Poll: Will a budget cap work?
18 May 2008 by Keith Collantine
Do you think a budget cap can work in F1?
- Don’t know (10%, 23 Votes)
- No (66%, 148 Votes)
- Yes (24%, 53 Votes)
Total Voters: 224
Loading …Max Mosley has proposed limiting the amount each team can spend per year to a little as €110m. He wants to see budgets limited to €175m next year, €140m in 2010 and €110m in 2011.
Do you think these targets are realistic? Will the FIA be able to police it? What should they do if someone over-spends?
I think it is a good idea, as spending as spiralling out of control at the moment, and a budget cap may help independent teams return to the grid in the future.
As for enforcing this rule, I’m not sure how they would be able to police it. And what expenditure falls under the ruling? Just R&D? Or does it cover manufacture as well? The drivers’ salaries too? Does the payroll of all the staff fall under the ruling?
A budget cap is a good idea in principle. Policing it would be another matter, but worth trying. The real problem with it is that they are not making it all-encompassing. Many areas are exempt from the budget cap (including, unsurprisingly, the wages of the big boss men….).
I would like to see everything have to be accounted for - every lap of testing, every hour of windtunnel running, everything. Do you go for a superstar designer like Newey, a superstar driver like Raikkonen, or do you test as much as you want and run the windtunnel as much as you want (within the confines of the budget - these things would be given a financial value), or do you spend it all developing the engine or what? Give the teams more freedom in the regs with the budget cap there for them all to work within.
Never happen though.
This is not going to work. What would stop a company giving a team products that they would ordinarily have to buy? Flights, hospitailty, equipment, expertise etc? If you were to outlaw gifts, who could say what an appropriate cost should be?
It’ll be impossible to enforce and all the teams will spend far too much time and money trying to find ways around it.
And all non-Ferrari fans will automatically assume Ferrari are getting favourable treatment…
F1 would hardly be the first sporting body with a salary cap. It would be difficult to enforce, but not impossible. The accounting and oversight would be expensive, but it’s probably the only way we’ll ever see the return of privateers and I think it’s a much better solution than, say spec engines or spec chassis.
It works in many other sports, i dont see why they could not police it here.
Which other sports have it?
NHL Ice Hockey. Not sure what other North American sports have it, I suspect the NBA but someone else will have to confirm that. The IPL also has it but then that’s only for this year since as of next year they can spend what they want!
Budget caps won’t work there is too much “creative accounting” that will go on. Also there is the issue surrounding non-F1 development, such as Ferrari building a chassis for GP2 how would one determine how much base development work is being done for GP2 that will ultimately end up in F1? Detuning engines or make a chassis slower is easy.
The main reason why it works in North American sports because you pay a player and that’s it. Here you have a team manufacturing for F1, and as mentioned above some of them do more than F1 and so is it ethically fair for them to forcefully share their intellectual property and blueprint designs for the development of equipment for other racing series’?
And to add that it will also work in the Cart series because they all are using customer chassis (Panoz) and spec engines (Cosworth?).
I believe a budget cap is worth the risk, as the sport is extremely unbalanced with only a few teams that can seriously challenge for championships.
Putting it into effect however is going to be one of the biggest challenges F1 has seen. For instance, wasn’t switching from V10 engines to V8’s supposed to be about cutting costs?
To make the cars more equal engine wise perhaps? All it did was increase the amount of aero devices used on the cars to increase performance.
Experience shows that budget capping in F1 is like trying to plug a dyke with your index finger. You stop one leak, another ten spring up. The tech people will find a loophole in the rules, something they can exploit, in order to gain an advantage.
With, in most cases, the mostly highly skilled working for the biggest teams, how can we as a sport benefit?
The one crumb of comfort is that the powers at be atleast except that something needs to be done, and quickly, and that past efforts to cut costs have so far not been successfull. Otherwise, other teams will end up in the same situation as Super Aguri, and that is unexceptable.
A budget cap might go a long way towards competitive equality, but it would stymie development. I’m more for budget equality: Teams would get their operating money from the F-1 organization. Prize money would be doled out separately, of course, and couldn’t be used for development or operating expenses.
