About the F1 Resource Restriction Agreement

[JohnsonsEvilTwin]

Yes that sounds alot better. But the problem was, and why FOTA kicked off, because Max wanted that figure at 40 million. I think the limit needs to be 60 million more than smallest budget.
This is workable, not excessive and allows the big guys some breathing room.
By the same token the smaller teams can be within reach of the big guys So long as their isnt a team with a stupid budget of 40m like HRT.....

[JohnsonsEvilTwin]

FOTA have a gentlemens agreement(no signatures) for the resource restriction. But its very vague and how on earth is it enforceable?

Sorry to destroy your illusions. The RRA is a legally enforceable contract. It was designed that way. Even more important the 2009-2012 Concord Agreement would have never been signed unless it was legally binding. You can take it to the bank that all teams are bound to it unless they agree to change it! Daimler AG, McLaren Group, Aabar and a bunch of other huge corporations made massive financial decisions based on that contract. It will shape the reality of F1 in the coming years.

Why then no figures? My opinion is based purely on Ferraris posturing. They appear to want to be very anti "resource restriction" saying its unworkable.
This does not sound like a cast iron initiative WB.

I hope it is though and I stand corrected to the details of the agreement

[WhiteBlue]

Why then no figures?

It is obviously a highly sensitive document in terms of human resource impact. They would not publish it to avoid legal problems wen they fire hundreds of people or shift them to other departments. There is also a potential impact on revenues from sponsors and TV contract. It weakens the negotiating position. So there are plenty of reasons to keep the details secret. Nevertheless the RRA exists, is legally binding and will bring budgets down considerably.

The rich teams will still be able to spend as much money as they want on drivers, star engineers, salaries, equipment, facilities, consumables and marketing though. So they still enjoy advantages from their accumulated wealth.

[JohnsonsEvilTwin]

The rich teams will still be able to spend as much money as they want on drivers, star engineers, salaries, equipment, facilities, consumables and marketing though. So they still enjoy advantages from their accumulated wealth.

Whats the point then WB? Do you see what I mean?

[ISLAMATRON]

The point is this was the only thing that Ferrari would agree to after blowing up any idea of a budget cap, and the other teams are too cowardly to let Ferrari go fruck themselves and allow them to walk all over their backs mafia style.

Luca got fellow idiots Howwett and Horner to join his stupidity and effectively killed a budget cap which killed any chance for major technical advancement(without huge expenditure), but the other teams demanding some sort of cost cutting were able to get the RRA, but Luca probly bamboozled them on that too.

[JohnsonsEvilTwin]

But how does a budget cap sit in a free market sport?

Lotus back in the 60s and 70s had a tiny budget back then but still triumphed through ingenuity. The problem in F1 today lies not with Ferrari or Budgets, it lies in the rule makers book.

If we had 20 cars within 2 seconds of each other we would not be discussing budgets at all. Its happened this decade, 2005 I think.
Ferrari will suffer the most in a budget cap, so I should be all for it as I dislike the "poncey horse" as much as some of you. However, I think its unfair to have everyone spend the same amount. Because in the end, Accountants will be the victors of F1, and their "creative accountancy".

This is not what racing is about.

There is no correlation to money spent/points attained. Toyota would be world champs 5 times over had this been the case.

For me, If you give the little guy the oppurtunity to race with a big boys chassis, and an engine of their choosing, you are almost there.

Ferrari can then spend 200million doing what they like, but will then be forced to supply chassis for 5 million per season. And they must be the same spec as the factory team.
So if they have gained some advantage, Mercedes, Renault et al can easily find the source of said advantage and apply it readily.

The reason I say this is because they could have a "satelitte" team that monitors the others tech. Call it "spying" but it prevents a huge 200million budget because no idiot would spend that sort of money to gain no advantage.....Ok Luca might

[WhiteBlue]

Toyota could not buy themselves championships but they contributed their share to push up the price of winning to such heights that no talented new team would ever have a chance.

Some reasonable people remembered that F1 was working pretty well before Ron Dennis managed to strip 200 million $ from Daimler and Ferrari 120 from Philip Morris and 100 from Ecclestone each year. The two teams got the arms race started which quickly got joined by Honda, Renault, Toyota, BMW and Red Bull eventually. After that the racing competition was never what is was before 1996 and all the young and smaller teams without huge benefactors went bust.

I know that the Darwinists see F1 different but I liked it better in the pre 1996 form and I see the RRA as an attempt to go back to that time when obscene amounts of money wasn't the most important competitive factor. Building a car takes resources and with restricted resources it may be possible to get a more level playing field to compete.

A team can build a brilliant car without a 20 million marketing palace to wine and dine journalists and clients in. Good drivers will never decide just with money in mind but mainly by the quality of a car that a team builds. Brilliant engineers will also be brilliant at the begin of their career when they are not only hired by top paying teams but also by young hope full teams with great enthusiasm.

We will only see a more reasonable resource distribution and the resulting better competition of ideas from the season 2012. The 2011 cars will still be build with a factor of 10 in terms of budgets and resources. But from the 2012 cars we can expect to see the one or other surprise when the testing or racing commences.

F1 will be more fun and more creative that way and less predictable. We should also get more teams coming in from GP2 or other series to occupy the emptied grid slots. When and if teams like Sauber or HRT fail we will quickly see replacements in the new order.

So there is a pretty good chance that the RRA will make F1 better and no Darwinist will change my view of that with his cynical outlook on life.

