Budget Cap Dead In Water.

[miatanut]

Originally Posted by Adam43

The simple concept of reducing costs (without cap) is not about reducing spending. It is about reducing the effectiveness of spending and hence reducing the minimum cost to be there or there abouts.

I guess one could argue that concept has worked, because nobody wins by a lap anymore, but at the same time it has enshrined the wealthiest teams. The wealthiest teams have the money to go after that last couple tenths, and with so many areas being restricted, it is not possible for a small team to show up with a really nifty new idea that allows them to beat the wealthier teams.

[Casper]

How many here have actually raced a real car on a real track, not many by some of the above comments. It is dreamland stuff to think that the top teams will stop spending money, anyone who has raced will tell you that the limit is self imposed by the incoming availability of funds and nothing else. F1 is no different and the top teams do not want constraints and it will take a very wise man to make them see any differently. Real racing costs real money and a lot of it. As I have said previously, spec racing costs the most of all and that is where F1 is headed, in fact it is already there. I would hold NASCAR up as the ultimate form of spec racing and look how much that costs to run at the front. I have never compared budgets but it must be getting up there with F1 for some teams.

[wnut]

Originally Posted by Casper

How many here have actually raced a real car on a real track, not many by some of the above comments. It is dreamland stuff to think that the top teams will stop spending money, anyone who has raced will tell you that the limit is self imposed by the incoming availability of funds and nothing else. F1 is no different and the top teams do not want constraints and it will take a very wise man to make them see any differently. Real racing costs real money and a lot of it. As I have said previously, spec racing costs the most of all and that is where F1 is headed, in fact it is already there. I would hold NASCAR up as the ultimate form of spec racing and look how much that costs to run at the front. I have never compared budgets but it must be getting up there with F1 for some teams.

Casper you say that spec racing is the most expensive form of racing, how so?
I just wish to know the areas and reasons you believe this to be the case.

Specifically I'd like this from above expanded:

"Spec classes in themselves never stopped anyone spending money and I have raced in more than one and seen the results of money being spent to circumvent the rules that were enforced on competitors. In fact it encourages those with big money to participate as they know they can sustain the spending where others can't. It is this point that F1 finds itself in, big spenders and the poorer teams who cannot sustain that type of spending. Am I the only one here who has raced in spec classes, seen the above and can see it happening in F1? "

[Armco Bender]

The only possible way you could do it is have a one make control car/engine/tyre/development/testing etc etc all supplied on an even basis to every team.
Try running that past Ferrari.

[wnut]

Originally Posted by wnut

Perhaps there is light at the end of the tunnel and the smaller teams will get a vote.

http://www.pitpass.com/51462/Exclusi...ny-in-Brussels

"More than a decade later the FIA has accepted a new Concorde Agreement in which both the Federation and the smaller teams can be out voted in the F1 Strategy Group. This is what happened at the recent meeting in Bahrain where the FIA found it impossible to introduce a cost cap strongly supported by the smaller teams. By accepting a decision-making process that can be dominated by an alliance between the larger teams and the commercial rights holder the FIA appears to have weakened its regulatory power."

Apparently the European Commission interest has cause the all powerful to see reason:

http://www.grandprix.com/ns/ns27907.html


"Todt and the teams are said by insiders to have been rattled by the EU interest and were propelled towards finding a rapid solution," wrote correspondent Kevin Eason.
He added that FIA president Todt "promised to address serious grievances over costs", and vowed to "revive an investigation into the possibility of a team 'cost cap'".
"No one wants to hear that the EU is taking an interest," said a source. "There is the realisation that we have to level the playing field and get costs under control quickly."

[Casper]

Why does spec racing cost so much? It is pretty simple really, the rules are so tight that it takes a lot of money to circumvent/bend/develop any vehicle within them. I might not be really good at explaining it but as I pointed out NASCAR is the ultimate spec class and teams sink hundreds of millions into it to go faster and all they might achieve is a margin of 3 seconds IN A RACE DURATION. In fact the bigger NASCAR teams do more in house development than F1, they develop, engineer and build the whole car in house, not just bits of it. Until you are involved the concept of spec racing looks good, the rules limit the amount of money that can be spent. What in reality happens is money starts getting spent to achieve stupid, minute amounts of gain and it becomes a staircase with no end. If you want to win you have to play the game or be uber talented, very few are talented enough to dominate and those that are then move through boredom. Hopefully someone more eloquent can explain it better than I can.

I keep referring to NASCAR due to it being the epitome of spec classes for a good reason. They have the tightest set of rules so in theory there should be a limit to how fast they can go but every time they get slowed down the engineers successfully get the cars to go faster and that is done by spending copious amounts of money. Tight rules never stopped the NASCAR guys so why should they stop the F1 guys spend money.

