[Team] McLaren - can they compete?

[Richard C]

Originally Posted by peebee2

No consideration is provided to an individual is your answer.

Yes you are right. The regulations also call out what "Considerations" means. And the exclusion generally uses the phrase "cost of Considerations". Of which it is to a person. So that is why the exclusion is "person" based and not an entire company that might be providing services. Plus the Considerations section calls out both employees and non-employees. Nothing in the call out for the three who are excluded says they must be employees.

Again, where am I wrong?

Richard

[Richard C]

Originally Posted by chillibowl

to add to this discussion, Horner talking about having to replace staff due to cap restrictions and concern about the risk of it becoming 'a race to the bottom'.

while he certainly has a valid point, the moving of top level talent to other teams (ostensibly smaller teams not operating at the edge of the cap) could also be seen as a positive for F1 as ideas may now spread more quickly down the grid hopefully resulting in an overall healthier grid?

https://www.motorsport.com/f1/news/r...-cap/10482536/

“Rob was as focused on other projects in recent years, and the offer that McLaren made is probably half their cap! So you can't blame him for wanting to go and do that.”

“You have to make sure it's not a race to the bottom,” he said. “The problem is you have long-standing personnel that have contributed a significant amount that you don't want to see forced out of their roles because of the cap, just because you can justify 10 youngsters versus an experienced hand.

Interesting article. I was reading it and was going to drop in that same last quote. My take on that is... If you can replace one person with 10 less experienced people, get the same quality and amount of work and do it for less... Someone is being overpaid already!

I can only speculate, but I can imagine that to some degree, F1 is one of those industries in which those at the bottom of the pyramid might actually be paid less than market value while those at the top are well compensated, maybe overly compensated. That is because there is a level of (not sure of the word)... "status" to be working in F1. I know that in other industries such as fashion, or video game design, if you are in a lower level position, you can be treated like a dog because you are just "lucky to be there" and you have to "pay your dues" before you reap any financial benefits. Also, these types of industries have a heavy "lifestyle" component which ends up being part of the non-financial "compensation".

Anyhow, I digress. I think it is not a race to the bottom, but for the well funded teams a race to someplace lower than where they have been. I think this is just pain that is felt by those who previously had effectively unlimited budgets and could generally buy whoever they want.

I DO think this will deflate the earning potential of many of the lower top tier. Those who are not in the top three who are excluded, but those just below them. Those folks will likely feel extreme pressure to move elsewhere in which they might end up higher on the food chain than where they might currently be. Also, for the teams who are moving some employees into "non-race" positions and then counting only a percentage of their time toward cost capped activities, I can imagine that might not be exactly what they want to do. So they might see a position in another team that promises full time race related positions attractive.

Richard

[Richard C]

Originally Posted by peebee2

And, Chilli, the Team Principal is excluded separately anyway…

I know I am appearing to be confrontational with the qty of posts. But where does it exclude compensation for the Team Principal? As best as I can tell, there is none.

Chili, to your question. My understanding is that it is not a set list of "who" or that the team even gets to pick. I think they just order the compensation from highest to lowest and the top three are excluded regardless of who they are (note there are exclusions for the drivers, HR expenses, etc. the focus on accounting for the compensation for the people is about who "makes the car go fast" not the company overhead). Now... I think there is an expectation that each position should be getting some type of fair market wage. So otherwise everyone might be getting compensated outside of F1 and then taking $1 for their salary and that means money can be spent elsewhere. I think the same applies to parts. You can't have an internal supplier sell you parts on the cheap and the supplier eats the true costs.

Richard

[Richard C]

Sorry for the machine gun posts. I am not an attorney or an accountant. So I could be getting some of this stuff wrong. But I tend to be a bit of a Anorak when it comes to F1 regulations. So I just read them and try to understand them. I am open to being wrong. But I would like someone to say "why" I am wrong vs. "it doesn't work the way you think it works". I think insiders are just as likely to get some of the esoteric details wrong as the next guy unless it is areas in which they are the experts.

Richard

[peebee2]

Originally Posted by Richard Casto

Yes you are right. The regulations also call out what "Considerations" means. And the exclusion generally uses the phrase "cost of Considerations". Of which it is to a person. So that is why the exclusion is "person" based and not an entire company that might be providing services. Plus the Considerations section calls out both employees and non-employees. Nothing in the call out for the three who are excluded says they must be employees.

Again, where am I wrong?

Richard

They’ll have literally dozens of suppliers of which, technically, AN is one.

You’re overthinking a lot to be honest.

