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[acosmichippo]

So I started a reply in another thread that kind of grew into an off-topic rant, so I figured I'd start a new thread. Apologies if there's an existing thread for this kind of discussion already. I don't recall seeing one.

Anyway, to my actual thoughts. I think it's time for F1 to have a complete Financial Overhaul. We constantly hear about teams wanting to reduce costs, and hiring drivers who page the team to drive instead of vice-versa. We also know most fans are tired of seeing one team completely dominate. So I am wondering why F1 hasn't imposed a team spending cap (for example, at roughly the average of all current team caps).

To me, this would be a huge step in eliminating trends that I think we all agree are detrimental to modern F1:

1) sponsored drivers getting seats over more talented drivers
2) A few (or less) teams dominating the field over the others
3) rising costs

I realize this isn't anything original, but I don't think I've heard an explanation as to why they haven't been implemented in F1. Is it just down to the complexities of policing rules like this? Or is it more likely due to political power of the bigger teams like Ferrari?

I'm not sure how sports across the globe handle this, but in the US, most mainstream pro sports (Baseball is the only exception, I think) have a salary cap to prevent issues just like these. Without it, the big markets like LA or New York would continually dominate, causing everyone else to gradually lose interest.

Could you imagine if teams were limited to the average budget of all teams and drivers were hired on merit? You'd have a top half of the grid in total chaos, and would still leave the back markers in striking distance for the occasional surprise, which (in combination with the revenue sharing of the Concorde Agreement) would allow them to potentially make progress over time, instead of being perpetually stuck at the back.

So... why hasn't this been done in F1? Seems like a no-brainer to me.

[geetface9]

I think it's the political power of big teams like you mentioned. In the articles that quote team principals about such issues, they all tend to believe something needs to be done, but nobody will actually do it because they all can't agree on what is to be done, or they won't do it for reasons of self-preservation and the like even they claim something needs to be done.

From Sky Sports:

http://www1.skysports.com/f1/news/12475/8956151/sky-sports-f1-team-principals-qa-whitmarsh-horner-domenicali-and-boullier

But you had the Formula 1 Teams Association (FOTA).
CH: "It didn't work. It worked in the beginning, but it fell apart because self-interest was too strong amongst competitors.

[acosmichippo]

To be clear, he was talking about FOTA there, not any kind of spending cap.

[CookinFlat6]

There was an informal agreement to cap costs amongst the teams - fota was the team collective

RBR broke ranks

So Horner is right, self interest from one of the teams results in anarchy

[acosmichippo]

There was an informal agreement to cap costs amongst the teams - fota was the team collective

RBR broke ranks

This is the first I've heard of that happening. Have a source on where to read more?

[CookinFlat6]

There was an informal agreement to cap costs amongst the teams - fota was the team collective

RBR broke ranks

This is the first I've heard of that happening. Have a source on where to read more?

http://www.theguardian.com/sport/2011/dec/10/red-bull-christian-horner-formula-one

[1Lemon]

Political power, the teams with more money don't want a spending cap because their doing fine at the front with all the dosh.

We need someone in FOM to just stand up and kick Ferrari/McLaren/Merc and RBR down and say "We're doing a spending cap, so shut it".

But then how would this be enforced? Would it include taxes (Meaning teams might move to countries with far lower tax)? What would be the punishment for exceeding this, a fine seems ironic? How would racing penalties be included?

You could never be 100% sure that teams are following the rules and not just doing some creative accounting.

[CookinFlat6]

Thats why self interests from RBR for example means that such Fota lead initiatives by the teams are doomed to failure. RBR will turn around and break the agreement or not sign it because they feel that the manufacturers will indulge in creative accountancy. So instead of all get together for the common good RBR's self interest means they wont trust the collective.

