Ruslan

Budget Cap

11 posts in this topic

Saw this article today:

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Liberty eyes F1 budget cap for 2021
2017-09-13

Sep.13 (GMM) Liberty Media is looking to introduce a budget cap of EUR 150 million per team from 2021.

Germany's Sport Bild reports that the new F1 owner intends to bring in the dramatic rule to compliment the cheaper engine rules, with teams then allowed to spend a further EUR 50 million on marketing, hospitality and drivers.

The smaller teams are obviously supportive of the move to level the playing field.

"That number (EUR 150m) would actually be an increase for us," said Haas team owner Gene Haas.

"I think the bigger problem is the bigger teams."

Indeed, staff numbers counting 1000 plus are no longer unusual at the top of F1, so the biggest impact of the budget cap would be the forced loss of hundreds of jobs.

"That's where the new owners are going to run into some big obstacles," said Haas. "You just can't change it overnight."

But that's where the pre-2021 'glide path' comes in, with even Mercedes' Toto Wolff saying he is open to budget cap discussions about that.

"I think we all live in the same financial reality, we have all seen teams growing dramatically over the years and we are all very sensible about wanting to somehow contain it," he said.

"The discussions that have been happening are at a very early stage but I think there is no big disagreement."

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About time !!!

Should have been done several years ago, but Bernie scuppered it.

150 Euro cap seems a little low. It should be as high as William's annual budget (which I gather is around 200-250).

 

 

 

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13 September 2017   14:45 (CEST)

To what purpose this inane idea will serve? Equality? Marxist ideals in the F1? Well, there is first time for everything, but I doubt this will generate more competitive racing. To service this, teams will need to lay off 55 highly competent engineers, and hire 60 (expensive) accountants and lawyers instead. Good idea? Phew. Question - what will team do when they top budget in May? Fold the tent, go home, and come back 9 months later?

Stuttgart will have foreign auditors from hostile countries audit their books? That I want to see.

Edited by Sakae

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They will offshore and outsource to get around it. No way to police it. 

Will be a waste of time.

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2 hours ago, radical-one said:

They will offshore and outsource to get around it. No way to police it. 

Will be a waste of time.

13 September 2017   17:13 (CEST)

One of the key points why this loopy idea was rejected in the past, however some people dwell on false analogies from irrelevant sports, and you aren't going to talk them out of it. It would be nice if proponents of this idea could explain what it is they are hoping to achieve (or correct). Firstly, any student of the F1 would know that the series strives on excesses, not Mother Theresa's way of living. I have spend far too much time on this, trying to reason its ineffectiveness, but you don't get a decent argument back which one could debate. Investing the same amount of money into sport doesn't guarantee anything, if technical directives and normative references are too complex. I am not sure if it is mere coincidence that Dr. Zetsche felt necessary to comment on future of MB in the F1 (past 2020) - we will think about it.

Edited by Sakae

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Marxism? Really? So I am free to call your idea's "Social Darwinism?"

I have not seen any better suggestions for 1) how to control costs, and 2) how to provide competition from among more than 2 teams (or 3 on a rare season).

If you have a better way to achieve either, then have at it.

 

 

 

 

 

 

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Budget caps never work and they don't make sense to being with.

Granted, F1 is in such sorry state that teams are not allowed to even have enough tires to go around. Tires! A brilliant coup for a motorsport.

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On ‎9‎/‎16‎/‎2017 at 8:58 PM, maure said:

Budget caps never work and they don't make sense to being with.

Granted, F1 is in such sorry state that teams are not allowed to even have enough tires to go around. Tires! A brilliant coup for a motorsport.

Actually, budget caps do work. They are being used in most professional sports in North America. The most severe one being in the NHL (National Hockey League). It has changed the sport and level of competition where out of 32 teams, they have had 16 different teams in the last 13 years make the Stanley Cup playoffs since the salary cup was imposed in 2004-2005 (and the teams are cheaper to operate and NHL is expanding, vice contracting). No teams have made the Stanley Cup finals more than four times in the last 13 years and there has only been one back-to-back win. Contrast that to F1.

What evidence do you have that "budget caps never work?" All the evidence I can see is that they work just fine. There is a reason most major sports in North America are now implementing them.

On the other hand, I do not like the current tire formula. I believe there should be multiple tire manufacturers (within a budget cap).

