Salary cap, Shmalary Cap

[chillibowl]

Originally Posted by mogwai

Theatrics/political theater for sure but also, and perhaps easily viewed by the outside eye, development pace of some teams.

Maybe he's simply using educated speculation without inside details and adding a touch of unfounded spice to make it meme worthy?

def political theater...this may be my bias because i have been a fan of Totos but im still surprised he went down this path fully loaded. even when they have had issue with RB or an FIA test in the past he seems to be more reserved and data driven in his 'accusations'...at least publicly anyways.

his responses to alleged budget breaches seemed, to me at least, very out of character.

as always tho, im reading too much into sounds bites and loaded questions from the media.

[chillibowl]

Originally Posted by thetool

The reason for the delays is obvious, negotiations behind-the-scenes as to the extent of the reparations to be made. What is also clear I think, is that there will be no punishments that retrospectively affect the sporting outcomes either this year or last.

between the leaks, allegations, and delays it carries the appearance of impropriety. very F1 i guess.

and as im ranting, i also dont like the idea of certificates of compliance. its a bit too pass/fail for my tastes.

along the lines of lack of transparency in the sport (even tied into my thoughts on the publishing of driver salaries and/or driver payments to teams) but they should publish the amounts the teams have spent imo.

of course wait until the numbers are finalized before making any announcements but if there is a cap they should make it clear who spent what as there is even value in knowing how much below the target amount the other 8 teams were.

maybe they will share this info, the process is still new and i dont know what the certificates will say but its F1 so until they start addressing the lack of transparency, particularly when it comes to financial reporting, then im going to feel like they are undermining their own system.

either way though, im still going to watch!

[crmalcolm]

Originally Posted by chillibowl

if RB are only 100k over, Toto's earlier reaction seems absolutely over the top.

Was it? Here's what he said:

"And as far as we understand, there's a team in minor breach, which is more procedural, and another team that is fundamentally massively over and that is being still looked after. So that's an open secret in the paddock."

[chillibowl]

assuming that was the only thing he has said on the matter then yes...still over the top imo.

Originally Posted by crmalcolm

Was it? Here's what he said:

"And as far as we understand, there's a team in minor breach, which is more procedural, and another team that is fundamentally massively over and that is being still looked after. So that's an open secret in the paddock."

hes calling one team out for massively cheating and hes calling out the rest of the paddock for not talking about it publicly which to me implies an accusation of conspiracy or coverup.

a very loaded statement imo. of course we will all have different views on how that quote should be parsed though.

[Akrapovic]

That seems like a perfectly reasonable statement from Toto tbh.

[Mike Harte]

Originally Posted by chillibowl

assuming that was the only thing he has said on the matter then yes...still over the top imo.



hes calling one team out for massively cheating and hes calling out the rest of the paddock for not talking about it publicly which to me implies an accusation of conspiracy or coverup.

a very loaded statement imo. of course we will all have different views on how that quote should be parsed though.

All he's doing is saying what is being spoken openly by all the teams in the paddock, i.e, his opposite numbers in the other teams. And, if all that he said as is quoted above, he hasn't mentioned any potential team names.

The naming appears to be be journalists/reporters who are possibly just speculating!

[chillibowl]

Originally Posted by Akrapovic

That seems like a perfectly reasonable statement from Toto tbh.

Given that he is also an owner of AM I wonder if his fellow shareholders find it reasonable?

Seriously though, for my part I did not like it last year when Horner was calling Lewis out for trying to kill Max and I dislike Toto’s accusations of cheating before the process has even been completed. I would like to see more civility and less inflammatory comments from the team principles at least.

Imo both need a serious time out!

[Skam85]

Originally Posted by Akrapovic

That seems like a perfectly reasonable statement from Toto tbh.

And yet I wonder what the reaction would be if those words had come out of Christian Horner's mouth.

[chillibowl]

Originally Posted by Mike Harte

All he's doing is saying what is being spoken openly by all the teams in the paddock, i.e, his opposite numbers in the other teams.

openly is different than publicly no?

Originally Posted by Mike Harte

The naming appears to be be journalists/reporters who are possibly just speculating!

given thats what the media do then that in and of itself should highlight that making allegations with no names is an over the top (even irresponsible) thing to do because the media will do what they do...run wild it.

i assume he's got more than enough PR training to know this right?

[Tourer]

Originally Posted by Akrapovic

That seems like a perfectly reasonable statement from Toto tbh.

If that was all he said, I'd agree with you, but he also had more to say about Red Bull (seemingly after being told that Mr Horner had indicated that RB had no cap problems) - expressing surprise at what Mr Horner had to say and suggesting that Mr Horner needed to speak to his CFO more. Clearly implying that RB was one of the teams in hot water.

They're all as bad as each other on this stuff though - all happy to throw a bit of mud or alternatively play the victim.

I liked Ted's take on it in his post-race notebook from Singapore - described it all as a "Drive to Survive" storm - suggesting a storm in a teacup beat up for Netflix.

