At the moment, F1 is obsessed with costs, but I can’t help feel it’s a little too arbitrary. Take the engine and gearbox rules – to avoid the big teams out-spending everyone else, no-one can use over a certain amount. One of the advantages of a budget cap would be to get rid of that and if your engine failed you’d have to buy a new one out of your limited funds and so the incentive to create a reliable engine would still exist.
The budget cap arguments have been done many a time so I’m not going to go over it. Suffice to say I think it’s a good idea, though the attempt to implement one was handled disastrously by the FIA last year. Any kind of transition must be slow and gradual and I have little faith yet in FOTA’s Resource Restriction Agreement as the teams will use the saved money on something else, like they do now with the testing ban.
Where the NBA comes into this is their use of a budget cap – there is a limit, but teams can go over it (the big teams usually have to because of players’ wage demands). The catch is in going over it they have to pay an amount (I’m not sure of the details) to every team that is under the cap, which they can then spend to nullify (or try to nullify) the big-spenders’ advantage in throwing more money around (which despite the Toyota and Honda debacles usually works in sport, it just doesn’t guarantee you beat everyone and not just a few). The problem is the big teams can usually cover these extra costs in their merchandise and ticket sales, which is why a hard cap will probably be introduced in the near future.
But F1 isn’t the NBA. It attracts more viewers, but I doubt the teams are as rich as the NBA franchises (I don’t know the figures, so I’m just guessing). So the big F1 teams would probably be unable to fully cover the costs of going over the cap by the ridiculous amounts we used to see them spend. And in an F1 grid that is being too influenced by pay-drivers, it would be a way of keeping the smaller teams afloat. Eventually F1 might have to go to a hard cap, but as a transition model it could work very well until the time came.