£40m Budget Cap and Controversies

[sejtur]

*put's reading glasses, and the "stupid" hat on*

[AzShadow]

Mosley: F1 could survive without Ferrari

FIA president Max Mosley has insisted that Formula 1 could live without Ferrari in response to Luca di Montezemolo's criticism of the budget cap regulations.

The Ferrari chairman hit out at the introduction of the budget cap in a letter to the FIA revealed by AUTOSPORT yesterday.

In the letter di Montezemolo said the budget cap could undermine the credibility of the sport and be difficult to implement. He suggested that "all aspects of the new regulations should be carefully reviewed."

But Mosley insists that the £40 million budget cap is vital for the health of F1, saying that if Ferrari was to be lost to F1 it would simply be "sad". He added that he expects it to be difficult for the team to justify its opposition to the budget cap to the Ferrari board given the amount of money it could save.

"The sport could survive without Ferrari," Mosley told the Financial Times. "It would be very sad to lose Ferrari. It is the Italian national team.

"I hope and think that when a team goes to its board and says, 'I want to go to war with the FIA, because I want to be able to spend £100m more than the FIA want me to spend,' the board will say, 'Why can't you spend £40m if the other teams can do it?'"

Mosley emphasised that the FIA would not back away from the budget cap and that it is vital for the financial health of F1 in both the long and short term.

"The cost cap is here to stay," he said. "There is room for discussion, it might go up or down in 2011 and if the economy picks up, say in 2014, then it might go up. You might adjust the cap in the interests of the sport, but you'll have everyone on a level playing field.

"The credit crunch hasn't really hit F1 yet. Obviously we lost Honda, but the real crunch will come when current contracts come to be renewed.

"Those contracts were signed before their share prices took a dump. I believe F~0~M [Formula One Management, the commercial rights holder of F1] will not be able to give the teams as much money as they have."

Mosley admitted that policing the budget cap would be difficult, but that any suspected irregularities would be thoroughly investigated.

"The difficulty and danger of cheating would be enormous," Mosley told the FT. "If we had the slightest suspicion that anyone was cheating, we'd send a team in to check. That's part of the deal.

"The [Inland] Revenue can't put even one tax inspector into each business on a permanent basis, we can put several in."

So Mosley's ready to take on Ferrari. Ferrari might not be the only one threatening to leave though as BMW, Toyota and maybe even Renault might have something to say about this budget cap.

[JoostLamers]

*put's reading glasses, and the "stupid" hat on*

[iceman1]

Mosley: F1 could survive without Ferrari

But F1 Fans will not survive without Ferrari

[AzShadow]

Mosley on Ron Dennis and budget caps

I did an interview with Max Mosley for the Financial Times on Friday in London, all about the budget cap introduced to F1 for next year, the first part of which was posted yesterday.

We covered a lot of topics, but I couldn’t help asking him about Ron Dennis’ departure from McLaren. He made an interesting comment about how the McLaren situation had played into his hands this week, “I don’t hate Ron Dennis, “ he said. “But he was always very obstructive. And he would have been difficult in this situation (budget caps), whereas Martin Whitmarsh may not agree with us but it will be a rational disagreement not an irrational one.”

This is an interesting twist on the McLaren saga and the timing is significant from Mosley’s point of view. McLaren, having created problems for themselves in March, by acting dishonestly, have engineered the removal of Dennis, which has in turn removed someone who would have provided a major obstacle to the budget cap plans.

Final question, how many new teams are out there who seriously want to come in and have the means to do it?
“We’ve got seven quite serious outfits wanting an entry and two less serious ones, its going to be very hard selecting three.”

[Ali]

On Budget Cap:

Ferrari - Budget cap may hurt F1
"All aspects of the new regulations should be carefully reviewed. Limiting, for the time being, my comments to the cost cap issue, as you know I have always been concerned about the introduction, mainly because I consider that there are serious technical difficulties in making sure that any cap can be realistically monitored. Additionally, any controversy on the actual respect of the cost cap would undermine the image of Formula 1 and could seriously damage any involved team. There are on the other hand doubts as to whether or not two categories of teams should be created which will inevitably mean that one category will have an advantage over the other and that the championship will be fundamentally unfair and, perhaps, even biased."

McLaren - Reluctant about two-tier series
"As a member of FOTA, Vodafone McLaren Mercedes is of course supportive of FOTA's recent efforts to reduce costs in Formula 1. Equally, we recognise the excellent work done recently by the FIA in the area of cost-reduction. Having said all that, we understand that some teams' operational budgets may still be unnecessarily high in the challenging global economic situation in which we now find ourselves. Nonetheless, we believe that the optimal solution - which may or may not include a budget cap, but which ideally would not encompass a two-tier regulatory framework - is most likely to be arrived at via measured negotiation between all parties."

Williams - Supporter of budget-cap but against two-tier series
"Williams has supported the introduction of a budget cap since the idea was first put forward early in 2008. Since then FOTA has made tremendous steps forward on costs but the rationale for a budget cap has also grown even stronger. We would like to see all the teams operating to one set of regulations and under a budget cap in 2010 and that is the position we will be advocating within FOTA when we meet next week. We understand that this will represent a serious challenge for some of the teams but we expect that FOTA will work together to find a unified and constructive way to take the FIA's initiative forward."

