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Carey confident that budget cap will work

NEWS STORY
19/06/2019

For as long as anyone can remember, F1's powers that be have insisted that one of the main ways to improve the competition in the sport would be by imposing a budget cap.

By limiting the amount that teams can spend it is believed that in addition to ending the all-out spending wars we have witnessed over the years, a cap on budgets would not only help level the playing field but encourage new teams to the sport.

The previous management sought to introduce a budget cap, and FIA president, Max Mosley certainly came close, but in the end it came to nothing and those new teams enticed to enter F1 with the promise of a spending ap soon learned to their cost that it was not to be.

Since buying the sport in early 2017, Liberty Media has made no secret of its desire to introduce a cap, seeing it as the cornerstone of its plan to level the playing field and thereby improve the racing by hopefully ending the monopoly of the bigger funded teams.

Though the final details of the budget cap, along with all the other various rules and regulations for 2021, have been delayed until October, F1 boss Chase Carey insists it is the way forward for the sport.

"It took us a year to discuss this process through," he tells Servus TV. "Not only to get a suitable limit but also a process with which we can review it accordingly.

"Everyone can be sure that the cost structure is reliable," he insists. "Our sport is complicated, but these tricks can be found in every business worldwide. The rules are clear and I am confident that this can also be checked properly and reliably."

As previously reported, though the budget cap will not be officially introduced until 2021, it is intended to give it a 'dry run' next year.

"The plan is to carry out a test run by 2020," admits Carey. "That won't affect the budget limit yet, but the process of how we check information. Everyone should get a year to understand how it works. We want to see what the results are like.

"It will be a learning process, I am sure," he adds. "We have no illusions.

"My guess is that we will refine the cost structure even further and we and the teams have to live with it. But we needed a starting point now and that is the beginning of a process that continues.

"We are trying to create a sport that makes the competition better than it is today. It must be a healthier business for everyone involved."

Despite Carey's confidence, there remains much scepticism, not only in terms of how it can be successfully policed, but various other factors which could still enter the equation.

For example, if the new regulations are revealed and the teams get to work only for Ferrari to exercise its power of veto, would this be included in the proposed 175m cap.

Were Haas to drop Dallara and bring its chassis design in-house or a team were to suffer a natural disaster such as a factory fire, how would this affect their caps?

Like the never-ending range of 'what ifs' being raised in terms of Brexit, one can understand why the 2021 regulations package has been delayed.

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READERS COMMENTS

 

1. Posted by sagosac, 25/06/2019 18:58

"closer competition to be achieved solely via more freedom for engineering genius; because there are more talents involved than just the guys from Mercedes and Adrian Newey. Until the 90s there were always privateer teams who were able to win and we've had less restricted regulations"

Rating: Positive (1)     Rate comment: Positive | NegativeReport this comment

2. Posted by sagosac, 25/06/2019 18:44

"impossible to police, any budget cap. And unnecessary; unnecessary change in the basic concept of the sport. Even if you would screen all internal and external communications; like e.g. Mercedes is swapping engineers between the race factories and the other factories. Even a rather uncomplicated like RacingPoint: how do you wanna monitor whether they produce one extra frontwing, in the middle of the night ? Why should they account this piece ?
The sole way to increase competition must be first (and solely) to align the team's funding by the prize pot division. If RacingPoint may finish 4th in the Constructor Championship and Williams 3rd (2014 & 15) with a very unfair prize-pot-distribution, then there is exactly ONE thing to change in terms of finances. "

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3. Posted by TokyoAussie, 20/06/2019 4:44

"I believe costs are out of control, but I don't think Liberty is in the business of controlling costs. I remember the era of qualifying engines that would last 1 lap, not the 3 engines/year we have now, and yet costs have not been reined in. Surely there is ground for cost cutting, but I suspect Liberty is only concerned with increasing its share of the pie by putting caps on the shares taken by the teams.

What fans want is close racing, and that can be best achieved by technical changes. The top teams will always spend more, but the other teams must have the chance to compete, or why should they even bother turning up.

Prior to 2019, I hadn't missed an F1 race in nearly 4 decades, and rarely missed any session over a period of about 28 years (once I had access to all sessions). Now I don't watch live at all. I rarely watch replays of sessions. I don't even watch replays of some races now. If F1 cannot keep me hooked, and I'm addicted, it is in deep poop."