 

 

 

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21 September 2017   16:01 (CEST)

How anyone can compare salary cap on a hockey roster with the technology field? Racing car - F1 of today - is composition from  over 75000 components. Here is the challenge to police development on that scale. Second issue, NA based professional teams do hire one MBA who is good with cross puzzles, he is busy for a month, tells them how to solve Rubric's cube, and then crawls back into his cave. F1 pretty much presents dynamic environment whole year around, day and night, 7/24. I have no habit to cheat, but I could think of many ways how to avoid detection by auditors.

Imposition of budget limit is a product of lazy minds and certain incompetence. It is not a practical solution to controlling cost, or lowering cost. George Will Ph.D. advised once congress not to make laws, which cannot be enforced. Loopy ideas like imposing budget cap on technology sector and pretend it solves anything simply exceeds my comprehension how that would work in some meaningful manner.

My alternative solutions - I offer two of them. (i) Invite only entities which they can afford to play F1 style (expensive) game. (ii) Change technical system. I don't think automakers will go for it, but build normally aspirated engines, and let them test on real tracks. (Maybe I add one more - hire competent people for a change).

Edited by Sakae

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12 hours ago, Ruslan said:

Actually, budget caps do work. They are being used in most professional sports in North America. The most severe one being in the NHL (National Hockey League). It has changed the sport and level of competition where out of 32 teams, they have had 16 different teams in the last 13 years make the Stanley Cup playoffs since the salary cup was imposed in 2004-2005 (and the teams are cheaper to operate and NHL is expanding, vice contracting). No teams have made the Stanley Cup finals more than four times in the last 13 years and there has only been one back-to-back win. Contrast that to F1.

What evidence do you have that "budget caps never work?" All the evidence I can see is that they work just fine. There is a reason most major sports in North America are now implementing them.

On the other hand, I do not like the current tire formula. I believe there should be multiple tire manufacturers (within a budget cap).

Like he said...

11 hours ago, Sakae said:

21 September 2017   16:01 (CEST)

How anyone can compare salary cap on a hockey roster with the technology field? Racing car - F1 of today - is composition from  over 75000 components. Here is the challenge to police development on that scale. Second issue, NA based professional teams do hire one MBA who is good with cross puzzles, he is busy for a month, tells them how to solve Rubric's cube, and then crawls back into his cave. F1 pretty much presents dynamic environment whole year around, day and night, 7/24. I have no habit to cheat, but I could think of many ways how to avoid detection by auditors.

Imposition of budget limit is a product of lazy minds and certain incompetence. It is not a practical solution to controlling cost, or lowering cost. George Will Ph.D. advised once congress not to make laws, which cannot be enforced. Loopy ideas like imposing budget cap on technology sector and pretend it solves anything simply exceeds my comprehension how that would work in some meaningful manner.

My alternative solutions - I offer two of them. (i) Invite only entities which they can afford to play F1 style (expensive) game. (ii) Change technical system. I don't think automakers will go for it, but build normally aspirated engines, and let them test on real tracks. (Maybe I add one more - hire competent people for a change).

 

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As always.....no real solutions. You guys like to claim that budget caps won't work....not that you can show that to be the case, and then offer something that accomplishes nothing.

Yet, F1 management keeps coming back to that solution. Why is that?

We shall see if Liberty imposes a budget cap in 2021. I am sure there will some resistance from some of the (wealthier) teams.

 

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22 September 2017   9:50 (CEST)

Why FOG management chooses this path could be perhaps explained by their American background, and exposure to influence how caps were imposed there. I am not here to guess their motives, but I do question their MO. On second point, I have interjected into discussion several issues of concern with the proposal, which support my contrarian point of view, yet in return I have not hear one - just one - counterargument, which would lead me out of "darkness". All what I am hearing is, well if NA sports do it, complex technical sport such as F1 can "do that" as well. My own background is technical, and since I am also somewhat familiar how professional hockey cap works, I do retain opinion that we are comparing two completely dissimilar systems which are on the table, and to make this situation even more suspect, FOG has not publicly stated what are their objectives which they are hoping to achieve with such measures. My objection is based merely on assumption, that there is somewhere hidden desire to increase competitiveness for British teams such as McLaren and Williams, and to that end they will send everyone into tail spin dive for it. 

How you can trust this mess?

Today in news:

Former F1 owners in mass share sell off

I can guess why that would be. Can you?

Edited by Sakae

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