I apologise for not being able to express it better, get involved in a spec class and you will begin to see what I mean.

[Oldtony]

That is a very good description of what happens Casper.
The problem is that unless you have ever been in the p[osiotion of running in a supposedly "cheap, standard spec formula" you can never appreciate how much money can make a difference to a supposedly "spec" car.
Let's face it there is no such thing as a cheap winning car. Cubic money will always win no matter how tight the technical regs. are made.
That being the case some freedoms are vital in ensuring the "Gooney Bird syndrome" doesn't develop with ever increasing amounts of money chasing ever diminishing circular development until the class or formula disappears up it's own fundamental orifice leaving only a few feathers to mark it's passing.
Trouble we a cost cap is does it mean an ever increasing number of creative accountants doing the same sort of thing as Aerodynamicists do now, with even smaller contribution to the welfare of mankind or the development of useful technology.
To take your analogy further, NASCAR provides some great entertainment but has it contributed anything else since it stopped assisting the speeding up of Interstate liquor delivery?

[wnut]

Originally Posted by Casper

Why does spec racing cost so much? It is pretty simple really, the rules are so tight that it takes a lot of money to circumvent/bend/develop any vehicle within them. I might not be really good at explaining it but as I pointed out NASCAR is the ultimate spec class and teams sink hundreds of millions into it to go faster and all they might achieve is a margin of 3 seconds IN A RACE DURATION. In fact the bigger NASCAR teams do more in house development than F1, they develop, engineer and build the whole car in house, not just bits of it. Until you are involved the concept of spec racing looks good, the rules limit the amount of money that can be spent. What in reality happens is money starts getting spent to achieve stupid, minute amounts of gain and it becomes a staircase with no end. If you want to win you have to play the game or be uber talented, very few are talented enough to dominate and those that are then move through boredom. Hopefully someone more eloquent can explain it better than I can.

I keep referring to NASCAR due to it being the epitome of spec classes for a good reason. They have the tightest set of rules so in theory there should be a limit to how fast they can go but every time they get slowed down the engineers successfully get the cars to go faster and that is done by spending copious amounts of money. Tight rules never stopped the NASCAR guys so why should they stop the F1 guys spend money.

I apologise for not being able to express it better, get involved in a spec class and you will begin to see what I mean.

Thanks Casper, thanks for sharing.
I always felt that you got a lot less than you paid for in a spec class because of the monopoly conditions that had been granted to suppliers. Development was however limited to fiddling with what you had, and as you say trying to bend the rules in your favour.

It was I felt cheaper than open development which basically involved stealing an advantage on the opposition and copying the next have to have clever trick. Sometimes you can get a clever idea that doesn't cost too much to deliver a really good benefit, Mercedes split turbo style!
Then the opposition copies it and you move on to perfecting what you have or / and the next clever trick. Open development was way more interesting from an engineering point, but often viciously expensive.

Both ways seem to cost whatever you can lay your hands on though!

P.S. I thought the FF1600 Kent rules were pretty good for running a racing class. But then they had to go and get clever!


Claimer rules always seemed a good way of putting the brakes on ridiculous expenditure, particularly in spec classes!
Might work in F1!

[wnut]

Originally Posted by Oldtony

To take your analogy further, NASCAR provides some great entertainment but has it contributed anything else since it stopped assisting the speeding up of Interstate liquor delivery?

Guess it goes back to what the point of going around in circles is!

Sport / entertainment or Engineering? Both?

[Mike Harte]

Following the crunch meeting held yesterday at Bernie's airport (or so I read in the last few days), very little seems to have been announced officially. Autosport has this piece: http://www.autosport.com/news/report.php/id/113731 , which seems to indicate that the top teams as well as Ecclestone and the FIA might be attempting to kick the problem into the long grass.

I have no direct knowledge about the matter, but I just have a knawing doubt in my mind and that Toto Wolff may be somehow the catalyst behind the reluctance to set a budget cap. It was not that long ago, when he was at Williams, that he favoured the cap, but now that he is with Mercedes he has changed his tune. Williams seems to now be supportive of not introducing a cap, and I wonder how much their thinking is influenced by the fact that Wolff is still a shareholder in the Williams Group of companies.

It just seems to leave a nasty smell, in my opinion; it is, after all, a direct conflict of interest!

[wolfhound]

Originally Posted by Mike Harte

Following the crunch meeting held yesterday at Bernie's airport (or so I read in the last few days), very little seems to have been announced officially. Autosport has this piece: http://www.autosport.com/news/report.php/id/113731 , which seems to indicate that the top teams as well as Ecclestone and the FIA might be attempting to kick the problem into the long grass.

