The possible dangers from the budget cap

[DiogoBrand]

https://www.racefans.net/2019/03/25/ana ... ize-money/
Analysing F1 prize money for 2021

Good reminder. I tend to think a lot about a budget limit to make the field more competitive, but the prize distribution is also really important. The fact that Ferrari earns double what everyone but Mercedes and Red Bull do just "because they're Ferrari" is just stupid. Proper prize distribution may be more effective and present fewer loopholes than a budget cap in order to keep smaller teams in the sport while being at least a bit competitive.

3. Count out Red Bull please, this B-team problem has been infused solely through Haas & Ferrari cooperation model.
Torro Rosso had done it for the initial (build-up) year, taking an old chassis. but Red Bull let let Torro Rosso be an independent entity, as they knew it was a grey area in the rules they didn't want to go into.
Torro Rosso has been used (clearly) as a 'drivers academy' for Red Bull.
This approach set an example and resulted in the current influx of young drivers. We have to thank Red Bull for this development.
Secondly Torro Rosso is known to come up with numerous inventive design elements copied by other teams.

So only after the Haas/Ferrari cooperation, did Torro Rosso follow suit in 2019, but even now their design department have a different approach is Red Bull. For example the front wing design....

Didn't Toro Rosso have exactly the same car as Red Bull up until 2010 or 2011?

I have never understood the budget cap argument, the top teams are approaching half a billion a year each. No way can the FIA keep track of all The money moving around, not to mention all the possible ways you can work around a budget cap legally.

I find this new need for the entire grid to have a chance of winning rather odd to begin with since F1 has never been that way. If they want the grid to be competitive, then as others have said keep the rules stable and stop changing them. Also stop letting Pirelli change the tires ever year as well.

I don't think the entire grid needs to have a chance of winning, if you want that you should watch Formula Indy, and even there I believe the bigger teams have a large advantage.

The goal here would just be to keep smaller teams in the sport, rather than leading a team into bankrupcy every few years, so perhaps we wouldn't have trouble keeping 10 teams in the sport, hopefully even more than that, while letting everyone race instead of having that one team whose big achievement is to make it past the 107% rule.

[dans79]

The goal here would just be to keep smaller teams in the sport, rather than leading a team into bankrupcy every few years, so perhaps we wouldn't have trouble keeping 10 teams in the sport, hopefully even more than that, while letting everyone race instead of having that one team whose big achievement is to make it past the 107% rule.

The easiest way to fix that would be to get rid of exponentially decreasing payout. Why they are at it, they could due the same thing to the wdc & wcc points as well.

If payout and points are given out in a linearly decreasing fashion, budgets will all but self regulate.

look at lats years payout.
https://www.racefans.net/2018/08/01/for ... -revealed/

[Phil]

People arguing in here about dangers of a budget cap should put the arguments into two columns; Short-term benefits/drawbacks and long-term sustainability.

With Renault as a big player (a manufacturer) already talking about the 'danger' of B-teams (specifically the Haas model) and their level of commitment, one should question how long F1 is sustainable without a budget cap if the sport is effectively controlled by the two biggest players and the rest simply can not compete and are mere TV gap fillers in a typical race.

[dans79]

People arguing in here about dangers of a budget cap should put the arguments into two columns; Short-term benefits/drawbacks and long-term sustainability.

With Renault as a big player (a manufacturer) already talking about the 'danger' of B-teams (specifically the Haas model) and their level of commitment, one should question how long F1 is sustainable without a budget cap if the sport is effectively controlled by the two biggest players and the rest simply can not compete and are mere TV gap fillers in a typical race.

Reanult always complains, even when they are winning.

[Phil]

That doesn't mean all complaints are without merit. I suggest you consider what they are complaining about and what it means for the sport as a whole and long-term. Then exchange Renault with McLaren and ask yourself if they are in any better situation. Once you have that, think about how and what F1 will look like without these players.

[DiogoBrand]

The goal here would just be to keep smaller teams in the sport, rather than leading a team into bankrupcy every few years, so perhaps we wouldn't have trouble keeping 10 teams in the sport, hopefully even more than that, while letting everyone race instead of having that one team whose big achievement is to make it past the 107% rule.

The easiest way to fix that would be to get rid of exponentially decreasing payout. Why they are at it, they could due the same thing to the wdc & wcc points as well.

