviously starting to make less and less sense. Apart from paint and decals the cars all look the same to the average joe, and they probably do for the CEO at Honda as well. They all more or less sound the same, etc..

Spending that much money for the purity of the sport is just bad business.. I certainly understand the nostalgic people but this year it also became obvious that nobody is going to innovate, go radical, and buld a H-16 or something.. you just do what the best team does, try to make it a little better, and that should be good enough...
The information flows freely. Who cares if someone has a fresh new clever idea at the wind tunnel? Its just going to add a winglet on a car thats already full of winglets which itself is in a field full of cars full of slightly different winglets.

Spending that much money for that is becoming pointless to all but the hardcore fans or the F1 engineers.. hence that crazy budget cap idea.. its an alarm signal, not a legitimate request..


Good points, but... I think a "budget cap" would be fairly easy to enforce. All the FIA has to do is say "Every team has (pick a number) this much money they can spend during the season operating their F1 team...

That includes everything involved running the team and a "salary cap" would naturally follow.

So, F1 teams would have to trim their "teams" of engineers and aerodynamicists and hire a few (gasp) accountants to report expenditures to the FIA.

If a team is allowed say, $100 million a year, they would have to budget their money for the whole season. They could spend the allowance as they see fit.

I think it does make sense and it's worth trying...

Unless everyone wants 6-car grids "filled" with super high-tech F1 cars from teams spending $600 million a year and whose "development" is already mostly controlled by the FIA anyway...

#54 Slowinfastout

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Posted 28 December 2007 - 21:11

Originally posted by stevewf1


Good points, but... I think a "budget cap" would be fairly easy to enforce. All the FIA has to do is say "Every team has (pick a number) this much money they can spend during the season operating their F1 team...

That includes everything involved running the team and a "salary cap" would naturally follow.

So, F1 teams would have to trim their "teams" of engineers and aerodynamicists and hire a few (gasp) accountants to report expenditures to the FIA.

If a team is allowed say, $100 million a year, they would have to budget their money for the whole season. They could spend the allowance as they see fit.

I think it does make sense and it's worth trying...

Unless everyone wants 6-car grids "filled" with super high-tech F1 cars from teams spending $600 million a year and whose "development" is already mostly controlled by the FIA anyway...


I honestly believe you underestimate the implications of such a thing...

But if you want to enforce something like the whole operation of an F1 team, you first have to thouroughly define it. An impossible task. Unless you take one team and use it as a template.

Do you seriously expect somebody to be assigned the task of monitoring whos paying whos plane tickets and stuff like that? I'm fairly sure this is a can of worms nobody wants to open. It would create a whole new set of problems and most likely would never offer the certainty that the original mess has been taken cared of...

Its nonsense mate, trust me.

#55 stevewf1

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Posted 28 December 2007 - 21:38

Originally posted by Slowinfastout


I honestly believe you underestimate the implications of such a thing...

But if you want to enforce something like the whole operation of an F1 team, you first have to thouroughly define it. An impossible task. Unless you take one team and use it as a template.

Do you seriously expect somebody to be assigned the task of monitoring whos paying whos plane tickets and stuff like that? I'm fairly sure this is a can of worms nobody wants to open. It would create a whole new set of problems and most likely would never offer the certainty that the original mess has been taken cared of...

Its nonsense mate, trust me.


:)

Yeah, I know. But what the heck...

I really don't think F1 is going to go the way the Can-AM did back in the '70s, but I do believe that something's bound to happen.

After all, the FIA seems to want to "control" just about everything else in F1 - from a "tech" sense anyway.

We'll see. I do believe that the "economic market" will eventually decide this anyway - which is the best thing.

#56 scheivlak

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Posted 28 December 2007 - 21:57

Originally posted by stevewf1


If a team is allowed say, $100 million a year,

Which can be e.g. 85 million euros at the start of a season and 65 million euros at the end - to name just one single problem.... Teams, drivers, manufacturers of e.g. brakes, other parts, hard- and software etc etc can be paid in dollars, euros, yens, pounds - strong and weak currencies. Who's gonna check, monitor and arbitrate all that during the season? Or should there be a binding agreements that every single payment should be in, say, euros or, say, dollars? Rather difficult to implement in such an -economically- worldwide environment.

Not to mention the problem of registering what is given (data, materials etc) for free....

