About the F1 Resource Restriction Agreement

[marcush.]

coming back to my idea from april ..
í think the idea ain´t bad at all.
The Big honcho teaams would still need to find aall the money they can possibly find -but a fair bit of that effort does flow back into a pot from which every team does participate at the same rate ...

This system -you have to put 50% of your budget into a common pot would currently result in roughly 100mill€ per team
received from this pot .
A Team with 300Mill€ would have to put 150mill € into the pot and getting back just 100 -resulting in a 250mill€ total budget.
A team like HRT would of course get a huge 100mill back for their say 30mill put in

A team which has a 200mill€ budget would remain exactly there....

So it would be a great leveler financially ...If you want to spend more -fine but it will cost you a lot more to spend the extra dollar ..the gains will be effectively halved +the small teams suddenly have money to gain competitiveness +they have their own chance to attract sponsors and partners..
Also say Williams have a problem losing a big sponsor -no problem there -the community will cater for this and everyone has a bit less to spend ...

In effect it would lead to teams trying to be more efficient instead of finding more money so as not to help the opponents.

[WhiteBlue]

FOTA met in Suzuka to discuss cost control in F1.

http://www.autosport.com/news/report.php/id/103242

10 of the 12 team principals got together on race morning to discuss a range of pressing issues - including the future governance of F1, the rise in entry fees and cost controls.

It comes ahead of a crunch meeting with the FIA and Bernie Ecclestone in Paris on October 23 to try and reach agreement on the future direction of the sport.

Neither Red Bull nor its sister team Scuderia Toro Rosso were invited to the Suzuka meeting – which was the first time that fellow non-FOTA members Ferrari and Sauber have joined talks for some time.

It is interesting that Ferrari is included in the talks although they have officially left FOTA. I wonder if the meeting that is due on October 23 will be a meeting of the F1 commission. It is likely that the engines will also be on the agenda, considering that they are still an item of missing cost control and face opposition by Bernie.

[WhiteBlue]

From James Allan F1 blog:

Tomorrow (Tuesday) in Paris at the headquarters of the FIA, a very important meeting takes place with Jean Todt hosting the F1 teams and Bernie Ecclestone the F1 commercial rights holder. On the agenda will be the new eight year Concorde Agreement due to start in January 2013, a new FIA regulated cost control mechanism (Resource Restriction Agreement) relating to both chassis and engines, and the subject of spreading the costs of the 2014 engines across the full eight years, so the development costs are not front loaded and too expensive for teams.

I think it is a fair view to say ‘Why have one restriction agreement on chassis and nothing on engine? So, I think it is fair to say that if we do something, we have to do it on chassis and on engine. Are we going to do something on the engine in 2013? No. So, I think it is a strong opportunity. On that I will say more than these ten teams agreed that it’s something which could be agreeable to all the competitors if we would include the chassis and the engine from 2014.

I agree with Red Bull and Todt on the issue of robust cost control for both engine and chassis. It will be interesting to see if all the issues on the agenda can be resolved and the 2014 introduction date of the new formula be confirmed.

On the issue of entry fees I also feel that the FiA should get more money for their grass root work in motor sport. Whether it comes from Ecclestone or the teams is just a cosmetic operation because all the money first comes into FOM. But the FiA will find it easier to raise it from the teams and particularly from the rich teams.

[FoxHound]

What's the point in Red Bull bleating about engines when they aren't even in FOTA, who themselves try to operate within the RRA remit.
I for one hope they clamp down massively on aero in 2014, so that the laws of diminished returns would mean even a god like aero concept would only make a few tenths difference.

[WhiteBlue]

What's the point in Red Bull bleating about engines when they aren't even in FOTA, who themselves try to operate within the RRA remit.

I don't really see the logic in your post. Red Bull are not a works team and not a automotive manufacturer. Naturally they are concerned that unrestricted spending on power train developments would give manufacturer teams too much of an advantage. Both Red Bull and Ferrari have left the FOTA because they think that FOTA is not providing the needed solutions to cost control and other issues they have. About this over spending by Red Bull there are different opinions what is covered by the RRA. Mercedes for instance do not count resources and money they have in the engine company. Ferrari do all kind of things in other divisions outside the racing department which nobody can control. So Red Bull argue that only the resources and budget of Red Bull Racing counts and they can consider Red Bull technology outside the agreement. It is obviously a one sided interpretation, but nobody has sued them in court which would have been possible for the other teams. The current RRA simply isn't a well defined contract when it comes to the verification and sanctions. One would probably waste ones time going legal about it.

