FIA introduces £30m budget cap

[WhiteBlue]

Funny this WB, how you continue to exclude BMW from your list of F1's "big spenders"?

TOUCHE!

Does someone see the world of F1 through blue tinted glasses?

They have consistently reduced their spending since they left Williams year on year and are together with Renault the most outspoken automotive team pushing for cost reduction. They also follow a policy of spreading their spending across several foemulae and series (DTM, Formula BMW). I believe they will not stand in the way of cutting budgets substantially.

[xpensive]

I wonder how long you could run the Hinwil facilities on 30 MEUR, two months perhaps?

[WhiteBlue]

That would be likely. Hinwil and Munich F1 ops are tailored to current regs.

[Conceptual]

Does anyone feel that we are going to see the manufacturers (BMW, Renault, Mercedes, Toyota, and possibly Ferrari) end up ONLY supplying powertrains to an entire grid of privateers?

Having 15 privateer teams using homologated powertrains would be great in my book. Costs go way down to the 30-65M range, manufacturers ONLY concern themselves with engines/gearboxed/KERS to keep their costs down, and the privateer teams then develop and build their own chassis.

If Formula 1 does not go this route, it may be interesting to see if anyone else goes that route.

That would be a series that I would follow!

[xpensive]

Interesting, when I believe that I suggested a similar scenario on my thread "Melbourne grid 2010?", with Renault, Toyota and BMW leaving after this season.

[donskar]

conceptual wrote:

Does anyone feel that we are going to see the manufacturers (BMW, Renault, Mercedes, Toyota, and possibly Ferrari) end up ONLY supplying powertrains to an entire grid of privateers?

Can't see it -- at least not from Ferrari. Racing is central to them -- and a key marketing tool.

For the others, it might be just a simple question: will their investment yield sufficient ROI in terms of marketing?

There's also a large potential flaw in your scenario: it wouldn't be long before Mercedes (just as an example) began giving a discount to a favored customer to help ensure success; then comes technical assistance; then money under the table . . . You can fill out the rest of the progression.

How keep "privateers" private?

[Conceptual]

conceptual wrote:

Does anyone feel that we are going to see the manufacturers (BMW, Renault, Mercedes, Toyota, and possibly Ferrari) end up ONLY supplying powertrains to an entire grid of privateers?

Can't see it -- at least not from Ferrari. Racing is central to them -- and a key marketing tool.

For the others, it might be just a simple question: will their investment yield sufficient ROI in terms of marketing?

There's also a large potential flaw in your scenario: it wouldn't be long before Mercedes (just as an example) began giving a discount to a favored customer to help ensure success; then comes technical assistance; then money under the table . . . You can fill out the rest of the progression.

How keep "privateers" private?

Well, I can see a few things here...

If the manufacturers went to powertrain only, the fixed cost of engines would remain the same, but they would be able to develop the technology again, like pushing KERS to the max.

Ferrari can go racing an aweful lot, since it would probably end up supporting 5 privateer teams. Instead of the $700M that they spend to put their car ahead of all others, they would mathmatically have a better chance of success with 10 engines in each Grand Prix. I'm sure that some teams might find certain favor amongst the powertrain manufacturers (winning DOES tend to endear a supplier), but on the whole, with a fixed budget, Ferrari would be better served by branding on 10 cars (more TV exposure), increase their chances of winning, and not ever feel the embarassment of being beaten by a junior team (Monza 2008). And if all else fails, they can blame losing on the privateer, because their engine would only be part of the total package, where if the Ferrari team loses, or puts on a circus (Singapore 2008), they are rightfully picked upon by the media, and that is NOT good for PR.

I brought this up a long time ago, by way of saying that the manufacturers make the rolling chassis, and the privateers buy them, and then develop the aero themselves. It was laughed at quite extensively, but for a team to operate for $30M, they may end up doing just that!

[DaveKillens]

I'm sure many are aware that Ferrari provides the powerplant for all the A1GP cars. How many others didn't know that? How many casual race fans are aware of this fact? Most likely a very small percentage. So just where is great publicity and positive fall-out from this situation?
I hold forth this example to display that being an engine provider doesn't make people's tongues wag.