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4. Posted by USA1, 20/06/2019 2:23

"Carey a budget cap would be great, but to get real F1 back let’s just stay with the budget cap and leave everything else open, let the best driver win!"

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5. Posted by Interestedparty, 19/06/2019 18:06

"Effectively Liberty is the single largest cost to F1 (+/- 45% of the annual income). If cost reduction is the key focus surely this is where to start? What real value do Liberty add to the sport? I believe very little.

A good model is the Premiere League - almost all the revenue is fed back into the sport not into an 'outside party'. A very reasonable cost of an internal team that manages the sports commercial operations on behalf of the teams. Image what the teams and the sport - all the real stakeholders - could do with this money.

The business model needs dramatic change not just tweaks that are in the investors primary interest and not that of the sport."

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6. Posted by FQITW, 19/06/2019 18:04 (moderated by an Adminstrator, 19/06/2019 19:06)

"Just a few thoughts on this.

This price cap is not really a cap as teams can spend in a different way.
Would it not be better to leave things alone?

Realistically a maximum of three teams can win but in reality its Hamilton,Verstappen and one of the Ferraris. So just three people.
No disrespect to Bottas/Gasly

Given that their three teams are the 'spending culprits' with their ranks of technicians in the background it is obvious the other seven teams will never get a look in.

So for the future these seven teams' presence on the grid is not a given if purely for financial reasons and the lack of any real chance of victory.
Yes F1 is their 'DNA', they are here to win,they are not here to make up the numbers, bla, bla, etc.

But what are they really doing other than precisely that?

I say let the spending continue and let these 'lesser' teams gradually fall away until the top three are left racing themselves and furiously justifying their existence to their respective boards.

The fans will be gone long before that and the TV spectacle will be worthless to money grabbers like Sky/Liberty.

We end up with nothing and no problems.

After a while when some more sensible people arrive then its the time that another series can be started with common sense and a big dose of rationality.
F1 now is a pointless exercise,over bloated,non relevant and frankly in these economic times their out of control spending an affront to the 99% of people who don't live the 'good life'.

Of course life has rich & poor people and always will.

My problem is the sport has been raped virtually to non existence by a few with no thought about anything or anyone but themselves and the fans, - who are now waking up in droves - have had the privilege of paying to watch their beloved sport die."

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7. Posted by alvarezh3, 19/06/2019 17:36

"@Tony

Aside from your suggestion, I would add a 100 million dollar fine and 100 of constructor championship points ducked for first cheating offense (assuming there will be a budget cap). Double for the second and double again for the third, etc. If you don't spank them real hard they would not care to cheat.

I noticed why Apple doesn't care much about being caught using -and not paying for- someone else's legally patented technology. Yes, if they get caught they have to pay fines and user fees to the patent owner. Apple pays the fine and the patent owner 100 million (or even 500 million!) but they had already calculated that the stolen technology would represent an additional 1 billion in net income for them. They don't care to brake the law.

A 100 million dollar fine will most likely earn Mr. Wolf, a Mr. Binotto, a Mr. Horner, a Mr. Brown and a Mr. Abiteboul a meeting with their respective companies's owners/presidents. Any amount short of that will be an invitation for cheating, their gain could be greater than their loss."

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8. Posted by Tony Soprano, 19/06/2019 16:16 (moderated by an Adminstrator, 19/06/2019 19:06)

"Once again, Carey and team miss the mark. As as number of Pitpass articles have shown, trying to control the teams is like herding cats. Unless the costs subject to a cap are very carefully defined, the big teams will find a way to describe a capped line item as something other than what it is in order to have it fall outside the cap. The only really effective way to stop ridiculous spending is to make it unproductive. Pitpass has shown how changing the aero rules (get rid of all the nonsense appendages and winglets that cost a gazillion dollars to gain 1/100 of a second) not only reduces costs but increases competition. Why teams wind-tunnel test cars in "clean" air when they run in dirty air most of the time is beyond comprehension. So clean up the aero, stop with the fancy brake venting, stop DRS, put the drivers in control and give the fans a real show instead of the funeral processions we see today. Costs would go down, revenue up. I never would have thought that the "good old days" would be the Bernie era but it sure looks like the Liberty era is incompetent."

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