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Ruslan

Under New Management

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14 January 2018   13:38 (CET)

Todt: Budget cap alone will not be F1’s saviour

True Mr. T

Not everyone, but some of us on the sidelines knew this all alone.

Quote

(Todt) We need to make regulations which will have some impact on the actual costs.

Of course, and it is precisely reason why I have been arguing for ages - blue in the face - that budget cap as a sole measure is not only unnecessary, but most likely costly and ineffective. Suitable (denotes in support of uncomplicated racing vehicle) technical regulations are self-policing and adjusting, without need to fill pockets of British lawyers (solicitors/barristers) and accountants. 

Big question is:

Those who want complicated, unique to F1 DNA stuff raise the hand!

Opposed (something for 100MM)...? RBR, McLaren, anybody else..?

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Back on the board. Been busy with Christmas and hockey. Not really much to catch up on.....I gather the next big decision will come this Thursday. So....just a few comments:

 

1. I gather there is still some debate over 4 or 3 engines for next year. They should probably back off and compromise at 4. I don't think it will hurt the racing.

2. Engine regulations for 2021: I gather this won't be resolved this Thursday. I guess it does not need to be. Will be a long-running fight I fear.

3. Ferrari quitting F1: This is part of the negotiations over purses, engine rules, special payments to Ferrari, etc. Suspect it will all get resolved at some point.

4. Pay for TV: Very bad trend. How does one draw new audience to F1 with pay-for-TV? Boxing is now the big pay-for-TV sport here. How is that working?

5. Marketing U.S and China: Well....that makes sense now doesn't it.

6. Budget cap: I gather it is coming, and at a fairly low level ($150 Million). Sort of surprised that they don't start a little higher (like $240). Also, curious as to what is covered in the budget cap and more interesting, what is not covered.

7. Prize fund distribution and special Ferrari payments: Not sure if this will get resolved this Thursday.

 

Anyhow, the race season is just around the corner. I guess they need to nail down a few rules issues and changes this Thursday.

 

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Just a few comments as you say Rusian, but very interesting, especially your points regarding numbers 1, 3, 5, 6, and 7.

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Well, was hoping to hear some news today about some of the upcoming changes....but nothing yet.

Anyhow, at one point they were talking about making the budget cap "not enforced" for the first year......which I guess means that everyone initially tries to live with it, and then if Mercedes, Ferrari and Red Bull aren't competitive enough, they can start spending like sailors. Not sure this is a great approach.  

 

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Well, I gather nothing got accomplished in the Thursday meeting. Apparently Ferrari used its rule veto over a suggested front wing. So...please tell me again how in a competitive series of 11 teams, why one team has the right to veto rules?

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I actually don't think that is true. Certainly there are a lot of Ferrari fans in Italy, but I don't think from my observations that the majority of fans in the U.S. or UK would quit F1 if Ferrari was not there. Losing Ferrari would certainly hurt F1, but I doubt it would cripple it.

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9 hours ago, Ruslan said:

I actually don't think that is true. Certainly there are a lot of Ferrari fans in Italy, but I don't think from my observations that the majority of fans in the U.S. or UK would quit F1 if Ferrari was not there. Losing Ferrari would certainly hurt F1, but I doubt it would cripple it.

I don't think that what matters is the number of Ferrari fans, IMHO Bernie clarified why Ferrari matters so much to F1 when he said that for Mercedes beating Ferrari is a great achivement and it generates positive hedlines than in turn help them sell their cars, if they were to beat Sauber, say, it would be seen a lesser achievement and therefore it would have a lower impact

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3 hours ago, Publius Cornelius Scipio said:

I don't think that what matters is the number of Ferrari fans, IMHO Bernie clarified why Ferrari matters so much to F1 when he said that for Mercedes beating Ferrari is a great achivement and it generates positive hedlines than in turn help them sell their cars, if they were to beat Sauber, say, it would be seen a lesser achievement and therefore it would have a lower impact

