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17 Jun 2012

You will find that perhaps some of this article is not as #TechF1 filled as most of my articles but at it's root lies a debate about restricting the very innovation I talk about. Ferrari have, through their president Luca di Montezemolo thrown their hat into the Budget/Resource Restriction ring. This is a subject that will now be voted on by the teams prior to 30th June. Before this date it only requires a majority to be in favour for a new ruling to be installed, afterwards it would need a unanimous vote. This to me is a multi faceted debate and just like an onion as you peel away one layer another debate arises.

I understand in a time where the world is suffering financially that F1 should also lead the way in making Motorsport sustainable this I feel however should be the choice of the teams their selves to police. In any business you simply have to take as much money as you can spend to survive and F1 should be no different. Placing a restriction on the amount of money each team can spend is firstly impractical but secondly self defeating. If we take Ferrari and HRT as the polar opposites, Ferrari like HRT use the sponsorship they receive in order to fund their racing. Ferrari's costs far outweigh that of HRT and so to sponsor Ferrari you would have to pay more than you would for the same amount of space on the HRT. It's exposure vs cost something that advertising anywhere and on any platform is the same. The problem is however that if Ferrari suddenly become cheaper to advertise with teams like HRT also have to lower their costs to keep their sponsors (Why advertise with HRT when you can get more exposure for the same money with Ferrari)

So if we can't control costs because it affects Income, can we control Spending?

Component Control: We have seen over recent years that controlling the life span of components ultimately results in a lower cost with only 8 engines allowed during a season (without incurring a penalty for additional gearboxes) and gearboxes needing to complete 5 races (without a grid penalty)
I've also heard people talk about unifying supply of other components such as Brake Calipers / Discs / Clutches and having one sole supplier. That’s all well and good if you want to control the cost the team pays for these items, however if we are being conscious of the global economy the current plethora of suppliers would end up with no business whilst one is left with the Monopoly. This in itself is a self defeating/narrow minded way of dealing with the facts of the world economy.

Staff Restrictions: Although FOTA would lead you to believe that there is currently a restriction on team personnel this only extends to it's own members of which Ferrari, Red Bull Racing, Sauber, Toro Rosso and HRT are not members. As FOTA holds no authority the decisions made by it's members are localised in use to those teams, putting it's members at a disadvantage. Any decisions made by the FIA on limiting staff numbers would need to be added to the Regulations and would then affect every team in the Paddock. This could be done by restricting personnel available at both the factory and/or at the circuit for races, the former placing the biggest restriction on the teams. Once again this is a fine balancing act as the more successful teams always employ many more personnel than the smaller teams can afford. Making people redundant from Top Tier teams in order to lower the costs associated with running that team doesn’t bold well for the world economy, as the lower teams already have as many team members as they can afford, meaning more people looking for employment.

Research Restrictions: With limited on track testing the strides made by F1 teams have been through the use of the Wind Tunnel & CFD over recent years. Placing similar limits on the time available to use the Wind Tunnel &/or CFD could act as another means of saving money. However with additional track time available this season for In season testing the teams have called for more. It would appear they want to have their cake and eat it but more testing will only incur more cost.

In Summary

The teams need to adapt to an ever changing economic and social environment, this is not the first or the last time the world economy has faltered. Placing a restriction on the teams spending will inevitably lead to a decline in the quality of the 'show' something that F1 can ill afford. Losing it's market share of viewers would also mean losing sponsors and so the whole scenario is systematic. F1 needs to continue to make strides into emerging markets and should look to embrace social media in order to further increase it's fan base.

Montezemolo's recent outburst about cost control is more about creating a rival control, with Ferrari trying to stem the development rate of teams like Red Bull.  Ferrari for many years were really only ever competing with McLaren but over recent years Ferrari's slow adoption of Wind Tunnel and CFD usage has allowed other younger teams to capitalize.  Top tier motorsport has always been about how fast can you afford to go and in my opinion should stay that way. The only way costs should be controlled is by the teams themselves if a team like Red Bull Racing have the backing of a drinks manufacturer that is willing to spend more money than the prancing horse so be it. 
We also have to remember that whilst the FIA make the following statement ' The intention is to help all teams participate in the Championship in a fair and equal manner' CVC continue to provide a protracted view supplying the teams money at the end of the season based on their position and heritage within the sport. This perhaps needs to be the largest change within the sports economic ethos providing an equal fund for all competitors except perhaps the championship winners.

Limiting the capability of the teams will only result in a lesser Formula and so the teams should think long and hard before voting on measures to restrict not only their rivals but own capabilities.


1 comment:

  1. For info: F1's Missing Millions is an article in Autosport's 7/6 edition. It covers where the money comes from. It is no ones place to tell teams (like Ferrari - 35m pds from Santander, 65 m from Philip Morris) how to spend this hard earned money. It is said that sponsorship income is 75% of what it was at its peak so there is 1bn pds, plus end of term money. For me that's enough to go round. As you say, more support needs to be directed towards the back of the field, from within the sport IMHO, to help them imrprove and attract more investment. I support more simulation, less testing & hands-off Spa, Monza and Silverstone! I don't want all F1 cars to be Dallaras fitted with Renault engines. Let's see how far Monte can spit his dummy...


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