#57 stevewf1

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Posted 28 December 2007 - 22:26

Originally posted by scheivlak

Which can be e.g. 85 million euros at the start of a season and 65 million euros at the end - to name just one single problem.... Teams, drivers, manufacturers of e.g. brakes, other parts, hard- and software etc etc can be paid in dollars, euros, yens, pounds - strong and weak currencies. Who's gonna check, monitor and arbitrate all that during the season? Or should there be a binding agreements that every single payment should be in, say, euros or, say, dollars? Rather difficult to implement in such an -economically- worldwide environment.

Not to mention the problem of registering what is given (data, materials etc) for free....


Well, it's just a thought...

So let Toyota increase their annual F1 spending to $1 billion (and they can if they want to)... Let them win the World Championship (someday I think they will)...

And then what?

Who'll be left?

#58 Slowinfastout

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Posted 28 December 2007 - 22:47

Originally posted by stevewf1


Well, it's just a thought...

So let Toyota increase their annual F1 spending to $1 billion (and they can if they want to)... Let them win the World Championship (someday I think they will)...

And then what?

Who'll be left?


One thing thats obvious to me is that the idea of severely limiting actual on-track testing, I'm talking race weekends here, tends to favor all this off-track grotesque usage of wind tunnels and all the rest of the virtual stuff. And the craziest idea would be to sell that as eco-friendly too, hehe..

I guess I'm getting away from the topic a bit but wouldnt letting much more F1 tracktime on fridays help the low-budget teams a bit? The cars are there on location, just ditch the refueling and the tire changes in the other sessions, and for the race, and burn fuel and rubber there, in friday testing, for crying out loud..

No need to go crazy and invest billions in aero testing if you could properly sort the good-looking, if un-wind-tunneled hardware you got on hand for a fraction of the price of the rich bastard next to you..

Am I completely off-base with this?

#59 Dudley

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Posted 28 December 2007 - 23:41

Originally posted by Slowinfastout
I think some people are confusing a salary cap and a 'budget' cap...

A salary cap is easy to enforce


Nope, not in F1 where the teams have sponsers. See the Lewis Hamilton example above.

Good points, but... I think a "budget cap" would be fairly easy to enforce. All the FIA has to do is say "Every team has (pick a number) this much money they can spend during the season operating their F1 team...


And how do you track it? Do you know exactly what's going on in Honda Motor Car HQ.

What if Honda do research on semi-auto boxes for cars? How do you know none of this is heading to F1?

What if Hamilton does a Vodafone ad? Is his fee part of the McLaren budget? If not, isn't this an incredibly huge loophole?

What about Ferrari's fuel supply from Shell? They get it free or even get paid to use it. But the supply is clearly worth "Something" but what?

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#60 scheivlak

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Posted 29 December 2007 - 00:01

Originally posted by stevewf1


Well, it's just a thought...

So let Toyota increase their annual F1 spending to $1 billion (and they can if they want to)... Let them win the World Championship (someday I think they will)...

Please tell us why, how and where they can spend, say, 600 million more.
Revs are limited, test kms as well, tyres are standardized, there are all kinds of aero limitations proposed.... See some other threads.

I think the only sensible way for Toyota to spend more money than they are now is either on drivers - but the real top guys won't go to Toyota because it'll only drag them down - or top technical guys, but they seem to have their reservations as well.

Money is essential, but it still doesn't guarantee you anything.

#61 Dmitriy_Guller

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Posted 29 December 2007 - 00:40

Originally posted by Dudley


I don't think THAT many people have a massive problem with the concept, they're just inteligent to know that with big companies involved it's just not workable.

Look at all the people referring to free markets (completely oblivious to the fact that free market concepts work very poorly in tournament-like situations that are the nature of all sports). Other people are predicting doom when teams will only be able to spend 100 million per season rather than 200.

Throughout the history of motor sports, big money in the long term proved to be deadly. It's a lot easier to get hooked on a lot of cash than to get weaned from it when it's gone.

#62 metz

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Posted 29 December 2007 - 01:46

Originally posted by Motormedia
Another way of dealing with the problem is to lessen the incentive to spend. It could be done by inversing the television money.