If payout and points are given out in a linearly decreasing fashion, budgets will all but self regulate.

look at lats years payout.
https://www.racefans.net/2018/08/01/for ... -revealed/

I talked about the exact same thing on the post you quoted.
I don't agree about the points, though. I think the gap between a race win and second place should always be bigger than the one from 2nd to 3rd, for example. I hope it stays more or less the way it is.

[Maplesoup]

I think budget caps are definitely needed. The trick will be making sure that every part produced has its life documented from design to manufacture.

I think they should also limit the number of parts that vary in their aero. For instance Mercedes can bring 4 different front wings to a race where as the smaller teams can only bring 2.

Cfd software should be standardized too the difference was exposed when doing the testing for the 2019 outwash changes. The top teams are produce twice the amount of data than smaller ones.

Also I think limiting the amount of energy that can be recovered and deployed through the MGU H could lower the costs on the engine side of things as well.

FOM need to get though and have big penalties for teams that break the rules preferably punishing them by reducing points gained in that season or disqualifying them from races were illegally produced parts have been used. Financial punishment won't work because the teams will just judge the fine to be worth the extra performance.

I don't think the b team issue will be as big a problem as they think. Teams already have to develop their own chassis and aero etc so using the b teams resources to produce performance for another team is already illegal.

[FW17]

Why are fans concerned about implementation of budget cap when the teams and FIA are not.

Why talk of fraud ? anybody and everyone can circumvent rules and regulations at anytime, but that is not what sportsperson do.

[turbof1]

Another danger: The budget cap could lead to salaries of young graduates in fluid dynamics plummeting. Staff starting to work for a F1 team already are kind of poorly paid, and with the budget cap reducing demand for employees on an already saturated work market, salaries are bound to drop, unless the cap enforces a minimum wage.

[hecan]

Just my opinion. People are freaked out with budget caps when this is the only thing that will help the sport to not disappear in the next 5 years. No one can pay 500 millions a year for a price, maybe, of 120 millions or less and call that sustainable racing, and without cars there is no competition. I really don't want to see a parade of Mercedes and Ferrari cars, but that is where the sport is headed without a cap.

[DiogoBrand]

You people talk as if I said "The budget cap is bad, kill it with fire!".

All I said is, I believe the budget cap is good, I just think they should consider every possible outcome before implementing it, because once it's there, it will be almost impossible to go back in the near future.

Changing regulations without thinking them through is why F1 regulations are constantly backfiring, just a few examples to name a few:
Lower the noses for 2014 because the stepped noses are ugly, just to have half the teams adding penises to the front of their cars.
Implement a token system for power units to lower costs, only to make Mercedes impossible to catch, while making no difference at all to development costs.
Ban all driver aids for 1994 to improve the show, only to have one of the greatest drivers in history killed.
Not to mention front wings that are made wider, then narrower, then wider again every few years for multiple reasons, or rear wings that are made lower, then taller, then lower again, then a bit taller, every time thinking it's gonna make the cars easier to follow.
And so on and so on.

Not thinking things through and believing there will be a single regulation change that makes the sport a whole lot better is why F1 regulations are doing the opposite of what they're supposed to all the time.

[erikejw]

People arguing in here about dangers of a budget cap should put the arguments into two columns; Short-term benefits/drawbacks and long-term sustainability.

With Renault as a big player (a manufacturer) already talking about the 'danger' of B-teams (specifically the Haas model) and their level of commitment, one should question how long F1 is sustainable without a budget cap if the sport is effectively controlled by the two biggest players and the rest simply can not compete and are mere TV gap fillers in a typical race.

There are dominating teams/individuals in most sports, noone is suggesting they'd be shot in one of the legs.

Why would a new minimum budget team like HRT be awarded the same money as Ferrari/Mercedes or any frontrunning team?

Thats the reason Usain Bolt gets insane sponsor contracts, noone claims average Joe should get the same deals.

Just because they showed up?

They get paid because they are worth it, Mercedes invest 500M$ because its worth it for them, Renault comolains about B-teams because they are threatened of them.

There are hundreds of lower formula series to compete in if they cannot cut the big cake, I dont have anything for crybabies that feel bad about themselves, just go somewhete else if you cant play with the big boys.

With that said F1 teams needs to be healthy longtime, get a big enough share to give them stability.