[Richard C]

Originally Posted by peebee2

They’ll have literally dozens of suppliers of which, technically, AN is one.

Is there a point you are trying to make?

Richard

[Richard C]

Originally Posted by peebee2

You’re overthinking a lot to be honest.

I can imagine from your perspective I am putting more thought into this topic than you might be.

I think I am done here as there is no need for a two person discussion on a group forum.

Richard

[peebee2]

Originally Posted by Richard Casto

Is there a point you are trying to make?

Richard

Only that you seem to want to suggest a team should be allowed to differentiate between different suppliers/contractors for the budget cap which makes no sense at all, especially when the rules are actually clear.

[crmalcolm]

We are way off the topic of McLaren here - but for the record:

Payments to Newey (salary or contract) were never the reason for breaching the budget cap.
The final findings were that 13 misinterpretations of the regulations were identifed.
The major issues were:


A tax payment.
The FIA noted that “if RBR [Red Bull Racing] applied the correct treatment within its Full Year Reporting Documentation of RBR’s Notional Tax Credit within its 2021 submission of a value of £1,431,348, it would have been considered by the Cost Cap Administration to be in compliance with Article 4.1(b) of the Regulations and therefore RBR’s Relevant Costs for the 2021 Reporting Period would have in fact exceeded the 2021 Cost Cap by £432,652 (0.37%).”


Catering
“Catering within Red Bull has always been a benefit that’s been provided by the group,” he said. “It’s a benefit of working within the Red Bull group that free food and beverage has always been provided. Therefore, as something of a Red Bull policy, we viewed it as an excludable cost. Aggressive, but we felt acceptable.

“The FIA took a different viewpoint on that and said that food was not excludable. Fair enough. But what was included was the entire catering bill of the entire company. So £1.4 million worth of food, drink, coffees – any of you [media] that attended Milton Keynes during the last 12 months have contributed to our overspend. Red Bull Powertrains have nothing to do with Red Bull Racing, its activity this year the costs are included. So there’s a difference of opinion on how that was applied.”


Sick Pay
“We felt that the sick pay, because the role played no function in the grand prix team for a period of eight months, was an excludable costs. Unfortunately, the regulations can be interpreted in two ways.”


Salary of departing personnel
“We had a senior member of staff on a fixed-term contract, that was offered a Hollywood-style offer from another team, and at that point, you can see that their heart and mind is not within your company. And so they were transferred from the Formula 1 activity into our Advanced Technology activity which is currently designing the RB17 [road-going hypercar] and America’s Cup projects amongst a myriad of other projects.
“The individual then left the company from there but the time that he was spent not in the Formula 1 activity was included in the cap. So again, something that we vehemently felt was an excludeable costs.”


On the 28th October:

The FIA releases details of Red Bull’s breach, finding the team overspent in four main areas amounting to a total of $5.8m, which after the $4m under-submission created an overspend as follows:

• Internal costs incorrectly booked for severance payments and sick leave
• Overspend on catering costs which should have been split into F1 departments and other
• Incorrect allocation of development and excess parts
• Tax rebates for research and development, also outside the cap if correctly accounted for
• Clerical errors pertaining to charges booked to Red Bull Powertrains (which is outside the cap)

[peebee2]

Originally Posted by crmalcolm

We are way off the topic of McLaren here - but for the record:

Payments to Newey (salary or contract) were never the reason for breaching the budget cap.
The final findings were that 13 misinterpretations of the regulations were identifed.
The major issues were:


A tax payment.
The FIA noted that “if RBR [Red Bull Racing] applied the correct treatment within its Full Year Reporting Documentation of RBR’s Notional Tax Credit within its 2021 submission of a value of £1,431,348, it would have been considered by the Cost Cap Administration to be in compliance with Article 4.1(b) of the Regulations and therefore RBR’s Relevant Costs for the 2021 Reporting Period would have in fact exceeded the 2021 Cost Cap by £432,652 (0.37%).”


Catering
“Catering within Red Bull has always been a benefit that’s been provided by the group,” he said. “It’s a benefit of working within the Red Bull group that free food and beverage has always been provided. Therefore, as something of a Red Bull policy, we viewed it as an excludable cost. Aggressive, but we felt acceptable.

“The FIA took a different viewpoint on that and said that food was not excludable. Fair enough. But what was included was the entire catering bill of the entire company. So £1.4 million worth of food, drink, coffees – any of you [media] that attended Milton Keynes during the last 12 months have contributed to our overspend. Red Bull Powertrains have nothing to do with Red Bull Racing, its activity this year the costs are included. So there’s a difference of opinion on how that was applied.”