I'd settle for "even" money for participation, as it is in most other sports.
As long as the top teams get 6 times the TV revenue of the bottom teams we will continue to have an unfair competition. (protecting the status quo)

Getting back to budget caps.
We all agree that it might be a good idea.
And we all agree that it is totaly unworkable.
If it's unworkable, it will never happen. So why discuss?
We could discuss the UK driving on the right, or the US going metric.
Two other norms that will never change.

#63 imaginesix

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Posted 29 December 2007 - 04:55

Originally posted by Motormedia
Another way of dealing with the problem is to lessen the incentive to spend. It could be done by inversing the television money. The lesser teams get more.

Wow, a reward for losing. :lol: Think about it.

#64 Motormedia

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Posted 29 December 2007 - 09:30

Originally posted by imaginesix
Wow, a reward for losing. :lol: Think about it.


Yeah, I can think about it and if you did too you'd realise it's the same concept as in NHL and other team sports in the US where the lesser teams get to draft first...

Motormedia

#65 angst

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Posted 29 December 2007 - 09:58

Originally posted by stevewf1


We'll see. I do believe that the "economic market" will eventually decide this anyway - which is the best thing.


THAT is all that needs to be said. There won't be a budget cap, costs will not be brought down by regulation. Costs will be brought down by economic reality. Its not like this is unusual in the history of Grand Prix racing. The manufacturers spent wildly in the early to mid twenties, recession hit and they all pulled out, leaving Grand Prix racing to the first 'privateer' era. Then in the thirties manufacturers spent ludicrous amounts again. After the war, more austere times precluded most manufacturers from spending too much, and throughout the sixties and seventies and eighties they were few and far between (aided by the specialist constructors being so good, not weighted down with the bureaucracy of the manufacturers).

The manufacturers will race to outspend each other until it all gets too much for them.

#66 Motormedia

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Posted 29 December 2007 - 10:05

Originally posted by angst


The manufacturers will race to outspend each other until it all gets too much for them.


What would happen then? Would the manufacturers pull out? For how long can the non manufacturers sustain? Can the sport afford that? And is it really the optimum way of dealing with the problem?

Motormedia

#67 F1Champion

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Posted 29 December 2007 - 10:16

Originally posted by imaginesix
Wow, a reward for losing. :lol: Think about it.


True, but at the end of the day all teams want to win, especially the manufacturers for publicity and bragging rights.

Do you think with that system teams like Ferrari and McLaren would sit in 5th and 6th in the championship? Teams like Renault have to win in order to stay in F1.

#68 F1Champion

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Posted 29 December 2007 - 10:19

Originally posted by angst


THAT is all that needs to be said. There won't be a budget cap, costs will not be brought down by regulation. Costs will be brought down by economic reality. Its not like this is unusual in the history of Grand Prix racing. The manufacturers spent wildly in the early to mid twenties, recession hit and they all pulled out, leaving Grand Prix racing to the first 'privateer' era. Then in the thirties manufacturers spent ludicrous amounts again. After the war, more austere times precluded most manufacturers from spending too much, and throughout the sixties and seventies and eighties they were few and far between (aided by the specialist constructors being so good, not weighted down with the bureaucracy of the manufacturers).

The manufacturers will race to outspend each other until it all gets too much for them.


I agree with the free market approach, but I would also add some sort of contingency fund in the tough times when it looks like independents could fall off the grid and leave the grid with less than 10 teams.

#69 Dudley

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Posted 29 December 2007 - 11:01

Originally posted by Dmitriy_Guller

Look at all the people referring to free markets (completely oblivious to the fact that free market concepts work very poorly in tournament-like situations that are the nature of all sports). Other people are predicting doom when teams will only be able to spend 100 million per season rather than 200.

Throughout the history of motor sports, big money in the long term proved to be deadly. It's a lot easier to get hooked on a lot of cash than to get weaned from it when it's gone.


All perfectly sensible but again you can't police it.

Yeah, I can think about it and if you did too you'd realise it's the same concept as in NHL and other team sports in the US where the lesser teams get to draft first...


Yeah I did always find it surprising the Americans so willingly sign up for what is effectively "Sports communism".

#70 imaginesix

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Posted 29 December 2007 - 18:55

Originally posted by F1Champion
Do you think with that system teams like Ferrari and McLaren would sit in 5th and 6th in the championship? Teams like Renault have to win in order to stay in F1.

