23 replies to this topic

[RA2]

https://www.motorspo...t-cap/10381554/

 

 

 

> Team spends $145 million on racing activities (the KEY reason for the teams existence) 

 

> Team spent $185 million on non racing activities

 

> Team only had to trim spending by $30 million from previous years to meet the budget cap

 

> Staff headcount was only reduced from 1063 to 1004

 

> Team earned $ 425 million 

 

 

After all this Wolff is       

 

[FullOppositeLock]

NWOAT

[Pete_f1]

Uh?

[noikeee]

Well that is an interpretation of things.

[ARTGP]

Not sure what’s being implied here but the lesson one should take is that all the big teams likely had expenses which far exceeded the cost cap and it was a matter of claiming what they believed to be legitimate “deductions” and “exclusions” to fall under the cap.

[Anderis]

The salaries of drivers and top3 of staff don't count, that alone will be in dozens of millions of $ for top teams.

[Ali_G]

https://www.motorspo...t-cap/10381554/



> Team spends $145 million on racing activities (the KEY reason for the teams existence)

> Team spent $185 million on non racing activities

> Team only had to trim spending by $30 million from previous years to meet the budget cap

> Staff headcount was only reduced from 1063 to 1004

> Team earned $ 425 million


After all this Wolff is

How did Mercedes achieve such a reduction in costs given only a small fall in headcount. Payroll is by far the biggest cost for any F1 team. They must have cut wages across the board?

[Nemo1965]

Here’s another take on it, by the unrivaled Dieter Rencken. Spoiler-alert: the cost-cap made Mercedes make more profit.

https://racingnews36...ng-f1s-cost-cap

[Mechanic44]

Why have you created a new thread for this? Stick it in the budget cap thread

[noikeee]

Spoiler-alert: the cost-cap made Mercedes make more profit.

 

Wasn't this dead obvious from the very beginning? Big income teams agree to spend less. The income stays the same. Therefore, more profit.

 

This is one of the big reasons why the budget cap was so enticing. Prevents an arms race from spiralling out of control until F1 disappears out of its own arse (like so many motorsport series of the past, Group C, Can-Am), but also makes F1 much more financially sustainable as suddenly having a F1 team can be very lucrative instead of a money pit.

[Risil]

What are the "non-racing" activities, out of interest?

[ARTGP]

What are the "non-racing" activities, out of interest?

 

It's likely a little bit of heritage activity but predominantly the applied sciences division which takes on various "boutique" projects with the aim to help others "break records".

 

 

Like other top teams, Mercedes has shifted many F1 people into non-racing projects.

"In applied science, we have America's Cup, and we have various other projects on performance engineering," Wolff added.

"We don't want to be an engineering boutique that offers service to the industry. It's really about records, wherever wants to be - records on land, sea, air and space, this is an area for us."

Edited by ARTGP, 08 October 2022 - 17:25.

[monolulu]

What are the "non-racing" activities, out of interest?

Crucially, marketing, administration, heritage car operations, team travel and other non-competitive expenditure are all excluded from $145m 2021 cap.

[HP]

Wasn't this dead obvious from the very beginning? Big income teams agree to spend less. The income stays the same. Therefore, more profit.

 

This is one of the big reasons why the budget cap was so enticing. Prevents an arms race from spiralling out of control until F1 disappears out of its own arse (like so many motorsport series of the past, Group C, Can-Am), but also makes F1 much more financially sustainable as suddenly having a F1 team can be very lucrative instead of a money pit.

That is one way to look at it.

 

Another view is to tally the "non-racing" related stuff to the bill. If for example administration costs are not counted to F1 expenses, they surely they need show up in accounting somewhere else. I doubt that administration makes profit for itself.

 

And well, boutiques in my home country have not all a very good reputation. E.g. Some of them are used for money laundering purposes. So I do wonder what Toto was thinking when he tried to explain things that way. Not very smart IMO.

 

In any case, that entire cost cap stuff in F1 seems to me a bit like "creative" accounting.

[Clatter]

That is one way to look at it.

 

Another view is to tally the "non-racing" related stuff to the bill. If for example administration costs are not counted to F1 expenses, they surely they need show up in accounting somewhere else. I doubt that administration makes profit for itself.