And Ferrari, ironically a manufacturer, also backed out, presumably because they were concerned about the other manufacturers indulging in creative accountancy, even though the evidence is there that Merc and Honda stuck to self imposed RRas

RBR were the team constantly accused of breaking the RRA as they outspent the rest to win the title, and then surprise, surprise, they decided to quit as 'they felt the manufacturers had an unfair advantage in creative accountancy'

At least this time Horner is an expert on what he is talking about when he says self interest by a team killed Fota and the attempt to cut costs. Lets not forget that it was his team a self interest didnt let them give it a go

[What's Burning?]

You think F1 teams will not look for ways to gain a (gray area or outright illegal) financial advantage the way they look for ways to gain a performance advantage? Why not ask a pedophile to be a substitute grade school teacher while you're at it.

[CookinFlat6]

True enough, but would they want to kill the goose producing the golden eggs?

Self interest vs collective interest

Collective interest means understanding that for everyones sake, most teams have to be financially able to compete. So overriding self interest to try and be honourable in restricting costs and policing it themselves with some type of honour amongst thieves - especially thieves who understand that there will be nothing left to steal without such initiatives

Self interest means to team thats at the top, winning by outspending not wanting to give up their advantage as this is worth risking F1 imploding in the future as a result. They might have no interest in the future not being a traditional sports team, maybe a decade of domination before F1 implodes is acceptable to them

So teams will always try and gain advantage and cheat these type of agreements, but maybe not when the whole business is at stake, which is what happened, Merc stuck to it, Honda stuck to it, RBR didnt and won, and even though they are not a manufacturer, claimed the other manufacturers had an unfair advantage in hiding costs.

Its a bit like the guy caught stealing from the parish donation box saying 'I stole the money because I know the priest was just about to steal it anyway'

[acosmichippo]

What I don't understand is why something like this would have to come from FOTA. Of course they could never agree on anything.

Couldn't FOM or FIA do it?

[CookinFlat6]

FOM and FIA have tried to implement various initiatives such as customer cars, salary caps, budject caps. All sorts of shenanigans have resulted behind the scenes. From Max backing customer cars to Bernie torpedoing it, to the teams like RBR receiving incentives (alleged bribes?), to teams like Williams getting royally screwed because they expected and were promised these initiatives, to the new teams turning up on the assurance that costs would be under 100mill, to the suggestion of 2 tier championship with some teams spending more and getting a handicap compared to the others.

Nothing has even got to any significant stage, and the Fota initiative for the teams to get together and try prevent screwing the pooch (in WBs words) seemed to be the only solution

this is all in the public domain when one is prepared to look beyond the fairy tale side of F1

Lets face it, the only teams resisting the cap are RBR, who have suddenly come from nowhere to become a 'founding member' and potential shareholder and the first team to leave Fota
And Ferrari are also resisting and left Fota.

from Lotus, McLaren down, they want it but dont want to rock the political boat. afterall see what happened to Williams when they dared stand up for restrictions, they had to sack the CEO

So we have RBR who might not be around for long and Ferrari (who need to spend to beat RBR) wanting unlimited spending, and the rest of the teams are slowly grinding to a financial halt under the increased costs of next year. See how close Lotus were to folding this year? lets see how many teams actually complete next season.

[1Lemon]

Soon it'll be Ferrari and Red Bull in F1, and that'll be it. We are approaching a cliff quickly, and someone needs to do something.

[CookinFlat6]

Won't be Ferrari and RBR, will be Ferrari and Merc, Then you will have the pseudo works teams RBR and McLaren and the rest will be buying the chassis and engine from Merc and Ferrari. Either that or they will become 6 car teams
Which will effectively be the same as Merc and Ferrari having a couple of customers under their influence

I mean considering how expensive things we're imagine how much harder for a small team to compete buying a power unit, building and integrating a brand new chassis each year regulations change a bit

Whole thing is a mess and with Bernie gone it could be the catalyst for disaster or resurrection

I can't see beyond customer chassis

[1Lemon]

Bernie leaving at any time could cause catastrophic collapse or a resurgence in command and what needs to be done other than lining ones own pockets. Just have to wait and see.