We'll all know next week where the actual facts sit - but no doubt there'll be more conjecture and maybe posturing / accusing in Japan this weekend.

[chillibowl]

Originally Posted by Tourer

Drive to Survive" storm

good one Ted.

[crmalcolm]

The context and order of comments is important here.

Firstly, let's assume Toto had the open secret and was informed that RB had breached the cap by a minor figure.

The media mentioned RB first, in a direct question to Toto about them being over the cap. They asked Toto about Horner claiming RB were under. Toto replied that Horner should speak to his CFO.

He then went on to state that one time had a minor breach, and one team a major breach.

The press, fans and Horner then all jumped on Toto's comments as being an attack on RB.

IF RB have breached the cap by $1, then nothing Toto has said is incorrect, or deflammatory [sic].

[Akrapovic]

Originally Posted by steve_r

Will people get as angry with Aston Martin as they were seemingly getting with Red bull?

No because if you cheat are and still suck, people are generally less angry than when you cheat to win.

This isn't the magic "gotcha" card that you're playing it as.

[bathurst77]

So RBR overspend was "within margin of error" , depends on how you count deduct offset etc. If a team is allowed to spend 140, but only spend 139 then they are leaving something on the table..

We expect drivers to drive at 10 10ths (hmm I might start a website..) we expect the pit crew engineers designers to push the limit of whats possible, so we should expect the bean counters to push it to the line. And like a driver going just a few mm over track limit and get the flag, the accountants over spent on pencils and computers.

No one will call it great management if the team prince says "we came close second, but had 10 mil to spare at years end."
If you have 10 million in the kitty, spend $9,999,999.99 on improvement somewhere, and come first.
But then an auditor says... no you cant deduct that expense, or you miscounted or similar.. so now your a shade over.

To me what is clear is that Toto must be a Soccer fan. Falls to the ground and screams if someone even finger-tip touches him, in hope for a penalty or to derail other teams work

[Akrapovic]

Originally Posted by bathurst77

So RBR overspend was "within margin of error" , depends on how you count deduct offset etc. If a team is allowed to spend 140, but only spend 139 then they are leaving something on the table..

We expect drivers to drive at 10 10ths (hmm I might start a website..) we expect the pit crew engineers designers to push the limit of whats possible, so we should expect the bean counters to push it to the line. And like a driver going just a few mm over track limit and get the flag, the accountants over spent on pencils and computers.

No one will call it great management if the team prince says "we came close second, but had 10 mil to spare at years end."
If you have 10 million in the kitty, spend $9,999,999.99 on improvement somewhere, and come first.
But then an auditor says... no you cant deduct that expense, or you miscounted or similar.. so now your a shade over.

To me what is clear is that Toto must be a Soccer fan. Falls to the ground and screams if someone even finger-tip touches him, in hope for a penalty or to derail other teams work

The maths is actually pretty simple.

if ( ammountSpend > ammountAllowedToSpend ) {
log("You cheated")
} else {
log ("You didn't cheat")
}

If the best argument for not being able to maths is they were too busy trying to fiddle the books and didn't get it right, then you should get 2 penalties - 1 for cheating, and 1 for being **** at it.

Numbers don't have grey areas. Unless you create grey areas for them to live in.

[peebee2]

Originally Posted by Akrapovic

The maths is actually pretty simple.

if ( ammountSpend > ammountAllowedToSpend ) {
log("You cheated")
} else {
log ("You didn't cheat")
}

If the best argument for not being able to maths is they were too busy trying to fiddle the books and didn't get it right, then you should get 2 penalties - 1 for cheating, and 1 for being **** at it.

Numbers don't have grey areas. Unless you create grey areas for them to live in.

Except, in the real world, it's not in any way so simple. You could work the same figures and get 10 different results quite easily.

For just one, quite simple, example, the FIA prescribe a value to a free or subsidised engine deal - but are all such works deals identical, in terms of spares, service or extras. One team could be showing much lower figures than another for essentially the same thing.

Also, for constructors supplying engines or controlled parts to other teams, how are the turnover and profit from those deals judged when considering the originators budget.

What happens when you, who by law has to operate in GBP for example, contracts to buy supplies in EUR and the exchange rate fluctuates? Or customs duties change?

There are endless examples like this.

The cap was brought in to drive down budgets. It has done this. Everybody involved knew all along there were going to be massive arguments. It's no surprise.

[Akrapovic]

Originally Posted by peebee2

Except, in the real world, it's not in any way so simple. You could work the same figures and get 10 different results quite easily.

Actually it is. Unless you deliberately make it complex then it's actually that simple. I work with budgets and spending daily. It only becomes difficult to track and trace if you want it to be.

Numbers are absolutes. It's people fiddling them about that makes it difficult. By saying "it's more complicated than that" all we're doing is making excuses for teams not doing things correctly.

