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Brawn: We need to talk about... budget caps


As Manor goes under, Ross Brawn reiterates Liberty's desire for a budget cap, even though he's not sure how it can be done.

While some will point to Manor's failure as poor business, the fact is that the Banbury-based outfit was one of three enticed to enter the sport in 2010 by the promise of a budget cap that would not only make F1 (cough) affordable but would go some way to levelling the playing field.

Having been rescued at the death by Ovo Energy boss Stephen Fitzpatrick at the beginning of 2015, despite having essentially being given the last rites along with Caterham in late 2014, the little team that could soldiered on. Indeed, for several months it looked as though the perennial minnows might claim tenth in the standings and thereby receive a significant slice of the 2016 prize fund.

Alas, on a soggy Sunday afternoon at Interlagos, Sauber's Felipe Nasr ended that particular dream.

And so, unless there is another miracle which again sees the Banbury team rise 'phoenix-like' from the flames, Manor becomes the third and last of the (new) class of 2010 to fall by the wayside.

While most see the obvious merits of a budget cap, the haves are very much against it, indeed Ferrari and Red Bull both threatened to leave the sport when the FIA last tried to enforce one. Subsequently the Resource Restriction Agreement (RRA), a sort of gentleman's agreement by which costs could be controlled, was introduced but this too was quickly dropped.

Even before it had completed its purchases of F1, Liberty Media was stressing the need to control costs, arguing that not only was the current spending 'arms race' stifling competition, it was creating a situation whereby more teams would go the way of HRT, Caterham and now Manor.

Newly installed as boss of the technical side of the F1 company, Ross Brawn, who understands the budget capping saga from the other side of the fence, is aware that something must be done, even if he's not entirely sure how it can be achieved.

"The situation at the moment is that the return on investment, in terms of performance, is still steep, so the more money you invest the faster you go," he told ESPN.

"As long as you get a competent team like Mercedes doing it then that is what happens," he continued. "What we really need to do is reduce that slope and find ways within the technical regulations of rewarding less for heavy investment.

"That's the concept, achieving it is more difficult," he admitted.

"The idea is to have a process going on all the time of chipping away and getting back to where we want to be, there won't be one solution where we can say 'if we do that we can halve the slope'. But every decision that's made, we have to take that into account; are we giving more scope for heavy investment to go further or are we reducing it? We just need to keep thinking about it and making sure that all the discussions that happen are going in the right direction to pull the slope down.

"Budget caps have been discussed," he continued, "people say that they don't work, but they have never actually been tried. There was a voluntary budget cap or resource restriction that didn't work because not everyone volunteered to it in reality. So that is never going to work if you have got some of the teams doing it and some of the teams not.

"I would still like to have a discussion about budget caps and control, and see where people stand on that and if we feel it could be a solution. That, for sure, would then bring a limitation to what people can do. But maybe it's nirvana; maybe that is something that can't be achieved because of the range of teams in different countries and different considerations.

"I'm not saying that we have to have a budget cap, but I think we should certainly discuss it because that does address many issues. You've got all the nuances to it, because do the drivers come into the budget cap or not and so on and so forth. But a huge amount of debate went on a few years ago and I think that could be picked up again to just see if that is a solution that could work."

At a time Force India and Sauber have taken their concerns to the European Commission in terms of the way the prize money is shared, Brawn admitted that this is an area Liberty is looking at but admits that it is unlikely anything can be done until the current commercial agreement expires in 2020.

"Of course, we've got the issue of the distribution of funds to the teams, which we can't do anything about now because we have got contracts with the teams and there is no proposal to change that, but they are coming up for renewal in 2020 and we need to look at that and see if there is a better way for Formula One overall to distribute the funds.

"My personal view is that a healthy Formula One is where there is a good stock of teams that can stand on their own two feet, not be manufacturer teams, not be funded because there is a different set of objectives, but the Williams, to some degree McLarens, Force Indias and Saubers, those teams can stand on their own two feet in a respectable way and put up a decent job.

"If those teams spend far more money than they have and go bust then we can't stop that, but you want to get them over the breadline so at least if they do a sensible job with good management then they are going to have a good business and the businesses are going to be attractive and we are going to get new teams in."

All of which comes too late for Manor and its 200+ employees.


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1. Posted by Spindoctor, 06/02/2017 10:42

"Like Ocean Yacht Racing (or Americas Cup) which was likened, many years ago, to standing under a cold shower whilst tearing-up 10 notes F1 is very expensive. To the likes of McLaren, RBR, Ferrari, Renault & Mercedes the cost, per se of competing isn't the determining factor. Williams sits slightly below these guys in terms of ability to spend, if not commitment to F1. The rest of the field is essentially unable (or unwilling) to compete financially, and consequently on the track. If you want a level(ish) playing-field go elsewhere.