I for one hope they clamp down massively on aero in 2014, so that the laws of diminished returns would mean even a god like aero concept would only make a few tenths difference.

That certainly is one hope Ferrari and Mercedes will have but I think it will not happen. Initially aerodynamics will be very important because the whole car will have to be re packaged for the different sized V6, the turbo and the inter cooling. I have a funny feeling that it will not be Mercedes and Ferrari who will make the best job of it. One possible candidate for getting it right must be Adrian Newey. He typically shines when there is a regulation revolution and not an evolution. He usually delivers the neatest packaging in the whole business.
Later there may be de emphasising of aerodynamics. At least we will see a reduction of the downforce. Blown diffusors will be a thing of the past because the gas mass flow in corners will be greatly reduced. They probably do not even need to legislate that. I very much hope that there will be a sensible amount of ongoing power train development and some competitive advantages from this work. We would be cheated of some wonderful entertainment factor otherwise. But I have good hope in that regard because the FiA seem to be keen to limit development cost on both chassis and engine to bring things back into a balance.

[FoxHound]

What's the point in Red Bull bleating about engines when they aren't even in FOTA, who themselves try to operate within the RRA remit.

I don't really see the logic in your post.

Do Red Bull show accounts for expenditure as the other teams have done in the past?
Will Red Bull's expenditure encompass that of their engine partner, Renault?

I would love to see who was behind the EBD maps, ignition retardation and various other Red Bull specific innovations/issues relating to the engine. All these costs a load of cash, as Mercedes and Ferrari powered teams have seen.
Red Bull may be plying Renault chatillon with money to get them ever better ponies.....just a bit of speculation there.

And the RRA was all about a gliding scale budget to help the big teams shrink more gently, and to eliminate rising costs. So Mercedes and Ferrari spending 1 billion plus on a frozen engine formula would be total idiocy. We have seen since the freeze, that engine departments have shrunk by over 40/50%.
Where has aero followed any such route? If tommorow teams where forced to cut Aero staff by 40/50%, Red Bull would turn up the bleating to 11.

The point is, and where my logic lies, if Aero where to have been frozen at the start of this year, where would Red Bull be now? They could not use their vast resources to have clawed back their quite evident deficit. They spent their way out of trouble with so many changes, one can only admire the resource.... If engines are regulated financially any more than they already are, Red Bull may as well be given the WDC/WCC in March, because then what is happening is their strengths have been "frozen" in.

[WhiteBlue]

...The point is, and where my logic lies, if Aero where to have been frozen at the start of this year, where would Red Bull be now? They could not use their vast resources to have clawed back their quite evident deficit. They spent their way out of trouble with so many changes, one can only admire the resource.

We do not know what each team spend this year but I doubt that Red Bull spend more than Ferrari or Mercedes. They seem to be a bit more efficient though.

If engines are regulated financially any more than they already are, Red Bull may as well be given the WDC/WCC in March, because then what is happening is their strengths have been "frozen" in.

I think you are going a bit "over the top" here. I think that Red Bull's position to ask for engine resource restrictions is very sensible. The FiA have already said that they support robust and verifiable restrictions on both chassis and engines from 2014. I trust that the balance of the two fields of expenditure will be fairly matched. At least that is my expectation if the process is overseen by the FiA. Todt has said often enough that he wants more manufacturers to join F1 and that he will speak to them with a view to enter F1. He will do his best to get a fair balance between aero and engine development in order to make the series attractive for fans and manufacturers alike. Todt is not as blind as Ecclestone who is only interested in the money manufacturers can bring. He also values their technical contribution and their input on the mobility activity of the federation.

[hollus]

From F1fanatic, quoting from Autosport:

Horner’s blueprint for F1′s future (Subscription required)

Christian Horner: “Well if you look at the way the English accounts are presented, you’re looking at the gross turnover of each entity, whether it be Red Bull Technology or Red Bull Racing. Within the RRA we’ve complied fully with the RRA within Red Bull Racing, which is the entrant to the Formula 1 World Championship. Red Bull Technology is a supplier to Red Bull Racing…”

Had we seen this before? I don't want to jump to conclusions without reading the whole thing. Has anyone read it? Does it say what this snippet seems to imply?

[marcush.]