This is literally where the term creative accountancy comes from. And saying "this is what we expected, it's no surprise" is such an F1 excuse. "We expected the bad thing to happen so its alright".

[peebee2]

Originally Posted by Akrapovic

Actually it is.

Broadly, perhaps.

Accurately, no way. Simplistic to think otherwise.

[PhilipR]

I do not know much about accounting practices however I do hope this is not becoming the norm where teams try to justify expenses through different accounting techniques and processes every year.

Maybe this being the first year is difficult but maybe from this they can standardise processes so everybody works to the same understanding

But let's wait and see until Monday. On MWM they said on Monday they will give out the certificates to the teams that have met the cap. So any team that has not will go to evaluation or court or whatever - so this might drag out for a few more months. Maybe we will have 2023 WDC sorted by the time this is through haha

[Anyopenroad]

It wouldn’t surprise me if Red Bull have found an interpretation of a cost clause which they have successfully argued is legit (like “any” not meaning “all”) but which other teams avoided because they believed the interpretation would be different. That would make Wolff furious. I think he is a very good chief exec but I don’t think he is very imaginative.

[steve_r]

Originally Posted by Anyopenroad

It wouldn’t surprise me if Red Bull have found an interpretation of a cost clause which they have successfully argued is legit (like “any” not meaning “all”) but which other teams avoided because they believed the interpretation would be different. That would make Wolff furious. I think he is a very good chief exec but I don’t think he is very imaginative.

That is what F1 is often about is when it comes to car / engine design. So if they introduce new financial limits with their own set of regulations, the teams are going to apply the same mindset that they have always done with the technical regulations and try to find ways to exploit or interpret rules to their own advantage.

[Richard C]

Originally Posted by Akrapovic

The maths is actually pretty simple.

if ( ammountSpend > ammountAllowedToSpend ) {
log("You cheated")
} else {
log ("You didn't cheat")
}

If the best argument for not being able to maths is they were too busy trying to fiddle the books and didn't get it right, then you should get 2 penalties - 1 for cheating, and 1 for being **** at it.

Numbers don't have grey areas. Unless you create grey areas for them to live in.

I appreciate the spirit of this view. And I think various versions of this (with different logic) will be applied by most fans. But the problem is the rule books (technical, sporting, financial) are not written this way. They broadly offer up both rules and penalties for infractions. Especially when the infractions can be quantified. And when looked at in total, it is a broad spectrum of penalties from minor wrist slaps to championship exclusion (and maybe more)

I think this binary idea of "cheat" or "no cheat" is purely a fan creation and a game that the fans play (I do as well). We can probably say that whatever is going on with the 2021 financial certifications sits somewhere between Lewis' nose jewelry infractions and Spygate. If rumors (minor infractions per the regulations) prove to be true, the anticipated penalties are generally defined and the outcome should fit within a specific framework. Of which I think the larger issue will be more around the PR side (embarrassment and/or need to do damage control/spin).

If we want to just use the "cheat" or "no cheat" label for any an all infractions, then no doubt everyone is guilty of something. Everyone is a cheater! Lewis' above mentioned jewelry infraction as one example.

Richard

[AnnoyedMoose]

Originally Posted by Akrapovic

The maths is actually pretty simple.

if ( ammountSpend > ammountAllowedToSpend ) {
log("You cheated")
} else {
log ("You didn't cheat")
}

If the best argument for not being able to maths is they were too busy trying to fiddle the books and didn't get it right, then you should get 2 penalties - 1 for cheating, and 1 for being **** at it.

Numbers don't have grey areas. Unless you create grey areas for them to live in.

If only life was so simple.

The financials of any large organisation are very complex and it gets to the stage where it boils down to negotiation between the company, the auditors and the relevant tax office as to how much tax to pay.

If they try to pin it down to the last few hundred thousand dollars every time people would be tied up in knots for years trying to work it out.

The cost cap will be no different for a few years to come as both sides work out what is and isn't covered.

[Anyopenroad]

"Everyone should pay the tax they owe on their income"

Please define "everyone", "pay", "tax", "owe" and "income".

This stuff keeps entire professions in constant demand .

[Adam43]

The situation is somewhere in between.

It is not so complicated and opaque that this is not possible. It also does not have to be perfect, just good.

I would say it is easier for people to deal in absolutes (listen to talk radio, actually don’t), so because things might not be perfectly simple some say it doesn’t work and use as a reason to not do something. Should we not have any taxes because you can’t perfectly (easily) assess everyone’s tax. No.

Equally you need to make sure you don’t treat it as simple. There is enough transparency to make it work.

Take the Sarries rugby example. Simply, the player salaries were under the cap, but look a bit deeper and you see they got a lot of benefits and other work out of it. It was quite clear in the end this was a breach.

They even got warned one year, and then did worse later.

Even if we end up with a “hmmm, not really right that is it, don’t do it again” we have a win with the budget cap. As it gets better and better.

Dealing in absolutes? That won’t go down well.