Sick Pay
“We felt that the sick pay, because the role played no function in the grand prix team for a period of eight months, was an excludable costs. Unfortunately, the regulations can be interpreted in two ways.”


Salary of departing personnel
“We had a senior member of staff on a fixed-term contract, that was offered a Hollywood-style offer from another team, and at that point, you can see that their heart and mind is not within your company. And so they were transferred from the Formula 1 activity into our Advanced Technology activity which is currently designing the RB17 [road-going hypercar] and America’s Cup projects amongst a myriad of other projects.
“The individual then left the company from there but the time that he was spent not in the Formula 1 activity was included in the cap. So again, something that we vehemently felt was an excludeable costs.”


On the 28th October:

The FIA releases details of Red Bull’s breach, finding the team overspent in four main areas amounting to a total of $5.8m, which after the $4m under-submission created an overspend as follows:

• Internal costs incorrectly booked for severance payments and sick leave
• Overspend on catering costs which should have been split into F1 departments and other
• Incorrect allocation of development and excess parts
• Tax rebates for research and development, also outside the cap if correctly accounted for
• Clerical errors pertaining to charges booked to Red Bull Powertrains (which is outside the cap)

You're miles off as usual sadly.

Yes, they failed on the above once AN had been put back in the figures and the third highest paid employee taken out. Before they did that they failed on AN and food.

[crmalcolm]

Originally Posted by peebee2

You're miles off as usual sadly.

Yes, they failed on the above once AN had been put back in the figures and the third highest paid employee taken out. Before they did that they failed on AN and food.

Miles off - but you admit that is what they failed on?
Your explanation does not make sense. How can they fail on AN before they include him in the figures? Are you saying that an initial submission with AN as a 'top three earner' still exceeded the budget cap?

I'll refrain from attacking the poster - just leave the link to the [Official] ABA here - https://www.fia.com/sites/default/fi...cle_6.32_1.pdf

The ABA refers to all of the breaches I referred to previously.

If you have any evidence to the contrary (other than the speculation that originated from Ziggo Sports) then please, for the sake of preventing this becoming another 'I know something you don't' discussion, please provide it.

[Richard C]

Originally Posted by crmalcolm

We are way off the topic of McLaren here

Agree. Can a moderator consider moving all of these recent posts (which are off topic for this thread) to the 2022 Cost Cap thread? https://tentenths.com/forum/showthread.php?t=157449

If this discussion involves more than just me and Peebee2, then I would jump back in, but not as to continue it as off topic here.

Richard

[V8 Fireworks]

In any case, McLaren's original interpretation of the cost cap was supposedly far too conservative so they were losing out on useful hours and employee numbers to all the other teams, not just Red Bull. [E.g., billing things to the cost cap that can otherwise be moved to things like administration while only engineering hours on the car go to the cost cap, engineering employees spending most of their time working on "special projects" with only their F1 work billed to the cap etc.] So that has been rectified.

[Skam85]

Anyway Mika Hakkinen reckons that McLaren will be challenging RB soon so that's funky.

[S griffin]

Originally Posted by Skam85

Anyway Mika Hakkinen reckons that McLaren will be challenging RB soon so that's funky.

Well they've got Rob Marshall and we are seeing how well Aston are doing with an ex Red Bull engineer

[bathurst77]

I think all the teams can take heart from AM-F1.
For years under various names, they have been reliable mid-rear team. Suddenly this year a few factors fell into place and they are regulars on the podium and surely will stand on the top step this year, maybe this weekend.

So yes McLaren or even Williams could come out of no where next year.. or the one after.. or

[peebee2]

Nice thinking but Williams package is generations behind. Mind you, chuck enough money at it and who knows…

[S griffin]

McLaren have done good to get both cars in the top 10, even if it was helped by the weather. Let's see if they can hold on in the race

[V8 Fireworks]

Originally Posted by bathurst77

I think all the teams can take heart from AM-F1.
For years under various names, they have been reliable mid-rear team. Suddenly this year a few factors fell into place and they are regulars on the podium and surely will stand on the top step this year, maybe this weekend.

So yes McLaren or even Williams could come out of no where next year.. or the one after.. or

True. On the other hand the impetus for both Aston Martin and Red Bull Racing improving was rich benefactors/owners/parent companies. Whereas McLaren and Williams (and indeed Lotus) always relied on external sponsorship and the support of auto makers supplying (free) works engines (and sponsorship).