As stated, this is precisely a reason (methinks) for permanent fundamental incompatibility between Tier 1 and Tier 2 in the F1. So much was clear as soon automakers returned as team owners to racing, bar Ferrari of course which has never left series (yet). BE understood that dynamics, and adopted pragmatic point of view how to cope with this dilemma, which LM now insist dismantling. It is my deeply rooted view, that regardless of rhetoric, MB was never really interested to fight with and defeating Williams (and alike) in a sporting arena. They are not their peers and competitors in road car business, whereas making mincemeat out of BMW, Audi, Ferrari, and others has nice ring to it, and that's where fight is real. Mercedes AMG label is little more than just mere coincidence. Most of us know what AMG is to MB (check SC). I think this will never change, regardless what LM will, or will not do. Honda, Renault, and Ferrari are the same. I do recall distant past how Honda at one point painted Acura red, and began luring potential Canadian customers with a scene in which Acura was easily mistaken for Ferrari with its look and performance, but so much less expensive (so, buy us!). Fight is among automakers, and there should have been a separate series for them many years ago, a plan which did not go down well with FOM. Today it is not so clear yet whether that new series is in the cards, or perhaps E-cars is the NEW (distant) future. 

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There is still a certain cache to winning an F1 championship, regardless if Ferrari is competitive or not. Keep in mind that Ferrari was not really that competitive for extended periods of F1 history (1965-1974, 1984-1995, 2009-present).

  • 1965-1974 - 13 wins over 10 seasons, team was runner-up three times.
  • 1984-1995 - 17 wins over 10 seasons, team was runner-up four times.
  • 2009-2017 - 20 wins over 9 seasons, team was runner-up three times.

F1 seemed to continue to grow during all those periods of Ferrari drought.

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9 hours ago, Ruslan said:

There is still a certain cache to winning an F1 championship, regardless if Ferrari is competitive or not. Keep in mind that Ferrari was not really that competitive for extended periods of F1 history (1965-1974, 1984-1995, 2009-present).

  • 1965-1974 - 13 wins over 10 seasons, team was runner-up three times.
  • 1984-1995 - 17 wins over 10 seasons, team was runner-up four times.
  • 2009-2017 - 20 wins over 9 seasons, team was runner-up three times.

F1 seemed to continue to grow during all those periods of Ferrari drought.

I think that the point is that the presence of Ferrari in itself gives some credibility to F1, if Ferrari goes I think that it's fair to say that F! will turn into something very different, whether it's good or bad I don't know. Also please consider that for at least 2 of those periods Ferrari had a chance of catching up and win again (and let's not forget that during the first such period Ferrari's focus was sports car racing), in the good old days Ferrari was a very big organisation by F1 standards and had the muscle of a very big an healthy car manufacturer behind them, nowadays they are a small operation when compared to Mercedes and can no longer drain resources from FIAT. Furthermore Ferrari has been listed, so either they find a way of keeping competitive or they will walk out. I personally think that the opther teams always had the chance of blocking Ferrari's special treatment, if they chose not to it's not because they are kind hearted but because they had and still have an interest in Ferrari being in F1 and whatsmore in Ferrari being competitive

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There is no question that F1 would be seriously hurt if Ferrari left. But, F1 has lost a lot of legendary teams (Alfa Romeo, the first Mercedes Team, Maserati, Cooper, BRM, Lotus, Tyrrell and Brabham come to mind). F1 would survive.

On the other hand, I do think this discussion is "academic" as I don't believe F1 would go so far as to drive Ferrari out or that Ferrari would actually quite. They may not have the coziest of relationships, but they do need each other. Just as the presence of Ferrari gives some credibility to F1, its presence in F1 gives some credibility to its super car line. Lots of different super cars out there these days....but only one production line are Ferraris. 

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Chase Carey (Liberty) is still talking about budget caps:

See: https://www.gpguide.com/news.aspx?articleid=MXwwMy8wNi8yMDE4IDAwOjAwOjAwfENhcmV5IGFkbWl0cyB3YW50aW5nIEYxIGJ1ZGdldCBjYXA

A few quotes:

Carey said: "I don't want to talk about numbers here, but for a budget limit, you need rules and then consequences for trying to cheat.

Carey said Ferrari and Mercedes are "extremely important" to formula one, but the most important consideration is to produce "happy fans".

"Everything else is secondary," he said.

"I want a healthy sport for the fans but also for the teams," Carey continued.

"My goal is for new teams to enter formula one -- both private individuals and large manufacturers.

