The FIA recently announced a raft of rule changes for the 2008 Formula One season, mostly met with chortles of laughter and quizzical looks around the world. In order to continue his dumbing down of the sport, and to add to the grey that is known as the rule book, FIA president Max Mosley stated that wind tunnel usage would be now be limited and team personnel attending the races would be capped to name just two of the cost-cutting measures. On the face of it Mosley’s ideas aren’t ridiculous and they would see costs reduced for the participants, but quite how the FIA intend to police these regulations is anybodies guess.
Trying offer some sort of reasoned voice though, Honda have stepped forward with something a little more sensible. Now, I should point out that I disagree with limiting the talents of the staff in Formula One, and therefore see no need the cap anything, but my view isn’t going to stop Mosley in his path and make him reconsider. So, what have Honda suggested?
Quite simply, they have said that if you want to reduce costs for Formula One teams, thus making the playing field a little more level and allow more players to join, just limit the total money the teams can spend during the year.
Ross [Brawn] and I both think that an overall budget cap is something that should be seriously investigated. What we see at the moment, if you look at the accounts of any of the UK F1 teams, is that the costs keep going up.
So far what we have been successfully doing is moving money from one area of the team to another. Money is certainly moved from engines to aerodynamics, because that is the next best area of performance advantage.
We support a lot of the proposals on the aero restrictions, but the fear is that that money will merely be diverted elsewhere. It will go to driver salaries or engineer salaries, or some other part of the car, but will not necessarily reduce the total bill that a team has to pay.
So rather than chasing our tails, we think we should be considering an overall budget cap. Although it will be difficult to monitor, we think it can be achieved. Nick Fry.
I like the honesty of Fry’s statement, saying that all the engine freeze has done is forced the teams to spend more on aerodynamic development and less on the power plants. The total spend is likely to be the same, if not more as Fry hinted at. Essentially, Honda’s F1 CEO has just slapped Mosley down, proving (from Honda’s point of view at least) that the teams are not saving money; they’re actually spending more.
We do support sensible efficiencies on cost and cost restraint. The difficult thing is applying it so it doesn’t advantage or disadvantage one team over another, and that’s the thing we need to focus on.
The concept of a budget cap a couple of years ago was thought to be fairly ludicrous. But if you look at the weaknesses of the counter-arguments and alternative solutions, you wonder whether budget-capping isn’t the one you ought to find a solution for. It gives everyone the opportunity they want to try and achieve the objective. Ross Brawn.
Brawn hit the nail on the head when he states that the cost-cutting rules need to be fair through the grid, ensuring that they don’t “advantage or disadvantage one team over another”. Unfortunately, Ross is about to see Formula One from a non-Ferrari standpoint. This at least should be interesting to watch next year.
The teams are also businesses, and like other limited companies, they need they’re accounts audited and in most circumstances, are made available for viewing. Combined with legislation within the rules, policing the costs spent by the squads would be far easier to manage than an FIA official standing guard at the wind tunnel. Which, by the way, adds to the costs of the governing body which would probably be passed down to the teams at some point.
I could pick holes in the aerodynamic argument. How do you police CFD? You have a processor and a number of people working at their workstations in the CFD department, but if you’ve got somebody off-site quite legitimately developing the code and then they put that enhanced code into your system, are they part of your CFD process or not?
I’m not saying a budget cap is the easiest thing to apply, but is it any more difficult than the other things we’re going to do? […] How fast can you make this car go for 100 million a year? How efficient can you be? And it’s up to the teams to decide whether they spend 50 million on the driver and 50 million on the car; or one million on the driver and 99 million on the car. It would be fascinating to have that challenge. Ross Brawn.
I like having Ross back in F1. And facing the challenge of reviving Honda away from the comforts of Maranello, the banana-munching brain-box can, has to think radically, perhaps even upsetting the establishment in the process. Like I said, Ross is going to make for some enthralling viewing in 2008.
But back to budget caps. Would it really work? Like all things in business, it isn’t rock-solid. Of course some teams would fudge the numbers, move and hide money, but is it any worse than trying to do some of the things the FIA are currently putting forward? It would actually promote innovation, developing systems without the comfort of the limitless money source, and it would definitely level out the grid a little.
As always, your views are more than welcome, so let me know what you think in the comments. Has Ross gone bananas, or does the green-fingered team principal speak as wisely as the green-bodied Yoda? Erm, budget caps: good or bad!?