Only Ferrari and McLaren won last season. Renault last won 2 seasons ago, Honda 3 seasons ago, Williams 4 seasons ago. Why are they coming back in '08, never mind winless Toyota (6 seasons) and BMW (2 seasons)? And what carried Honda through their 6 season winless streak? And for that matter, why did Stewart quit F1 the same season they won their first race, in '99?

Are you sure winning is that important to all the 'teams like Renault'?

#71 imaginesix

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Posted 29 December 2007 - 18:59

Originally posted by Motormedia
Yeah, I can think about it and if you did too you'd realise it's the same concept as in NHL and other team sports in the US where the lesser teams get to draft first...

Motormedia

Major league sports don't live and die on their draft picks, while TV revenues account for at least 1/3 of F1 teams' income. Some rely on TV revenues entirely.

#72 imaginesix

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Posted 29 December 2007 - 19:05

Originally posted by F1Champion
I agree with the free market approach, but I would also add some sort of contingency fund in the tough times when it looks like independents could fall off the grid and leave the grid with less than 10 teams.

Now there's a sensible proposal. Really, race teams are integral to the operation of the sport, the FIA should look out for them at least this much.

#73 Leyser

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Posted 29 December 2007 - 22:11

Originally posted by Motormedia


Yeah, I can think about it and if you did too you'd realise it's the same concept as in NHL and other team sports in the US where the lesser teams get to draft first...

Motormedia


And if you think about it even more you'd realize that it's not, because draft picks != revenue.

#74 Mat

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Posted 30 December 2007 - 00:48

Originally posted by imaginesix
Major league sports don't live and die on their draft picks, while TV revenues account for at least 1/3 of F1 teams' income. Some rely on TV revenues entirely.


Uhhh, a team that is weak and finishes down the order is always very welcoming of its priority draft picks!

And no team relies on Tv revenues alone. See those sponsor decals on the cars? Even though there are less of them on the Spyker & Super Aguri, those stickers still help to pay the bills.

#75 Mat

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Posted 30 December 2007 - 00:51

Originally posted by imaginesix
Now there's a sensible proposal. Really, race teams are integral to the operation of the sport, the FIA should look out for them at least this much.


why?

I say don't look out for them at all. I applaud alot of restrictions they have made, in limited wasted spending like testing, etc. But i say let the teams spend themselves into obvlivion. The best way to create a budget cap is to let the sport have its own recession. Whats the difference between having 7 teams or 11? I watch enough motor sport throughout the year that im not going to be suicidal if F1 is a bit lame for a year or two. Hell, i've put up with that fom the IRL & champ car for the last 5 or so years.

#76 imaginesix

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Posted 30 December 2007 - 01:10

Originally posted by Mat
Uhhh, a team that is weak and finishes down the order is always very welcoming of its priority draft picks!

And no team relies on Tv revenues alone. See those sponsor decals on the cars? Even though there are less of them on the Spyker & Super Aguri, those stickers still help to pay the bills.

First draft pick gives a competitive advantage, of course the weaker teams welcome it.

The contribution of TV revenues towards the survival of F1 teams is enormous, which is not at all the case for draft picks. Simply, F1 teams would fight for more TV revenue even if it came at the expense of their season's end ranking while major league sports teams wouldn't do the same just for a priority draft pick.

#77 imaginesix

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Posted 30 December 2007 - 01:17

Originally posted by Mat
why?

I say don't look out for them at all. I applaud alot of restrictions they have made, in limited wasted spending like testing, etc. But i say let the teams spend themselves into obvlivion. The best way to create a budget cap is to let the sport have its own recession. Whats the difference between having 7 teams or 11? I watch enough motor sport throughout the year that im not going to be suicidal if F1 is a bit lame for a year or two. Hell, i've put up with that fom the IRL & champ car for the last 5 or so years.

The sport is also a business, and nobody lets their business fall into recession on purpose. It's just in the FIA's interest to ensure the survival of the teams that contribute to the wellbeing of the series. It's not like there is a list of teams waiting to get into the series if another one fails.

The difference between having fewer or more participating teams has nothing to do with your personal enjoyment, it speaks to the credibility of the series.

#78 Mat

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Posted 30 December 2007 - 01:26

Originally posted by imaginesix
First draft pick gives a competitive advantage, of course the weaker teams welcome it.