[timbo]

I know that the Darwinists see F1 different but I liked it better in the pre 1996 form and I see the RRA as an attempt to go back to that time when obscene amounts of money wasn't the most important competitive factor.

Really? So Williams and McLaren didn't have a big budget? Or maybe Tyrrell 019 won the champ?

[autogyro]

Reality check fellas. The world economy will not allow companies to invest huge amounts in F1, or anything else come to that.
Small teams with much less available money must be encouraged to fill the gaps of the manufacturer teams who have left F1 and others (including Ferrari) that might in the future.
If you listen to those in FOTA who follow the ambitions of criminals like Briatorre and Montezemolo, then you are simply deluding yourself.

[TheRMVR]

Reality check fellas. The world economy will not allow companies to invest huge amounts in F1, or anything else come to that.
Small teams with much less available money must be encouraged to fill the gaps of the manufacturer teams who have left F1 and others (including Ferrari) that might in the future.
If you listen to those in FOTA who follow the ambitions of criminals like Briatorre and Montezemolo, then you are simply deluding yourself.

Saying Montezemolo is a criminal makes you pathetic.

[JohnsonsEvilTwin]

Lets forget the insults and discuss the agenda.

I agree Ferrari have been excessive, but its viable for them. There are other ways of making teams spend less. Making the latest chassis available to anyone with £5million is a start. Ferrari would think twice about spending 200 million if they are made to sell it for 5million.

Secondly, F1 needs to work on a solution that allows cars follow and overtake more easily. Then stick to it.

Unnecessary rule changes make the cost of F1 go up hugely. By sticking to a set of rules that are found to be in the public interest, the field spread would be reduced dramaticall within 2 years if the chassis idea was floated.

Thirdly, the rulebook needs to be writen by the FIA with the teams present. Where there is ambiguity they should get clarification BEFORE a season starts. Once everyone is singing from the same rule book, we can see who is the most "resourceful".

And finally pertaining to the chassis idea, I think "customer" teams should be allowed to modify the car in ways it sees fit. The idea could revolutionise F1 whilst not making it a spec series we all fear....

[autogyro]

Reality check fellas. The world economy will not allow companies to invest huge amounts in F1, or anything else come to that.
Small teams with much less available money must be encouraged to fill the gaps of the manufacturer teams who have left F1 and others (including Ferrari) that might in the future.
If you listen to those in FOTA who follow the ambitions of criminals like Briatorre and Montezemolo, then you are simply deluding yourself.

Saying Montezemolo is a criminal makes you pathetic.

Read my post again carefuly, I did not call Montezemolo a criminal, although on his recent activity many would think so.

[Carfiend]

It makes me wonder what these people saying the caps on headcount (RRA) would think if they were one of the many people now being made redundant from their jobs within formula one. Many of these people have families and dependants.

Budget caps are a good idea to an extent but surely it is not legal for a group of companies to form a 'cartel' effectively to control each others business. The FIA could not do it to the teams due to EU Legislation so how can FOTA...

[autogyro]

Good point.

[WhiteBlue]

It makes me wonder what these people saying the caps on headcount (RRA) would think if they were one of the many people now being made redundant from their jobs within formula one. Many of these people have families and dependants. Budget caps are a good idea to an extent but surely it is not legal for a group of companies to form a 'cartel' effectively to control each others business. The FIA could not do it to the teams due to EU Legislation so how can FOTA...

You are addressing a very serious issue there. FOTA and FOM have been setting up a cartel since 1981 to control the business side of F1. In 2009 we had a recession as we had one in 2000 and in 1991. The difference of the 2009 recession to the other two was it has not been painted over by huge growth of the cartel revenues.

The 2000 recession was completely missed by F1's employment due to a concentration effect. Some teams went bust but their personnel was largely absorbed by the biggest players who could expand their budgets rapidly due to the influx of the manufacturer money and the additional money FOM made from the spectators and tax payers.

Nevertheless the crisis was realized by those who knew that a third of the cartel revenues was coming from five large scale automotive manufacturers who all pumped $200-300 mil into F1. If a recession would hit those companies, one billion $ could go up the chimney any minute.

And in 2008 exactly that started to happen. This time the recession wasn't triggered by the Dotcom and Telecom bubble blowing up but the by the globalization crisis and the following loan crisis when the US simply made the world pay for their Asian imports. That recession hit F1 harder than anything before. The teams could not compensate for the loss of the manufacturers and financial services sponsors.

The governing body managed to force the cartel to accept new teams. That was the only positive side because the new teams absorbed some of the personnel of the bust manufacturers. Still the cartel finally had to reduce cost to keep enough teams viable to stay in business with the TV companies. Five or six teams would not have been accepted by the viewers as a legitimate series. The compromise that was found is still one which is going to bring down employment in F1 significantly.

So is the present cost cutting really necessary and legal? The necessity is quite obvious when you see that the recession is more or less weathered but the loss of sponsoring by the manufacturers and the banks has not been compensated. F1 failed to lure Aston Martin, Hyundai, TATA or VW into the cartel because the cost of competing successfully is still too high.

The question of the legality of the Concord agreement as a business cartel has never been examined by a European court because nobody wanted to upset the apple cart. If a large group of unionized F1 or ex F1 employees brought this in front of a labor court all hell could brake loose. At the moment this prospect is not very realistic as there is no such thing as an F1 union and individual workers with redundancy grieves do not have the financial means to fight a law suit. So there you are.

There is no alternative to the RRA and if by chance someone made a successful legal complaint against FOTA/FOM things would go from bad to worse for the residual employees.