The F1 teams should really own half of the cake, as other sports own their games. Then no team would have any problem. F1 is sold for borrowed money, interest eats most of the gain.

Ferrari/Merc/Renault/RB can easily restart F1 2.0 if they want, under their own umbrella, they have the resources, connections and knowledge. And then invite the other teams and start a healthy serie and be able to pay all teams twice the money of today.

Liberty needs a cost cap, to be able to keep more money for themselves, pay off interest rates on skyhigh loans instead of sharing the income with the teams.

[Mclarensenna]

1 of the big problems with the token system in 2014 was that the teams who got it wrong could not catch up. And if not for removing the token system teams like Honda who got it massively wrong would never have caught up. Even now they are still behind.

Top Teams we saw last year are 2 seconds clear in race pace of say teams like Renault and Mclaren. Generally teams if they do a good job improve their car 1 second per year. That seems what Renault and Mclaren have done and that is after throwing 300 million and an entire year at the car.

So if you lock in a budget cap at say 100 million and the top teams have a 2 second advantage how would a team like Mclaren or Renault ever catch up?
If 300 million and an entire year nets you on average 1 second say.
Then a 100 million cap would even being optimistic gain you half a second per year.

So if the top teams stood still and were banned from developing Mclaren and Renault would need 4 years at least just to catch them due to this massive 2 second advantage already.
But this is impossible as the top teams would develop at the same or similar pace which means it would not be 4 years but most likely never.

It is like locking in the token system with the hybrids. It did not work when mercedes had a massive advantage in 2014
It would have possibly worked in the V8 era in 2013 as all the engines were very equal.

The budget cap from what i can see would never work. Not when the top teams already have a massive built up advantage already which all i can see a budget cap doing is locking that in giving the top teams a further advantage.

[DiogoBrand]

1 of the big problems with the token system in 2014 was that the teams who got it wrong could not catch up. And if not for removing the token system teams like Honda who got it massively wrong would never have caught up. Even now they are still behind.

Top Teams we saw last year are 2 seconds clear in race pace of say teams like Renault and Mclaren. Generally teams if they do a good job improve their car 1 second per year. That seems what Renault and Mclaren have done and that is after throwing 300 million and an entire year at the car.

So if you lock in a budget cap at say 100 million and the top teams have a 2 second advantage how would a team like Mclaren or Renault ever catch up?
If 300 million and an entire year nets you on average 1 second say.
Then a 100 million cap would even being optimistic gain you half a second per year.

So if the top teams stood still and were banned from developing Mclaren and Renault would need 4 years at least just to catch them due to this massive 2 second advantage already.
But this is impossible as the top teams would develop at the same or similar pace which means it would not be 4 years but most likely never.

It is like locking in the token system with the hybrids. It did not work when mercedes had a massive advantage in 2014
It would have possibly worked in the V8 era in 2013 as all the engines were very equal.

The budget cap from what i can see would never work. Not when the top teams already have a massive built up advantage already which all i can see a budget cap doing is locking that in giving the top teams a further advantage.

Exactly what I'm afraid of.

[Jolle]

A possible or certain downside of a budget cap is loss of jobs of course plus a decrease in pay. The amount of staff is a big part of the difference on the grid. If you can decrease pay by 20%, you Han have a fifth more staff which makes you go faster.
Another disadvantage might be that big investors now, Daimler, Philip Morris and RedBull will pour less money into the sport which will decrease the value of F1 and will decrease the value of Liberty.

At the moment the sport is quite healthy. Most of the teams are in good state and those who aren’t have mainly circumstances outside F1 to thank for that (Force India’s former owner and Mclaren’s huge debt because of the automotive investment).

The two teams that are raising this issue the most, Renault to start with, comes from not the ability to produce a good PU. It’s far from proven that a cap will let them succeed. It’s even quite possible that with a cap the gap will increase because Mercedes just is maybe better to build a PU. With a budget cap there is no way to overcome this deficit. And then McLaren. Not many years ago they would be fighting against any involvement. Mclaren over the years or decades, since Ron Dennis took over in 1980 has been fast but far from efficient. A budget cap will hurt them the most.

And then there is the danger that a few people will get very rich short term with all the money that is left over ( if income for teams are bigger then the cap).

Financial restrictions are good when they are done right. Just a “200mln per team” will cost a lot of jobs.