"It's a fact that nobody wanted to buy Manor -- not even for a dollar. That cannot be. There must not be a team that nobody wants to buy," he said.

 

 

Anyhow, Carey did not discuss a specific figure for the budget cap, but the rumored figure is $150 million. That seems a little low, even to me.

 

 

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Actually, I think the first priority is to grow the sport. I sort of get the feeling that the Bernie Eccelestone model was reaching its natural limit (there are only so many rich egotistical potentates in this world and he has already probably maxed out the market on 70-year olds with Rolexes). I think he does really need to get F1 back to a sustained growth and drawing in a new younger audience (how many people on this board are under 30?). It the long term, that will make more money for his shareholders.

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1 hour ago, Ruslan said:

Actually, I think the first priority is to grow the sport. I sort of get the feeling that the Bernie Eccelestone model was reaching its natural limit (there are only so many rich egotistical potentates in this world and he has already probably maxed out the market on 70-year olds with Rolexes). I think he does really need to get F1 back to a sustained growth and drawing in a new younger audience (how many people on this board are under 30?). It the long term, that will make more money for his shareholders.

maybe I'm cynical but my take on this whole saga is that Carey wants control over the teams or their brand (hence the idea about franchises) so that he can have total control over the sport and in turn make more money. I don't blame him for wanting to make money, that's his job, I think that he has taken a risky path

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4 hours ago, Publius Cornelius Scipio said:

maybe I'm cynical but my take on this whole saga is that Carey wants control over the teams or their brand (hence the idea about franchises) so that he can have total control over the sport and in turn make more money. I don't blame him for wanting to make money, that's his job, I think that he has taken a risky path

Yea, I'm not seeing that. On the other hand, there was a time (1980s) I was completely behind FOCA and Ecclestone.

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I simply do not understand how a budget cap could work. You can move money around in so many ways that the administrators of the sport have absolutely no way of controlling. And you can buy services and parts cheap from firms under the control of the owners of the team in some far out commercial relation. It would only add an absurd layer of economical speculation, transactions and financial acrobatics onto the sport. The rich guys will be able to go around any rules, I fear. The small teams would not have the same possibilities.

Take Mercedes. The way I understand it, they use expertise from their whole corporation. How do you make sure they don't go into some office in the same building and have somebody outside the racing team do a series of calculations or something like that without registering as a cost to F1?

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8 March 2018, 07:47 - Budget

Policing is one issue, and good only for beancounters or auditors, and of course it will not be free. Its big waste of money on non-productive resources. Its too much to control. A well known US corp. used in the past supplier base counted in thousands (from credible source). After debacle of 2009 push was to cut it down to 2000. I don't know whether they succeeded, but point in this is, F1 car is compiled supposedly from some odd 88000 components, but how do you control that without making a std. car version for all, go and make sure that you do not run over budget in August, and if so, then what? Punishment on the grid - move back 385 positions for 6 races or sitting on the bench instead?  

Take an x-team this season, as they will probably need to spend money in places which could be categorized as repeated development and that will cost dearly. Should they write a season off, or run over budget? 

Concerns of this kind were raised many times in the past, yet I am yet to hear one sensible solution which would resolve it to everyone's satisfaction. One must not forget that when you resolve how to put lid on testing, materials, etc., you cannot resolve imbalances in strength of the engineering teams. Those having some brains on staff will do well, others will be not so well and will need to experiment and redevelop some more. So, at the end, what's good about it? People who do suggest imposition of budget possess various motives, ranging from willful or ignorant, but non of such "solutions" will be healing class differences that exist. F1 is not for everyone, and if you want IRL 2, then make it so, but do not call it F1.

Again - spending is proportional to complexities of technical regulations. Letting technology mature and stable for x-amount of years is best way to keep cost down. 

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10 hours ago, Robert Rick said:

I simply do not understand how a budget cap could work. You can move money around in so many ways that the administrators of the sport have absolutely no way of controlling. And you can buy services and parts cheap from firms under the control of the owners of the team in some far out commercial relation. It would only add an absurd layer of economical speculation, transactions and financial acrobatics onto the sport. The rich guys will be able to go around any rules, I fear. The small teams would not have the same possibilities.