The contribution of TV revenues towards the survival of F1 teams is enormous, which is not at all the case for draft picks. Simply, F1 teams would fight for more TV revenue even if it came at the expense of their season's end ranking while major league sports teams wouldn't do the same just for a priority draft pick.


Draft picks can be just as an enourmous contribution as extra revenue. If weak teams did not have the future hope of better players then sponsors would drop off very quickly.

I have seen discussions about a team in the AFL (australian rules football), which also runs under the same draft pick rules, decide if they wanted to finish second last or last on the ladder so that they could get the best draft picks. I don't think such a thing happens very often as we all know why a team competes and that is to win. 99% of the time a team will go for a win instead of the money/draft pick. And that goes for F1 teams as well. And id imagine that has a lot to do with the fact that winning leads to more revenue anyway (in the long run).

Are you implyng that you think a major F1 team wold deliberatly finish lower to earn more revenue? I think that is highly debatable as most of them are finishing their now anyway and there is no benefit!

#79 Mat

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Posted 30 December 2007 - 01:27

Originally posted by imaginesix
The sport is also a business, and nobody lets their business fall into recession on purpose. It's just in the FIA's interest to ensure the survival of the teams that contribute to the wellbeing of the series. It's not like there is a list of teams waiting to get into the series if another one fails.

The difference between having fewer or more participating teams has nothing to do with your personal enjoyment, it speaks to the credibility of the series.


I agree with all that too.

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#80 imaginesix

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Posted 30 December 2007 - 01:31

Originally posted by Mat
Are you implyng that you think a major F1 team wold deliberatly finish lower to earn more revenue? I think that is highly debatable as most of them are finishing their now anyway and there is no benefit!

Absolutely! Those who weren't in contention for a win (top 2, maybe 3 teams) would compete to see who could have a 'hydraulic failure' before any of the others did. That's why I was laughing at the proposal!

They would have to devise a whole new rating system to determine who finished last first!

#81 Mat

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Posted 30 December 2007 - 01:40

Originally posted by imaginesix
Absolutely! Those who weren't in contention for a win (top 2, maybe 3 teams) would compete to see who could have a 'hydraulic failure' before any of the others did. That's why I was laughing at the proposal!


At the moment, money gets divided up depending on: just competing, championship standings, race positions from 1/4, 2/4, 3/4 distance and race results and also tv exposure. This will not be gotten rid of in favour of a reverse revenue system. Ever.

Despite the fact you would never get a reverse revenue system in place as it ludicrous, how does your above example help the team? There are better business models then that if you just want to make a profit.

#82 SkorbiF1

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Posted 30 December 2007 - 01:56

"F1 Budget Cap" there's an idea that'll never work.
In a sport like football or ice hockey, you can conttrol the amount of money each team pays to it's players, a driver budget limit (which would be stupid) could work in F1 too, but there is no way to control the entire budget of a team.

drunk post, ignore typos

#83 Mat

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Posted 30 December 2007 - 02:05

Originally posted by SkorbiF1
"F1 Budget Cap" there's an idea that'll never work.
In a sport like football or ice hockey, you can conttrol the amount of money each team pays to it's players, a driver budget limit (which would be stupid) could work in F1 too, but there is no way to control the entire budget of a team.

drunk post, ignore typos


spot on.

#84 imaginesix

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Posted 30 December 2007 - 02:26

Originally posted by Mat
Despite the fact you would never get a reverse revenue system in place as it ludicrous, how does your above example help the team? There are better business models then that if you just want to make a profit.

Dunno, seems like a low risk, low commitment venture to just field a team that qualifies then fails to make it to the first corner. Then rake in the cash rewards.

Jeez that's funny!

#85 Mat

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Posted 30 December 2007 - 02:32

If you so say!

#86 imaginesix

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Posted 30 December 2007 - 04:30

Tell that to the women in my life.

#87 stevewf1

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Posted 30 December 2007 - 06:55

Originally posted by scheivlak
Please tell us why, how and where they can spend, say, 600 million more


So what are they spending $400 million on anyway?

Seems like I read in F1 Racing (a couple of years ago) that Toyota's F1 spending was estimated to be in the "$500 million range"... This is F1, so I'm sure another few hundred mil could be spent - on something - no problem.