[alelanza]

IIRC a1gp transmissions have a logo that somewhere says 'powered by ferrari' or such when they go to a commercial break? also i think the presenters mention it quite often. That being said don't take it for granted as i've been unable to bring myself to watch it for more than 10 min.

Regarding the budget, they should make it 300 mill but bring Porsche along and teach the teams how to make a buck or two on the stock market, it's certainly more profitable than the sport cars market for them!!!

[donskar]

conceptual, I think I agree with your sentiment (if I understand it correctly): lote of privateer teams would bring back some of the flavor of the 60s and 70s -- more color, more variety, more characters. I LIKE that, but I'm afraid DaveKillens is right: just supplying the engine/powertrain would have a questionable cost/benefit ratio to the manufacturers. Certainly Ferrari seems to believe they MUST race to support their commercial success (I think they're wrong, but . . .) In terms of marketing value, the winning CAR is orders of magnitude more important than the winning ENGINE.

I dislike bringing marketing into F1 discussions, but the two are now inextricably interwoven. And I hate that.

Surely someone else besides ME must remember when F1 cars were painted in their national colors and the only stickers (small) were Firestone, Ferodo, Shell, Mobil, etc.????

[WhiteBlue]

http://www.autosport.com/news/report.php/id/74704

So it looks like the issue is progressing. Some compromise has already happened with the driver salaries, motor homes and marketing expenses being excluded.

Will that be enough to come to a solution? As teams like Lola are comming on board it seems that people in the industry beleive that the FIA plans will actually happen.

[Giblet]

A company like Toyota could easily talk about F1 derived technology in their cars, but only run engines.

That is how Honda did it for years. They made it look like in their ad campaign that they were an F1 presence, and the layman had no idea they only supplied engines.

it would be pretty easy to convince a board of directors to save 300-500 million a year and keep a marketable presence in the sport.

[Conceptual]

A company like Toyota could easily talk about F1 derived technology in their cars, but only run engines.

That is how Honda did it for years. They made it look like in their ad campaign that they were an F1 presence, and the layman had no idea they only supplied engines.

it would be pretty easy to convince a board of directors to save 300-500 million a year and keep a marketable presence in the sport.

ESPECIALLY since Honda's success as an engine supplier is inversely proportional to their failure as a team owner.

I think that the powertrain idea for the manufacturers would not be so bad, and Ferrari could supply the Team Schumacher to get their marketing PR. Besides, doesn't Ferrari inhabit a few other major series'? Having a Circus of an F1 team doesn't seem like it is accomplishing what some say they require...

There is going to be underhanded stuff going on with ANY budget cap, but I think that it would be incredibly obvious if one team was 4 seconds a lap ahead of all others, and bringing large updates to every race. The tedium of balancing the underhandedness against the amount of performance advantage would become more irritating than it is worth I think.

As long as the cars dont start to look like "The Transformers" while entering a heavy braking zone, I think the $50MEU/Yr privateer teams buying $15MEU Powertrains (engine, gearbox, KERS) and using the other $35MEU on an "anything goes" racecar would be a wonderful way to get 50 cars into pre-qualifying every other weekend. And the manufacturers would actually MAKE MONEY doing it!

Maybe there is a series like this already that I am unaware of?

[vall]

instead of that silly 2 level F1, why don't they press the greedy MrE to give the teams more money and come up with a resonable budged cap for everyone? Something between 70 and 100 MEu/yr should be enough to ensure good racing?

[Chaparral]

http://www.autosport.com/news/report.php/id/74704

So it looks like the issue is progressing. Some compromise has already happened with the driver salaries, motor homes and marketing expenses being excluded.

Will that be enough to come to a solution? As teams like Lola are comming on board it seems that people in the industry beleive that the FIA plans will actually happen.

This from that link WB.

The FIA has also decided that race and test driver salaries should no longer be included in the budget cap figure, a change from the plan announced last month. Expenditure on marketing, hospitality and motorhomes is also excluded.

Thats not a compromise WB - in the case of Ferrari/Renault/McLacca etal that is probably in the vicinity of $80 million USD excluded from the cap PA - thats not even clever. Guess who are going to show huge increases in the marketing spend the hospitality spend the drivers salaries - how many ways do you want to hide expenditure in other capped areas - christ we used to do it all the time and even auditors dont pick it up. I believe Moley will introduce this 2 tiered system but I think he's opening Pandora's Box.