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Budget restrictions to begin in 2019?

NEWS STORY
02/11/2017

The lack of outright hostility towards the proposed engine rules for 2021 announced on Tuesday is due to a number of reasons.

Firstly, the changes announced were merely a proposal, and while there are concerns over costs, especially in terms of manufacturers needing to work on two different engine packages over the coming years, as Toto Wolff admitted, the proposal marks a starting point.

Secondly, Ferrari, Mercedes and Renault are no doubting holding off on their reactions to the engine rules because of more interest is the plan Liberty Media has for the sport going forward, particularly in terms of revenue shares and budget caps. The initial proposals for this are due to be heard on Tuesday when the Strategy Group meets.

While a budget cap of 122m ($150m) has been suggested, Auto Motor und Sport has suggested that in fact the figure is likely to be 150m euros (133m) though it could even drop to 100 million euros (89m), a figure that would see the likes of Ferrari, Mercedes and Red Bull worked into a frenzy.

However, in a bid to aid teams as they are weaned from their current spending habits, Auto Motor und Sport suggests that the cap could be introduced in stages, beginning as early as 2019.

Furthermore, while there would be no limit in terms of team personnel - which wouldn't really matter as such a budget would mean a serious cull at the leading teams - it is claimed that the FIA would install its own 'accountant' within each team as an observer.

With an eye on the recent recruitment by Renault of the FIA's F1 technical chief, Marcin Budkowski, teams will no doubt scream blue murder at the thought of another potential spy in the nest, though the British-based teams' cause will be aided by the fact that by law they must register their accounts at Companies House. Not so Ferrari, Sauber or Haas.

Almost a year into the honeymoon, both sides are about to discover that this is going to be a difficult marriage.

Liberty Media sees this as a business and in order to maximise its dividend it wants a sport it can sell to broadcasters, sponsors and new host venues.

To do this, among other things, it wants to reduce the chances of domination by one particular team and to level the playing field in order that more teams stand a chance, if not of winning the title, at least challenging for podiums.

While there will be support from the likes of Force India, which has long argued for a more level playing field and a greater share of the revenues generated, the big teams and manufacturers will not give in without a fight.

Include in the equation the teams' increasing unease with Liberty's spending - which in turn effects the prize money, which is already likely to be significantly hit the bigger teams - and you have the likelihood of a number of teams and manufacturers reconsidering their futures in F1.

Indeed, the sport looks to be facing one of the most seismic periods in its history.

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READERS COMMENTS

 

1. Posted by raven49, 04/11/2017 18:19

"So, Formula 1 was a money making operation when Liberty bought it and they weren't going to change a thing except a few bits to make it better. Assume revenue stays the same and they install a budget which seems to be 20%-30% of what the wealthier teams are spending. They are proposing to make changes in the "shares" which afford certain teams a lot of money. After all is said and done, if they can achieve this, Liberty will most likely end up making out like bandits. That's their business, not auto racing. The budget numbers mentioned will result in lots of people losing their jobs regardless of how it's measured. Any real innovation will decline. Innovation takes money. Ultimately, F1 will become a spec series which I don't believe is what the fans want. Stable regulations, in the past, have shown performance differences between fastest and slowest decline. It's too bad Mercedes got this new formula right in the beginning but Ferrari did close the gap considerably as did Red Bull, although not much thanks to Renault's engine. Wonder how the Red Bull would go with Mercedes power? No wonder Mercedes wouldn't sell to them."

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2. Posted by imejl99, 03/11/2017 14:04

"Liberty Media bought highly successful business of F1. It seems they also "bought" notion that F1 is broken, so they need to fix it.
Wrong.

also,
...it wants to reduce the chances of domination by one particular team...
Hogwash."

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3. Posted by Anthony, 02/11/2017 21:56

"I fear for the future of F1. The signs are that Liberty will turn it into a down market series from which they can extract significant sums in the short term. But if you remember where open wheel Racing used to be in the US - not just Indy car but also Formula A (Formula 5000) - and what is on offer now, I don't think that a US owned F1 will offer what the current (and future) fan base wants."

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4. Posted by sunny, 02/11/2017 19:37

"liberty the burger eating toilet blocking people will render formula one into a club racing series were all those taking part uses valve cover plastic stickers to highlight what they are racing with."

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