That's not to say that the Big Guys will continue to play ball with Liberty, particularly if they can't come-up with something to stem the decline caused by CVC\Ecclestone's greed. Nobody's that bothered about winning a series which is increasingly alienated from its audience.

Brawn needs to sort-out Liberty's PR\attitude. So-far its all been about how they (Liberty) are going to make more money, but that won't happen until F1 gets more viewers...."

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2. Posted by Yves, 29/01/2017 19:45

"There are many valid ideas for cost reduction suggested below, however, I'd like to distinguish between cost reduction and budget cap. I wonder if it would be a good idea to impose a penalty on the prize received by a team which would have spent more than the cap amount? It could be 100% or less of what is in excess, redistributed equally to all the other teams or, let's say, the last three or four teams. This way, it would give a chance to the likes of Sauber, Force India and Manor to step up their games using the penalty money taken from the overspenders, while the top teams would still benefit from their results for prestige, visibility and sponsor revenues. "

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3. Posted by -ape-, 29/01/2017 15:39

"Most tech rules were made for cost control so
with a budget cap most tech rules may be scrapped, this was the plan of Max M.
We will finally see more different designed cars with different performance .
Of course all teams will try to cheat and that only can be done on a small scale like they fiddle the books for the taxman. Big cheats will be caught as Mac lies about the Ferrari papers. Which team wants to risk that penalty.


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4. Posted by GrahamG, 29/01/2017 11:29

"Sorry to disagree, but pitstops are one of the major cost drivers, because they require lots of people and expensive equipment to be carted around the world. Yes several tyre manufacturers but a (modern dimension) tyre which can last a race and a minimum of (say) 1 minute from a car entering to leaving the pits an (like some USA events) only two people to work on the car.
If energy storage and re-use were banned the cost of drive trains would be a fraction of the current systems (which don't forget also interact with braking systems making those more expensive and complex as well but you could retain the current turbo engines, so avoiding a cost hike for redevelopment. It might also attract a third party engine supplier as the engine would be more relevant. "

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5. Posted by ZJAY, 28/01/2017 21:28

"I believe the only way to prevent teams from failing financially is to reduce cost of participating by increasing competition. When you have 4 power suppliers and it takes at least three years to develop a decent power unit, cost goes up. It is actually a monopoly right now. Either keep the power unit regulation as is for the long term so the cost goes down, or better go to a power unit that can be purchased from multiple suppliers from existing technologies. Also increase competition for tires and force a minimum number of pit stops per race. Finally allow teams to buy from each other. Say one team develops a front wings that they can sell to others and they can buy other parts from others teams. This away not everyone has to spread their research and development money on the entire car. This will not lead to having the same cars for half the field if there are multiple tyre suppliers and multiple power unit suppliers and multiple break suppliers etc. "

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6. Posted by Usedtobe, 28/01/2017 20:50

"The idea of distributing the revenues raising the prize fund of small teams is one simple and very good idea, therefore i believe it will be difficult to implement, even if this doesn't mean they where than capable of fight for the championship. As for the budget cap, Brawn was elequent. Even if it was enforced the haves would contract higly paid house cleaners and so on. Carey talks of
increasing revenues, one simple way was increase the number of european GPs, proximity helps with logistic witch allow back to back races and teams can work whith shifts like Withmars sugested when Mr. E first talked about a 21 races calendar. They just had to be affordable for the organisations."

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7. Posted by Insane Reindeer, 28/01/2017 20:45

"No. No. No. No. No. If he wants a budget cap then make it a "one make" series. You can't have a budget cap and insist that the teams make their own cars. And if he does manage to convince a couple of teams to go down the "one make" series then just watch the others pack up and leave and go and do their own thing. Which will end up being better. And one day will swallow up the "one make" series.

If he went the other way, and made it clear that the sport was going to get more expensive, vastly more so, then the teams would have a better chance of making a go of it. Why? Because no one would be coming into, or remaining in, the sport under the belief that everyone was going to be on a level playing field.

And if he does manage to get a budget cap in, some how, and it's still F1, then what next? Where does the cost cutting end? Limits on the number of mechanics who can work on the car during pitstops? Limits on the number of people in the teams paid over 100,000 a year? Limits on how long someone can work for the same team before they must leave to either work for another team or allow the team to hire someone cheaper? Limits on the number of tyres a car must use each race? Making an engine last half the season? No wind tunnels? No simulators? Where?! Where does it end?!

Budget caps are to F1 as Donald Trump is to America. "

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