FIA Adjust 2010 Decisions: Budget Caps

FIA Adjust 2010 Decisions: Budget Caps

Back in March the FIA WMSC met to discuss future possibilities for the 2010 and 2011 Formula One seasons. Aside from the change in the points structure that was initially planned for 2009 but then put back until 2010 was the introduction of the optional budget cap. The cap was designed to allow smaller teams to compete with the larger teams, as those who accepted the limit of £30m would be have development limitations lifted. This cap as now been revised to £40m, but that isn’t the only change.

Previously, the proposed £30m would encompass every expenditure a Formula One team makes with the only exceptions of the motor home and any penalties and fines the team receives during the course of the year. However, the cap has now been increased by £10m and importantly, engine costs are now not included. Also removed form the budget are the drivers salaries, marketing and hospitality and anything else the teams can prove has no affect on its on-track performance.

This makes far more sense from a team owner perspective because additional items like PR are completely separate from the sporting side. If Red Bull want to spend millions of pounds on a lavish parties for their guests, then why can they not – after all, it is their money and has no influence on how fast the Red Bull car actually goes. If Dietrich Mateschitz would rather a decent bottle of champagne rather than Tesco Value, then in all honesty, whatever. It’s his money.

As before, the capped teams will be allowed more technical freedom to develop their cars and engines. The engine will not be rev-limited and adjustable front and rear wings will be allowed. The wind tunnel usage will not be monitored and the teams may test as much as they want during and between the racing seasons.

The budget capped teams will be monitored by a new organisation set up called the Costs Commission, and the WMSC has stipulated that a chairman and two commissioners will oversee the teams and ensure they are remaining within their budget. The FIA has stated that one commissioner has to be experienced in finances while the other has to have high-level experience of motor sport.

With several companies expressing a wish to enter Formula One providing the budget cap is reasonable, the FIA has also raised the maximum entry number of teams from 24 to 26 (13 teams). And from a non-experienced look from the outside in, the cap looks to much better and more thought out than previously. It will be interesting to see who of those interested parties will now come forward to say that they will step up to Formula One and have a go. It will also be interesting which of the current teams take on the budget cap and if it will have any impact on the racing.

One concern I have is that the actual racing will be damaged. If we presume that Ferrari do not accept the budget and remain within the current regulations but with a fund limited by only what they can raise, will they still be able to compete with the capped teams who will be able to develop cars and engines that are potentially superior. All it would take is for one of the capped teams to stumble across something that will add several tenths to their lap time at a fairly low cost and we could have one team winning everything.

I wonder how much the fabled Toyota/Williams/Brawn diffuser cost to develop and build? I’m not suggesting that is the only thing on these cars that is making them fast, far from it, but you get my point, I hope.

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7 comments

  • It’s difficult trying to weigh up all the pros-and-cons from today’s proposal. But the thing I find confusing is that if the sub-£40m gang enjoy the benefits mentioned, won’t these absorb most of the budget?

    High revving engines = greater unreliability = high costs.

    Movable wings = research & development = high costs.

    Then you have unlimited post-season testing, wind tunnel usage… all amounting costs!

    Money aside, teams that reap the rewards of movable wings and more potent engines will probably be well out in front of the other teams. It wouldn’t suprise me if the FIA imposed more rules after 2010 to bring reduce the defecits for the ‘benefit of the show’ and improve any safety fears.

  • Gah. Trust you to comment while I’m writing the third and final FIA post! 😛

    High revving engines = greater unreliability = high costs.

    However, the cap has now been increased by £10m and importantly, engine costs are now not included.

    So yes, the engines may cost the capped teams more, but it won’t come from the budget cap of £40m. Providing the team can afford the engines, they can use them. But I do see your point. I will add though that in the two years prior to the engines being forced to last for more than a race, the reliability did improve, I’m sure. Okay, so it wasn’t close to the reliability we are seeing these days (only one retirement in Bahrain – impressive), but it was getting better.

    It wouldn’t suprise me if the FIA imposed more rules after 2010 to bring reduce the defecits for the ‘benefit of the show’ and improve any safety fears.

    It wouldn’t surprise me either. It’s traditional that the FIA institute new rules, and are then forced to adjust them because they didn’t consult knowledgeable people beforehand who would have told them what I am questioning here (because I’m not that specifically knowledgeable, but I have common sense) and what some people (who are clever) are confirming in their minds one way or the other.

  • I’m really, really worried about this. The FIA haven’t given many clues as to how they’ll enforce the cap or indeed how they intend to define the various exemptions. As a result, I can see several teams agreeing to the cap and then either accidentally overspending or deliberately putting a coach and horses through the cap. The cap is also low enough that new teams and championship-winning teams have a huge advantage over everyone else because they will have more than the capped amount to play with.

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