 

And well, boutiques in my home country have not all a very good reputation. E.g. Some of them are used for money laundering purposes. So I do wonder what Toto was thinking when he tried to explain things that way. Not very smart IMO.

 

In any case, that entire cost cap stuff in F1 seems to me a bit like "creative" accounting.

 

So they can sack all the administrators and put engineers in their roles. Who checks the staff are doing what their title suggests they should be?

[ARTGP]

So they can sack all the administrators and put engineers in their roles. Who checks the staff are doing what their title suggests they should be?

It’s called scouts honor I believe.

Even just having a roster of “administrators” toiling away optimizing the categorization of every expense, exchange rates, and so on is a big advantage for the big teams and it’s uncapped.

Do you think Haas has even half as many administrators plotting away on the best way to classify expenses and move people around?

Edited by ARTGP, 08 October 2022 - 22:10.

[Atreiu]

Here’s another take on it, by the unrivaled Dieter Rencken. Spoiler-alert: the cost-cap made Mercedes make more profit.

https://racingnews36...ng-f1s-cost-cap

Thanks for the link.

[fed up]

I’ll go back to what I said about Mosley and his fears for the future of this sport if it overtly courts manufacturers into the sport. Not only are they fickle; bailing out at the drop of hat (Honda, Toyota, BMW, Porsche, etc) but they also want influence and treat it like a business. 
 

So Toto as a share holder benefits form the cost cap. He’s apparently worth half a billion dollars, euros or £’s - he’s rich as an oil sheik but he’s still not happy and moans and moans. 
 

The sport has gone away from the fans. Greed is everywhere. Oligopoly. Closed shop. Cut everything to the bone so that the shareholders can take home more of the pie. But while you’re at it make sure no one else can join the club, because they’ll cut into our profits.

 

What a shame. It’s almost as if the actual racing is a side show, with the endless scandals, accusation of cheating and corrupt officials. It’s too late to rescue it now folks, the vested interests have already parked their slippers under the bed and are going nowhere, and why should they.

[mclarensmps]

The sport has gone away from the fans. Greed is everywhere. Oligopoly. Closed shop.

 

The sport was never with the fans, and the greed, oligopoly, and closed shop was always there ever since Bernie and Max operated things. 

[HP]

The sport was never with the fans, and the greed, oligopoly, and closed shop was always there ever since Bernie and Max operated things. 

It was there before. As soon as the championship became organized, somewhere, some not so racing focussed folks earned their share.

[jjcale]

It's likely a little bit of heritage activity but predominantly the applied sciences division which takes on various "boutique" projects with the aim to help others "break records".

"We don't want to be an engineering boutique that offers service to the industry. It's really about records, wherever wants to be - records on land, sea, air and space, this is an area for us."

 

Sounds like bullshit ...

[jjcale]

Anyway - I dont care what they make or dont make .... I am not a shareholder ...I am a veiwer - I care only about the quality of the entertainment and the integrity of the sport. 

 

Sustainability - business or otherwise - of F1 is not my problem.... I am amazed how many think that because they are a fan they have some interest in this .... I even saw a thread once on past sponsors - like any of us gets paid ... like we are not the ones ultimately paying.

 

The interests of the owners of F1 are not my interests .... and to a certain degree our interests are in conflict..... as fans we should try to work out what is in our interests and advocate for that. Not engage in a form of stockholm syndrome where we seem to believe that what is good for the owners of F1 is automatically good for us.  

[fed up]

The sport was never with the fans, and the greed, oligopoly, and closed shop was always there ever since Bernie and Max operated things. 

What you’re seeing now is about vested interests, not the interests of the fans. 
 

Why can’t million dollar drivers with extreme wet tyres not be able to drive around the track in these conditions? Why has the sport not invested resources to make sure that racing can go in in any weather? I mean I can drive my car in extreme wet conditions so why can’t this lot? I’ll tell you why, because manufacturers don’t like seeing their cars with damage on the side of the track. It’s not good for their image so they try their best to make sure the risk of it is removed.

It’s ridiculous.

[yolo]

Here’s another take on it, by the unrivaled Dieter Rencken. Spoiler-alert: the cost-cap made Mercedes make more profit.

https://racingnews36...ng-f1s-cost-cap

 

Which is the point of the cost cap. To make sure team owners can actually reap some profits from operations, or at least break even.