I have no direct knowledge about the matter, but I just have a knawing doubt in my mind and that Toto Wolff may be somehow the catalyst behind the reluctance to set a budget cap. It was not that long ago, when he was at Williams, that he favoured the cap, but now that he is with Mercedes he has changed his tune. Williams seems to now be supportive of not introducing a cap, and I wonder how much their thinking is influenced by the fact that Wolff is still a shareholder in the Williams Group of companies.

It just seems to leave a nasty smell, in my opinion; it is, after all, a direct conflict of interest!

You could probably add 3 more to that list in the form of Horner, Dennis & Mattiacci. All of whom probably think that they can bring a bigger budget than the next to their teams. Anyway their four teams probably get enough from Bernie to cover a potential cost cap without the need for any other income.

[Adam43]

Originally Posted by miatanut

I guess one could argue that concept has worked, because nobody wins by a lap anymore, but at the same time it has enshrined the wealthiest teams. The wealthiest teams have the money to go after that last couple tenths, and with so many areas being restricted, it is not possible for a small team to show up with a really nifty new idea that allows them to beat the wealthier teams.

It's the lack of freedom that has stopped that, which is driven by everyone shouting for cost reduction.

I'd allow more freedom, but change the rules more often and with less notice. Yes, throwing more money at it will likely get the best answer, but there is more chance of a nifty idea coming from something other than just money.

[miatanut]

Originally Posted by Adam43

It's the lack of freedom that has stopped that, which is driven by everyone shouting for cost reduction.

I'd allow more freedom, but change the rules more often and with less notice. Yes, throwing more money at it will likely get the best answer, but there is more chance of a nifty idea coming from something other than just money.

The lack of freedom came from this spec movement which was aimed at the idea of reducing costs without a cap. It has failed fabulously.

I've pondered that idea of more freedom with rules changes more often. I hadn't thought of a shorter notice. I think it is a good concept. Closing out the nifty idea that came from something other than money has been our biggest loss from going down this route.

[miatanut]

Originally Posted by wnut

It was I felt cheaper than open development which basically involved stealing an advantage on the opposition and copying the next have to have clever trick. Sometimes you can get a clever idea that doesn't cost too much to deliver a really good benefit, Mercedes split turbo style!
Then the opposition copies it and you move on to perfecting what you have or / and the next clever trick. Open development was way more interesting from an engineering point, but often viciously expensive.

The original idea of spec was that it was going to work this way, but we now have 25 years of evidence that spec just causes people to spend the money they have in smaller and smaller areas, and the result is money makes a bigger difference in the spec world than in an open world.

Absent a cost cap, teams will spend the money they have. Racing has always been this way. Closing off more and more areas for development just favors those who have large amounts of money to make their car a little more equal than others (apologies to George Orwell).

Yeah, a cost cap would move the field of battle to the accounting wars, but at least there would be space for a better idea to prevail, and we could see more variety on the grid, and more passing on the track due to different approaches to achieving a lap time.

[wolfhound]

The problem for the smaller teams is budget. If one compares what the big teams get that is probably in the region of 100 million each from Bernie/CVC and the midfield teams who's total budgets are probably half that.
To the best of my knowledge the bottom team gets less than 10 million from Bernie how have they a hope of getting close to a big teams Bernie money in sponsorship?
The budgets of the big teams are rumoured to be in the region of 200million.

The proper way to solve the problem would be to even up the difference between what the teams get from Bernie/CVC. I would suggest a spread of between 60 to 40 million from top to bottom. That would make things fairer for everybody. I would also suggest a budget cap of 100 million with a maximum limit on engine cost.
Will it happen not a chance.
There are also rumours that one of the smaller teams may not make it to Barcelona this year

[Adam43]

I'd be surprised if it's just one. Perhaps three or four.

[wnut]

Originally Posted by Adam43

It's the lack of freedom that has stopped that, which is driven by everyone shouting for cost reduction.

I'd allow more freedom, but change the rules more often and with less notice. Yes, throwing more money at it will likely get the best answer, but there is more chance of a nifty idea coming from something other than just money.

Yet they haven't made the aero spec, which is the biggest current performance differentiator, the most expensive area in terms of cost of development and the area that the big teams have the most invested in!

Perhaps it is time for spec front and rear wings!

[Adam43]

It is highly regulated, which means the dismissing returns of spend is perfectly demonstrated. Last year the front and the back of the grid was very close despite tens of millions of pounds spend difference.