:

#88 Dudley

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Posted 30 December 2007 - 14:32

A driver budget limit (which would be stupid) could work in F1 too


No it couldn't because Vodafone could simply play McLaren less money and hire Lewis to do ads for the same money.

#89 scheivlak

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Posted 30 December 2007 - 19:58

Originally posted by stevewf1


So what are they spending $400 million on anyway?

Seems like I read in F1 Racing (a couple of years ago) that Toyota's F1 spending was estimated to be in the "$500 million range"... This is F1, so I'm sure another few hundred mil could be spent - on something - no problem.

:

But they don't, which answers your question ;)

Might well have something to do with the Law Of Diminishing Returns.....

#90 J2NH

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Posted 30 December 2007 - 20:20

Where are the savings that recent rule changes were supposed to bring about?

Two weekend race engines, limited testing.

Race engines must be saving something but does anyone honestly think that teams reduced their budgets because of it?

Limited testing. Concept okay, implementation a joke. CFD and more wind tunnels were the teams response. Then we have McLaren and their driving simulator at a cost of a billion dollars (joke, but it was alot). At least with the cars on the track we got to read times, catch some photos, jaw on Atlas, now it is all done behind closed doors. Anybody ever even seen a picture of McLarens simulator? Who doesn't think that Ferrari, Renault, Toyota and Honda aren't planning on building their own?

Budget cap work? Right now their is a rule that teams have to build their own cars and look what Honda did with Super Aguri and Red Bull did with Toro Rossa. Shell companies owning rights and selling or leasing to teams. If this simple rule won't work how could a "cap" ever be workable?

Teams spend $1 more than they have and then complain.

#91 jokuvaan

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Posted 30 December 2007 - 21:24

I dont believe that budget could be monitored fully. There would be cover firms doing engineering who would get paid by sponsors through some way. Moving ready data would be very easy, not even FIA firewalls or body search would help.

Some universities might do work even without knowning where the results are going in the end.

#92 Motormedia

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Posted 31 December 2007 - 09:57

The funny thing is that every proposed measure to cut costs is deemed ludicrous and impossible to monitor, while at the same time the current system obiously doesn't work. Why the current system then would contribute to a solution, apart from the unavoidable implosion when the whole thing collapses, is beyond me. The last 20 years has seen all kinds of ridicilous actions been implemented without any long lasting effect.

Someone in thıs thread was surprised to find the american team sports implementing "communist ideas"... I think it speaks volumes about the perspective too many have on this problem. From a commercial and sporting perspective both Bernie and the FIA has to look at the problem from a perspective where the sport itself is the product. The teams have other incentives and motives to go racing. Bernie and FIA needs to make sure there is a product to market and sell that has a long term potential to grow. People that think that Formula 1 should wait for the market forces to sort out the problem from inside have a very narrow and short minded way of looking at the problem, completely disregarding other problems that may arise. If F1 would implode and go inte a depression for a few years it would take a hit it may not recover from. In the meantime sponsor capital, partners and fans will move to other sports and F1 will lose market shares to other sports. Could anyone imagine soccer go through a sudden slump, with teams going bust, devalued championships and so on? It just won't happen and I think the main reason is that the governing body has a firm grip on the sport as a product. Much more so than FIA and Bernie. I don´t envy Bernie in the sense that he has a product to sell which he doesn´t have any control over.

Inversed reward systems might not work but then I believe Formula 1 has no other way to go than to become a one make series. Possibly a franchise system could be put in place. Today it is obvious that the money being distributed among the teams from tv and so on is not enough for the teams to put the better of the sport in front of their own immediate needs. That needs to be changed so that everyone starts to pull in the same direction.

Motormedia

#93 ensign14

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Posted 31 December 2007 - 10:05

Originally posted by Motormedia
The funny thing is that every proposed measure to cut costs is deemed ludicrous and impossible to monitor, while at the same time the current system obiously doesn't work.

The default setting in F1 is to say that every proposal is ludicrous and doesn't work. Yet somehow everyone seems to manage.

#94 Buttoneer

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Posted 31 December 2007 - 10:53

Originally posted by Dudley


No it couldn't because Vodafone could simply play McLaren less money and hire Lewis to do ads for the same money.

They could legislate against this particular issue by ensuring that a team sponsor could not also be a driver sponsor. If Lewis appears in a Vodafone ad he does not appear in race overalls. Overall though, I agree with the premise that the budget cap could not work even if I like the idea of it.

