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No need for budget cap says Ecclestone

NEWS STORY
16/05/2014

Bernie Ecclestone says that Formula One teams do not need a budget cap but should instead learn to spend less according to an article in the Independent by Christian Sylt.

A £120m cap on team budgets was due to be introduced in 2015 but was blocked in April by the Strategy Group, a body comprising Ecclestone, the FIA and six leading teams. "I don't think they need a budget cap. The people who don't need a budget cap will find their way round it," says Ecclestone.

The formation of the Strategy Group last year, and its recent decision to drop the cap, angered F1's smaller teams which are not members and would have benefited most from the restriction on spending.

On April 10 the four smallest teams - Marussia, Caterham, Sauber, and Force India - wrote a letter to FIA president Jean Todt in which they expressed their unhappiness at the cost cap being dropped and suggested that the Strategy Group breaches European competition law.

It said "the EU Commission addresses competition policy in the sporting market place by using certain criteria to acknowledge that sports businesses exhibit special characteristics that distinguish them from other generic businesses and as such special rules are allowed to apply that otherwise would not be acceptable under competition law. Formula One enjoys such a distinction in the way that it operates."

"We believe that the actions of the F1 Strategy Group and its acceptance by the FIA and the CRH go against many of these special characteristics and brings into question the very basis of some of the rules of competition that are being relied upon by the sport."

Ecclestone says that the Strategy Group is justified on the grounds of on track performance. "There are four teams that are not in the Strategy Group and why not? Because the people that are have committed to racing in Formula One to 2020 and have put up sensible guarantees if they don't. The people that aren't in it didn't have the performance anyway, even if they could put the money up. The only people in there are because we do everything in Formula One by performance and how long they have been going.

The letter from the teams led to a meeting at the start of May involving Todt, Ecclestone and all 11 teams. The leading outfits proposed cost cutting measures including a tyre warmer ban, the return of active suspension and more standard parts. It didn't appease Todt who said afterwards "what was proposed? It was a joke."

Ecclestone says that one way to keep costs down would have been to scrap the new V6 engines which have been introduced this year and have been widely criticised for being quieter than their V8 predecessors. Ferrari, Mercedes and Renault spent around £300m developing them and they cost other teams up to £15m annually.

"Tell me, what was the idea of the cap? To keep costs down. So we put this engine in and it costs four times more than the other one and costs the manufacturers a hell of a lot of money," says Ecclestone. He may have a point.

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READERS COMMENTS

 

1. Posted by Dreadnaught, 22/05/2014 22:08

"It really would be the crassest of ideas to dump the new power units after the development money has already been spent. They are at least relevant to the modern world. In the context of F1 £ 300 million is not excessive nor £ 15 million per season. Perhaps Mr E would like to chip in ?
What is the combined cost of all of the F1 aerodynamics that get more and more irrelevant, add nothing to the entertainment and harm the racing ?
Nigel Bennett's ideas ( to be found under his name on the Net ) have much to commend them. "

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2. Posted by gturner38, 18/05/2014 3:11

"So just to be clear, the solution to save money is to spend more money developing active suspension and throwing out a piece of equipment that couldn't possibly cost very much or have any need for development from season to season. Oh, and to whine about engines that have already been developed.

Of course, the logic that only well financed teams that aren't in trouble financially should be involved in discussions about how to save money is absurd but not surprising. What incentive do Ferrari, Mercedes, and Red Bull have in making it easier for Force India to fight on equal footing when Force India is already showing potential with the new rules?"

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3. Posted by ape, 17/05/2014 21:10

"Bernie's logic .....LMFAO"

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