Take Mercedes. The way I understand it, they use expertise from their whole corporation. How do you make sure they don't go into some office in the same building and have somebody outside the racing team do a series of calculations or something like that without registering as a cost to F1?

I agree, I believe that something needs to be done to curtail the spiralling costs of running an F1 team, and a budget cap is an answer to that problem, I personally share your fear re the practical side of things. I personally believe that rules consistency could help, especially with the engines. For the aero side of things, since they don't add much to the show and are a significant source of costs I'd limit aero as much as possible. Also the testing ban is silly, it stifles competition because it basically prevents the challengers from catching up the incumbent, so why don't they come up with (many) more testing sessions officially arranged by the FIA? Let's say 6 testing sessions during the winter, and at least a 3 day testing session each month during the race season at a venue close to where they went racing the last time around? sims are very very expensive, and they don't add anything to the show. A testing session at a track where they don't host a race could bring new spectators in, and maybe they could even make some money, back in the "good old days" when they did a lost of testing at Imola it used to be free during the week, and on the saturday, usually the last day of testing when most teams would try to set a decent time, you had to pay 10.000 lire, it's about 5 euros in today's money, it was usually packed since everyone was trying to impress the viewers with their strong times, I know for a fact that with this system they paid all the costs for the whole testing session, and they made a lot of fans happy

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8 March 2018, 14:35

BROWN: I AGREE WITH SERGIO MARCHIONNE

Say what? I thought that I am the only one who doesn't understands LM's vision (if any) where the sport should be, and now this came up.

Quote

Brown told reporters in Barcelona, “I agree with Sergio Marchionne, who is vocal at this time: we need to see the vision put on paper to the teams.

Road to nowhere, LM style? How they can talk about keeping anyone in the sport without that having some dimensions, road to go on, and a compass? Slogans about budget etc. sound pretty hollow. 

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5 hours ago, Sakae said:

8 March 2018, 14:35

BROWN: I AGREE WITH SERGIO MARCHIONNE

Say what? I thought that I am the only one who doesn't understands LM's vision (if any) where the sport should be, and now this came up.

Road to nowhere, LM style? How they can talk about keeping anyone in the sport without that having some dimensions, road to go on, and a compass? Slogans about budget etc. sound pretty hollow. 

Another quote from that story: "Marchionne said earlier this week, “In an ideal world, I would imagine Formula 1 with control tyres along with set engine specifications and for everything else I would free up the rules.”"

I think that is the right way to go. No budget cap which simply can't be administered even remotely fair anyway. No aero- or active suspension restrictions - that will make the cars look way sexier than today. Moveable aattachments/body parts allowed - it would look so cool to see the wings change and body work rearrange in succession whenever 22 cars approach a turn together and leave it again! Smaaaaalllll 4 cyl engines which they'd have to tune up to ridiculous rpm's (you would get all the screaming you could ever dream of and even more) supplied with no limit electric power. I think Marchionne forgot to mention safety though which should probably not be freed from rules :-D, But in this way you would very much have the spirit of formula one: Lots of devellopment, breathtaking speed. Ingenious inventions. Small teams would suffer big time, so big teams should be allowed to enter as many cars as they wish and have B-teams, they could feed 1/2 year old technology for free and put all sorts of promising drivers, engineers, managers et cetera into.

And then as I have suggested before - maybe the races or just the qualifying should be raced in small heats - like the way Race of Champions is run. It would give you lots of exciting battles to follow and a shoot out between the very best in the field many times during weekend. Standing starts every time of course. Grosjean just has to close his eyes. He'll get over it.

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8 March 2018, 20:05  -  On subject of qualifying, I am not going to gain too many (if any) accolades for what I am about to admit, but I used to like tension experienced when Schumacher was racing. At the end of qualifying 2 min past the hour I could let air out of my lungs, and breath with relieve when 1 appeared next to his name.

With that new stuff we have now, I've never experienced such moments ever again. It bores me. Maybe they should, if they must, add one segment to the end having top 4 drivers only to slugged out. First heat between P3 and P4, two cars slugging it out for 2 places over 3 laps, and then P1 and P2 the same - 3 laps fight. Some relaxation on parc ferme rules would have to be allowed for those 4 cars.

(Just innocent idle chat, nothing more.)

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