The NFL use salry capping, and you rarley see 1 team dominate that sport. i think if they can find a way too police so that its fair then it will defintiley help get more czrs on the grid. all depends how effectivley it can be policed.
“A budget cap might go a long way towards competitive equality, but it would stymie development”
The FIA are doing their best to do that anyway, budget cap or not.
We are talking about North American sports- just my ball game!! On first hearing the idea, I think it would do a great deal to even up the playing field in F1 and allow the small teams to at least survivie and compete on a more even basis. Here in the US, the NFL dose use a cap to great effect. If you want some examples, just look at some of the divisions in the league. The NFC East contains four teams in big markets with big budgets- Dallas, Philly, Washington, and my Super Bowl Champion New York Giants. Those teams always draw big crowds and top free agents, so they are always in a position to compete. That division produced three playoff squads last season, the maximum number possible in the NFL playoffs.
On the other hand, look at the AFC South. Four small market teams in Jacksonville, Nashville, Houston and Indianapolis- Yes, Indianapolis!!!!! That division also produced three playoff teams last year, and even the last-placed team (Houston) finished with an 8-8 record. Yet they are all in small markets, and would most likley never be that competitive if not for the salary cap.
On the other side of the coin is Major League Baseball, where small market teams in regions such as the Midwesttern US struggle to compete with the big clubs in New York, Boston and elsewhere. As a Yankees fan, I don’t mind this imbalance, but lack of a cap dose make it a bit unfair for the small market clubs.
If you apply this to F1, I believe the concept can work, but it will take some clear-cut rules and policies in order for that to happen. In the NFL, there is no research and development of a technical device such as a car- it’s just about coaching players. F1 is a different animal, but with some work, it’s possible.
And on a last note….Green Flag, if you are reading this, her eis proof-positive that I do support of of Max’s ideas!!
If anyone makes it this far down the page, anyone that voted yes or no knows that as certain as sunrises, taxes, death, and lying politicians, that the teams of F1 will cook their books and cheat the budget cap in some way.
And I don’t mean that some of them will resort to crooked accounting, I don’t mean many of them will resort to it, I mean every team, even Toro Rosso and especially Force India, will find some kind of way to spend more money than the cap should allow, be it through individuals “donating” equipment and parts or by declaring the budget in the form of a devalued currency.
I don’t think a direct budget cap is the answer . Instead , limits have to be placed on components which F1 teams are allowed to explore , and to an extent that has already been happening . The engine freeze , is a good example. By not allowing teams to develop engines further , for a period of time , obviously must have a big cost saving impact on it’s own , hence benefit the smaller teams as well. I think an even bigger saving will be achieved with the future of the aero dynamic “devices” being limited , from 2009 if I’m not mistaken. Wind tunnell testing , which seems to be a 24/7 thing with the bigger teams , and a very costly one too , should temporarily end , and also help the smaller teams “catch-up” in that respect. The only possible dilema the FIA face with above , is if F1 technology should ever fall behind any other form of motorsport . But I’m sure they are all too well aware thereof.
“The NFL use salary capping, and you rareley see 1 team dominate that sport.”
The main reason is that the weakest teams get first pick of the upcoming players. A rule designed to prevent rich teams becoming all-powerful.
Come to think of it, that’s not a bad rule for F1: All drivers wishing to enter the sport must register, and weakest teams get first pick of new drivers. All new drivers get the same salary in year one (paid by B. Ecclestone), after that it’s whatever they can negotiate.
You do make a good point Martin, and perhaps such a rule would have an impact if you could adapt it to F1. However, such a policy would be very difficult, if not impossible, to mold into an effective model for F1. Yes, the NFL draft order is based on the finish of the teams in the preceding season, so the last-place finisher dose get the top pick, and so on. However, there are no restrictions on signing free-agent players who have already played in the league, and that’s where the salary cap comes into play- it prevents the big teams from stockpiling high-priced free agent talent.
In F1, the difference is teams only have two race drivers, plus a tester or two. In the NFL, teams draft new players every year, but some F1 teams don’t have driver turnover for several years. My point is that if someone like Alonso wants to drive for a different team in the future, it’s going to be hard to design a fair system to give the likes of Force India and Williams a better shot at signing him than big-money teams like Red Bull or Ferrari.