[fourWheelDrift]

Originally Posted by Adam43

It is highly regulated, which means the dismissing returns of spend is perfectly demonstrated. Last year the front and the back of the grid was very close despite tens of millions of pounds spend difference.

I think the crux of the argument is that the spec approach to cutting costs leads to a close grid but keeps it in the same order, big spending teams at the front! With a budget cap and more open regulations the grid will spread out but the order will vary with different teams coming to the front at different races or in different seasons.

Personally I think a major reason that we don't see more variety at the sharp end is that, Monaco excepted, all the circuits are now very similar, to make matters worse they are all pretty much billiard table smooth. People say they have to be smooth because the cars can't cope with bumps but this logic is completely inverted. If the circuits had a few bumps the cars would be designed and set up to deal with them.

[JacobP]

Wait, somebody rejected the dumb idea that Ferrari and McLaren budgets should be limited to the level of Marussia just so that the failing backmarkers can score their first point? *shock*

Considering my sarcastic question, you can guess where I stand. What is this? Socialism?

[Casper]

Opening the rules up and at the same time restricting the spending would encourage more unique approaches to going faster and subsequently the chance that a lesser team might come up with an idea that makes them more competitive. Tight rules means that everyone is tied to the same patterns of thinking and if an advantage is by chance found everyone gets their knickers twisted and starts yelling unfair and we have the ludicrous situation where in fact out of the box thinking or application of an idea becomes discouraged. Why the sanctioning bodies think that it is a good idea beats me as it always ends up in boring racing because of the rule restrictions. Mercedes this Year will dominate because no one is allowed to compete on equal terms due to engine the development freeze. Utter stupidity in my view and it will lead to domination as Vettel did in the last few years. They have just moved the deck chairs on a sinking ship and are so blinded by greed they can't agree on how to keep the water out. These are supposed to be intelligent managers but from the outside looking in their credentials do not stack up.

[Casper]

Originally Posted by fourWheelDrift

Personally I think a major reason that we don't see more variety at the sharp end is that, Monaco excepted, all the circuits are now very similar, to make matters worse they are all pretty much billiard table smooth.

You have never raced a car? it shows with simplistic thinking of this nature. I will illustrate a major fault in modern F1...TIME. Because the cars stop so quickly the possibility of passing under brakes from top speed is severely limited due to the braking elapsed time from when the driver gets on the brakes to the turn in at the corner. If the braking period were to be increased by the use of steel brakes then passing under brakes would occur more than now. No passing under brakes means that if DRS had not been introduced the top cars positions would be basically static as it used to be all due to time under brakes. This static positioning of cars for the whole race occurs right back down the field due to each car falling into performance stratas within the field. The time contingency under brakes is largely responsible for this occurrence. There is more to it but braking distance is a major factor.

[Born Racer]

Originally Posted by JacobP

Wait, somebody rejected the dumb idea that Ferrari and McLaren budgets should be limited to the level of Marussia just so that the failing backmarkers can score their first point? *shock*

Considering my sarcastic question, you can guess where I stand. What is this? Socialism?

Perhaps the category would benefit from a bit more socialism and a bit less unchecked capitalism.

It's also worth considering that Marussia and Caterham came into the sport under the premise of some kind of budget cap I think, although they should have had that in writing.

[miatanut]

Originally Posted by JacobP

Wait, somebody rejected the dumb idea that Ferrari and McLaren budgets should be limited to the level of Marussia just so that the failing backmarkers can score their first point? *shock*

Considering my sarcastic question, you can guess where I stand. What is this? Socialism?

Has anyone anywhere in this thread (or any other thread for that matter) proposed setting it at a level 100% of the field can raise?

Obviously the place to set it is at a level a majority of the field can raise, but some teams can't. F1 has always had haves and have-nots, and that's perfectly reasonable. Having a situation where the rules over-specify the car and concentrate development into areas where large sums of money are required for small increments just leads to racing where all the cars look the same, all have more or less the same performance envelope, and people complain, rightfully, about the lack of passing. Then, the sanctioning body dreams up gimmicks to encourage passing to counter act the effect of the rules over-specifying the car.

[wnut]

There is no way on this Earth a budget cap can work.

If you think that Mercedes, Fiat, Renault are going to allow people to pick through their affairs you are smoking something that is both dangerous and illegal.

The next problem is dealing with pricing, Mercedes makes its active suspension available to the F1 team for a dollar ($1).
It costs RBR $20 million to produce an active suspension.
Lotus pursues a blind alley and sinks $20 M with no result.
Ferrari stays with its current suspension for nothing.
Newey decides to ditch KERS and save weight and cost.

What does a simulator cost?
How do you depreciate assets?
Cost the Ferrari test facility at Fiorana?

Where are we now?