16/05/2014
NEWS STORY
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.