#95 ensign14

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Posted 31 December 2007 - 10:55

There MUST be a way to make it work, after all they do in US sports, but I agree it would be difficult. It would probably involve Kroll or someone being given full account investigatory powers or something. And massively draconian penalties for anyone in breach (expulsion for a couple of years). But all sponsorship money would presumably have to go to the FIA for redistribution...

Then again the testing bans seemed to work. There's no indication that anyone buggered off to Equatorial Guinea or somewhere out of sight to sneak in some extra work.

#96 Buttoneer

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Posted 31 December 2007 - 11:00

Originally posted by ensign14
There's no indication that anyone buggered off to Equatorial Guinea or somewhere out of sight to sneak in some extra work.

Of course that is equally proof that the teams are brilliant at cheating...

I think someone pointed out above that the US sports example relies on salary caps and F1 is so much more than just the salary, which is where the problems arise. I'm sure I remember a similar attempt to cap budgets in a North American race series which was circumvented by a team outsourcing engine development to another company which ran an a silly loss to sell the engines in super-cheap. The race team kept within budget even though the spending was actually wild.

I REALLY like the idea of budget caps and I'd love to be sitting here typing away that it is eminently do-able but I just can't. There are too many ways to cheat the system IMO.

#97 howardt

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Posted 31 December 2007 - 11:46

In a large multinational corporation, the accountant's answer to any question is: "Tell us what you want the answer to be".
In other words, policing a budget is utterly impossible. If the FIA imposes a maximum budget of $10 per year per team, then the teams will run on exactly $10 per year, and provide accounts to prove it.

Won't change much about F1, but it would employ more accountants.

#98 Dudley

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Posted 01 January 2008 - 11:47

Originally posted by Buttoneer

They could legislate against this particular issue by ensuring that a team sponsor could not also be a driver sponsor. If Lewis appears in a Vodafone ad he does not appear in race overalls. Overall though, I agree with the premise that the budget cap could not work even if I like the idea of it.


F1 would be sponserless in a year.

They're not there for the car coverage, they're there for the ads and personal experiences. With that rule in plae there's little to no point in Santander even being there.

Plus that would mean that Toyota wouldn't be able to use their own cars and drivers in their OWN adverts? You are of course kidding?

#99 imaginesix

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Posted 01 January 2008 - 17:16

Originally posted by Dudley
F1 would be sponserless in a year.

And that's the answer.

The only way to get the money out of F1 is to remove (or at least reduce) it's Return on Investment. Right now the return comes for the greatest part in the form of public awareness of the brands involved. So, reducing the audience is one way of reducing the ROI, but that seems impossible to accomplish as demonstrated by the ever increasing fan base despite the FIAs best efforts over the past 5 years. The other way is to reduce the ability for sponsors to expose their brand to the audience.

The most obvious way to do that is to ban sponsors on the cars. Each team would choose their own team colours and would have to leave room for those companies that provide spec parts (tires, ECU, gas). So Ferrari could retain it's Red, McLaren could go with Orange ( :up: :up: :up: )... But that could only be the beginning. The team names themselves would have to be dissociated with any brand of product so that Ferrari, Mercedes, Honda, BMW, Toyota or Renault could not benefit from any direct association between their road cars and F1 teams. Team names would have to be registered and incorporated brands in their own right, with NO income or expenses (except for registration costs, which would be peanuts anyways and the FIA could pay for). So Ferrari might create a company called Scuderia Cavallino Rampante to front for them in F1, Lotus could come in as Team Hethel (in British racing Green, of course). Honda could appropriate their Mugen brand to act as stand-in for their company. Toyota could name their F1 team Toyoda! Fans would know exactly who they are but their ROI would be reduced as they couldn't claim to be participating in F1 directly but only through their association with these teams. The same would be true for team sponsors, they could claim an association with different teams but they couldn't pass the teams off as their own.

Of course, the teams would never approve, but that just kinda shows the power of the idea I think as they would have to be crazy to voluntarily compromise their ROI! Other than that, I think it would work great.

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#100 MikeTekRacing

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Posted 01 January 2008 - 18:30

and why would they run? ferrari are in it to sell cars, the rest the same
why would a formula described by you even exist?