The Budget Cap

[chillibowl]

in fairness how much extra are they asking for?

lets say they are experiencing an extra 10% increase in (un)anticipated costs because of inflation...so that means what?

an extra 10-15mil over the cap that they are looking to access?

rules are rules so i agree they shouldn't get it (or it should come with such a penalty that they wouldn't bother taking it)...but its not a relatively huge amount not really a failure of the system is it?

[Tourer]

Originally Posted by Akrapovic

https://www.autosport.com/f1/news/re...rcar/10329509/

So this is where the Budget Cap falls down. Red bull just happened to have a brand new ground-effect hypercard, designed by their F1 team, ready for sale. So it's now extremely evident that Red Bull has skirted around the budget cap and has been developing outside of the F1 team.

Originally Posted by Akrapovic

Completely disagree. Because there's absolutely no way Williams and Haas, for example, are playing these sort of games. All this does is allow big teams to skirt around the regulations, where smaller teams are held to it.

Also, I'd argue "falls down" is completely correct. Have Red Bull spent more than the budget cap developing their car? Absolutely. So the rule has fallen down.

We can't say that RB has spent more than the budget cap "absolutely" any more than we can say the same thing for Mercedes, Ferrari, Renault, Aston - but there is the POSSIBILITY that those teams may have avoided the budget cap by using their other divisions - but that in turn depends on exactly how well the budget cap rules are written and policed.

It was only a few short months ago that there were suggestions that Mercedes in particular could skirt the budget cap and use other divisions to hide spend - but all those suggestions died away with the ordinary performance of the team so far this year.

The point that Horner's been making about budget cap adjustment is based on the inflation spike of recent times & I can see his point although I would have thought that any well-thought-through budget cap would have some allowance for inflation adjustment built in. If allowance such as that is not in the budget cap structure, it makes me question whether the structure is fit for purpose.

[Richard Casto]

Originally Posted by chillibowl

in fairness how much extra are they asking for?

lets say they are experiencing an extra 10% increase in (un)anticipated costs because of inflation...so that means what?

an extra 10-15mil over the cap that they are looking to access?

rules are rules so i agree they shouldn't get it (or it should come with such a penalty that they wouldn't bother taking it)...but its not a relatively huge amount not really a failure of the system is it?

I have not seen a specific value mentioned in any of the articles I have looked at. The financial regulations allow up to 5% overage without serious penalties kicking in. So it is expected that those teams with money will see how close to 5% over they can get.

The teams have talked up primarily the impacts to shipping costs, but sometimes other things as well (material, staff salary). I "think" I heard someone mention cost of utilities, travel, etc. But I think facility costs and travel/lodging for staff are excluded from the caps. So the question is... what are the "unplanned" increases. I think that is mostly shipping??? So how much of each teams budget is "shipping" and how much extra is that.

Frankly, I think the teams who could spend more than allowed will take whatever they can get and then adjust to that value. Including... no change to the caps. I will be frankly shocked if any of the large teams purposefully spend MORE than the 5% overage without being told they can. Imagine if Ferrari wins the WDC or WCC and spend OVER the 5% but RBR comes in second and spend under the 5% overage. Do you think Ferrari would come out of that unscathed? No. The next option is for the big teams to all overspend. But they would have to collude to do so. And even then, would they trust their peers to not screw them in the end (agree to overspend, then not overspend and then protest those who did overspend). And I am not sure if any type of collusion is legal (either in F1 or in general law) on something like this.

Richard

[VIVA GT]

Just a little sideways thought from me here. From what has been said it would appear that there are two (or maybe three, but I want to keep this simple) types of teams here; There are the big, wealthy teams who have budgeted to spent up to the prescribed budget cap (maybe already including the +5% tolerance), and other, smaller teams whose budget doesn't even reach that far.
The rise in costs due to inflation and whatever will have exactly the same percentage effect on ALL of the teams budgets, so why aren't the little guys whinging about it too?

[E.B]

Originally Posted by VIVA GT

Just a little sideways thought from me here. From what has been said it would appear that there are two (or maybe three, but I want to keep this simple) types of teams here; There are the big, wealthy teams who have budgeted to spent up to the prescribed budget cap (maybe already including the +5% tolerance), and other, smaller teams whose budget doesn't even reach that far.
The rise in costs due to inflation and whatever will have exactly the same percentage effect on ALL of the teams budgets, so why aren't the little guys whinging about it too?

Exactly right Viv..... the likes of Haas are working to a budget, one that happens to be below but close to the cap. The wealthier teams are having to make cuts from their previous budgets, as was the purpose and intent of the cap. They now say they cant meet that cap.

It seems the likes of Haas, when faced with inflationary items such as freight and overheads, have had to trim development costs to keep within their budget. They had to act in advance as soon as they became aware of increased costs over those allowed for in their budgets.

However, the wealthier teams have continued to develop and now find their expenditure, given the inflation aspect have or are likely to exceed the budget cap. In a nutshell it would appear they have been a bit more blasé about controlling their overall costs, with no (attempt at) trimming back to counter the cost increases.

[Casper]

Increasing the cap increases the ability of the top teams to widen the gap and there can be no other result of more money. Those teams that can't get funding to reach the present cap are simply going to go backwards which of course suits the teams that have the full funding to spend. The cap in essence achieves nothing in closing the gap IMHO especially if every time a team lobbies to increase it they get rewarded with more money. Horner & Wolfe are expert politicians when it comes to getting their views out there in the media and putting pressure on those who make the rules.