So on this basis, Audi Sauber seems better placed to improve than McLaren or Williams. Indeed, last time BMW injected a huge amount of money into Sauber and this similarly resulted in considerable improvement... Money that could have gone to Williams, save for Williams refusing to sell to BMW and become BMW but rather remain an "independent garagiste".

Similarly Mercedes injected a huge amount into Brawn GP instead to McLaren, because McLaren refused to sell (and/or because McLaren offended Mercedes with "spygate").

These days Red Bull Racing have the best of both: both a wealthy benefactor and a car that is plastered with sponsors from end to end (like the Williams of the 90's: Labatt's, Canon, Sega, Mobil 1, Camel et al.) whereever the decals will fit in true garagiste spirit. Although the benefactor does lose a huge amount of money on Scuderia AlphaTauri though...

[Mike Harte]

An article in Autosport and sister mag Motorsport has surprised me in that after 12 years, McLaren is to stop using Toyota's wind tunnel in Cologne as it starts using it's own new tunnel at Woking.

The surprise to me is that McLaren hasn't had a modern functioning tunnel for all these years; if it had been, say, Haas or Sauber, I could have understood but not the Woking outfit with all their modern and very expensive facilities.

Here's the article: https://www.motorsport.com/f1/news/t...deal/10506135/

[veeten]

Here's something to think about...

Even though they will be ending their use of TGR-E's wind tunnel, McLaren will still be partnering with them for other technical and engineering work.
It also makes me wonder, with RBR moving to Ford in'26, Haas doing a deal with Alfa Romeo, and StrollF1(may as well, as the divestiture of Aston Martin from F1 is ongoing) has made a deal with Honda, when is that present supply deal with Mercedes supposed to end?

[Greem]

Originally Posted by Mike Harte

An article in Autosport and sister mag Motorsport has surprised me in that after 12 years, McLaren is to stop using Toyota's wind tunnel in Cologne as it starts using it's own new tunnel at Woking.

The surprise to me is that McLaren hasn't had a modern functioning tunnel for all these years; if it had been, say, Haas or Sauber, I could have understood but not the Woking outfit with all their modern and very expensive facilities.

Here's the article: https://www.motorsport.com/f1/news/t...deal/10506135/

Blimey. I thought one of the points of building and moving to Dennis Towers was so they had their own incredibly fancy super-modern wind tunnel tucked away and it used the lake for cooling & damping?

Somewhere along the way I missed the fact it wasn't good enough.

[Mike Harte]

My exact thoughts, Greame.

[V8 Fireworks]

Originally Posted by Greem

Blimey. I thought one of the points of building and moving to Dennis Towers was so they had their own incredibly fancy super-modern wind tunnel tucked away and it used the lake for cooling & damping?

It was an incredibly fancy super-modern wind tunnel when the McLaren Technology Centre was built. In 2004, 19 years ago.

Times move fast in Formula One and in a stroke of Ron Dennis genius the McLaren Technology Centre was designed in such a way that significantly upgrading the wind tunnel was difficult to impossible. I.e., there was no provision for making the working section and therefore the entire ductwork circuit larger.


As you can appreciate, wind tunnels are big! Especially when they now need to have space for a turntable for testing 60% models at up to 15 degrees while not having detrimental blockage effects. Not the case for the smaller 50% models which were tested in a straight-line only back in 2004 (which allowed for smaller working sections).

Over the 10's, McLaren of course did not have the capital to build a new wind tunnel, as capital was prioritised towards the McLaren road car division. The new wind tunnel has now been constructed in a separate, rather more plain and rectangular, building which should make keeping it up to date easier.

PS. The Ferrari wind tunnel lives outside where it can be easily modified. I'm not sure putting a wind tunnel in the middle of an office and workshop building is a good idea by way of comparison:




Even though it was designed by Pat Fry circa 2012, it also has become out-of-date and has recently been upgraded again too.

[Richard C]

Interesting comments from Lando a few days ago regarding the character of the 2023 car and how while vastly improved still requires him to drive it in a way that doesn't fit his style.

https://www.motorsport.com/f1/news/n...tyle/10507078/

He also says that Oscar and even DR from last year has provided similar feedback. The article provides more details as the issues, but he calls out the car likes straight lines and that includes a strength of braking in a straight line. But it sounds like he would prefer to follow a smoother entry and exit from a corner. It also sounds like the car doesn't like trail braking? He has to use a more "V" vs. "U" shaped path through (I assume low speed) corners.

Richard