From F1fanatic, quoting from Autosport:

Horner’s blueprint for F1′s future (Subscription required)

Christian Horner: “Well if you look at the way the English accounts are presented, you’re looking at the gross turnover of each entity, whether it be Red Bull Technology or Red Bull Racing. Within the RRA we’ve complied fully with the RRA within Red Bull Racing, which is the entrant to the Formula 1 World Championship. Red Bull Technology is a supplier to Red Bull Racing…”

Had we seen this before? I don't want to jump to conclusions without reading the whole thing. Has anyone read it? Does it say what this snippet seems to imply?

creative accounting at its best..long live RRA! Horner is lucky the earth usually not swallows this kind of horsetraders after they finished their speech...

[FoxHound]

Well it's no wonder other teams are peeved...

[FoxHound]

@whiteblue

You still don't see the flaw in your argument. Red bull don't even pay for engines, engines frozen under FIA rules.

If we flipped the argument around, it would probably make more sense to you.

Imagine in an alternate world aero was frozen with no real possibilities for development. Engine makers could develop within a set remit.
Engine makers dominate the sport for 3 years, with dubious aspirations of being committed to cutting costs, with a sister company supplying it parts etc outside of the RRA remit.
Then the engine makers turn round one day and so "no, there is not enough policing of aero budgets" and we won't sign until something is done about it."

It's ridiculous. Politicking at its most basic, crude form. Red bull are looking for legislation to consolidate their powerful postion, any sentiments contrary I would gladly like to hear.

[WhiteBlue]

@whiteblue
You still don't see the flaw in your argument. Red bull don't even pay for engines, engines frozen under FIA rules.

There is no flaw. It is the common practise in F1's meritocracy that the top teams do not pay for engines. McLaren did not and the Ferrari racing department did not either. When Benetton was a top team they did never pay. And you cannot stop that in the future to happen. The only solution to have a good balance between aero and mechanical developments is to attract more manufacturers and impose development cost restrictions on chassis and power train developments.

It is hippocracy to search for the splinter in Red Bull's eye and not realize that the other top teams are also jockeying and politicking for loop holes that would allow them to gain competitive advantages. It is the nature of successful teams to exploit all contractual and regulatory weaknesses. You must be blind if you think it only applies to Red Bull.

The more important is it that the fans can rely on the FiA and the team majority to establish a fair system of restrictions
and police it appropriately.

[FoxHound]

So what you are saying effectively then, is that Red Bulls demands are reasonable, and the FIA have a fantastic record of ensuring a level playing field.

Nothing could be further from the truth WB.

You automatically, or conveniently forget a very glaring point. When Red Bull say they have a lower budget than either Ferrari, or Mercedes, they are including engines and the costs involved with running an engine factory.
Surely then, Renaults overall costs should be included in Red bull racing and red bull technologies budget? It would be astronomical!
Fact is, no one knows what the black ops red bull technologies actually provide the racing team, other than it supplies the outfit. It's this blatant sort of action that has the rest of the grid bar sister team Torro Rosso in agreement.

There is unison in the grid, only red bull stand in the way.

[WhiteBlue]

Nice rhetoric Foxhound but not helpful in the debate about cost control. Nobody here knows details about the past spending records of the teams under any of the applicable agreements. So why should we be judgemental about particular teams. It only serves to add fanboi ying yang to this thread. I'm not interested to partissipate.

The point of this thread - as I understand it - is finding hard facts about the cost control debate and discussing the proper way forward. So do you think there should be unrestricted spending on power train development? I'm not sure you are advocating such a policy? The consequences would be unwelcome to most stake holders in F1. Neither fans nor the teams nor the manufacturers would profit eventually by a new cost race. Same is true for unlimited spending on aero. Both need to be controlled by proper rules with independant verification and robust sanctions.

[FoxHound]

WB
Look at how things stand at present. Teams can buy engines for around 4million a year. What is the budget of a a mid table team like Sauber or Williams? 100 million?
So Sauber can go out and get a competitive engine for around 4 percent of its total budget of the season, and the rest is spent on what exactly? I bet you Aero cost 5 times more than the engines, at the very least.

So where is there an issue? engines? Of course not.

I'm not trying to be obtuse, there is a real issue here. Which is why the FIA are trying to control the RRA for 2013....Red Bull want nothing to do with that.
The fact they have 2 entities (RB racing, RB tech), and rather childishly point to manufacturer teams having 2 entities is pure and utter BS.
By that reasoning Red Bull have 3 entities....RB racing, RB tech and Renault. Each one of these entities has a huge associated cost, do you not agree WB?
So why then do Red Bull feel only one of these entities(Red Bull Racing) should be subject to an RRA, and using Mercedes as an example, that Mercedes GP, Mercedes HPE and Daimler should all be included in an RRA?
Please answer me that, and if the answer is anywhere near logical to me, I'll buy you a bottle of whisky.