Force India - Supporter of budget-cap but cautious on rules
"In principle Force India welcomes all cost cutting initiatives and budget caps, but we must fully investigate and understand the implications of the current measures proposed by both the FIA and FOTA."

BMW - Though not commented yet but had said earlier this year that they're in favour of budget caps
"In principle we have always supported the budget cap instead of individual technical restrictions because very simply if you want to save money you should limit money and not something else. So in our view this is a very valid approach, you can always argue about the figure then, but the principle of going to a budget cut and allowing the teams to spend the money in areas they think will make them competitive, is something we would approve. If you police a budget cap it's just one figure you have to police. In my view it's much more difficult if you don't achieve a budget cap and come up with individual restrictions like wind tunnel use or, simulator use, or whatever."

[phil1993]

JB also supports budget cap

[shailf1]

2008 F1 team resources

Including sponsorship, supplier deals, prize money, team owner contributions, tyre provision and supply of customer engines where appropriate.

Toyota: $445.6m
McLaren: $433.3m
Ferrari: $414.9m
Honda: $398.1m
Renault: $393.8m
BMW Sauber: $366.8m
Red Bull Racing: $164.7m
Williams: $160.6m
Toro Rosso: $128.2m
Force India: $121.85m
Super Aguri: $45.6m

--

How the FIA can expect the top teams to reduce such a budget to £40 million in one year is beyond me, basically all they are doing it putting people out of jobs, and making it easy for sub standard teams to appear on the grid.

I had mixed feelings about the budget cap, but now I am all for Ferrari pushing on and leading the breakaway from the FIA and Bernie, and give us a racing series based on the real foundations of Formula One. If Ferrari lead the way and FOTA remains strong then it can happen.

[AzShadow]

FOTA is on the verge of splitting up as the private teams are in favor of the budget cap and the manufacturers are against it. So we'll see if Montezemelo tries to maintain unity or if manufacturers will choose their own way.

[phil1993]

How the FIA can expect the top teams to reduce such a budget to £40 million in one year is beyond me, basically all they are doing it putting people out of jobs, and making it easy for sub standard teams to appear on the grid.

Exactly: look, take McLaren for example. Take all of their employees. They must be working on an average of 40k a year? I don't know exactly.

Take 40,000 and multiply it by 700 and you have £28m going to employees.

Its just a guess, but some will be on more than that figure and some less.

That leaves £12m for everything else....

[AzShadow]

Ecclestone says he will protect Ferrari

Speaking to The Times newspaper, Ecclestone said he won't let Mosley "destroy" Ferrari.

"I won't let it happen," Ecclestone told the newspaper.

"The trouble with Luca is that you shouldn't let Max ever be in a position where he can start a debate or an argument. He's reasonably clever and you won't win.

"Even if you do win, it's like you being in the audience and me being there with the microphone. You say something smart and I don't give you the microphone — it's as easy as that."

Ecclestone, however, insisted the budget cap idea could still work if the teams and the FIA manage to agree on some important points.

"It would appear that everyone is in favour of the cap, including Ferrari, if we can get them to agree, which we can," Ecclestone added.

"However, there is concern over the amount that is referred to in the cap for some of the teams and also the two-tier system. So these are probably not monumental things to sort out."

Bernie got all worried already.

[Ali]

Two-tier F1 could lead to BMW F1 exit
BMW has joined Ferrari in hinting that it is willing to quit Formula One if a 'two-tier' series is introduced next season via the optional budget cap. The newly-published regulations for next year offer teams the option to be limited to a £40m affording them more technical freedoms than their big unlimited-spending rivals. Max Mosley's cost-cutting revolution has enraged Ferrari President Luca di Montezemolo, and BMW Motorsport Director Mario Theissen revealed on Tuesday that the board of the Munich manufacturer is similarly unimpressed. "A two-class Formula One is not attractive to BMW," the German said at a media event in Munich.

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http://en.f1-live.com/f1/en/headlines/news/detail/090505182818.shtml

[shailf1]

JB also supports budget cap

that is because drivers salaries is not included ..

[phil1993]

JB also supports budget cap

that is because drivers salaries is not included ..

and Brawn don't have the money Honda had

[AzShadow]

Two-tier F1 could lead to BMW F1 exit

BMW has joined Ferrari in hinting that it is willing to quit Formula One if a 'two-tier' series is introduced next season via the optional budget cap

The newly-published regulations for next year offer teams the option to be limited to a £40m affording them more technical freedoms than their big unlimited-spending rivals.

Max Mosley's cost-cutting revolution has enraged Ferrari President Luca di Montezemolo, and BMW Motorsport Director Mario Theissen revealed on Tuesday that the board of the Munich manufacturer is similarly unimpressed.

"A two-class Formula One is not attractive to BMW," the German said at a media event in Munich.

The BMW board re-approved the BMW Sauber project in February, but Theissen warned that if the landscape in F1 dramatically changes, it would have ‘the same impact on the project’.

The heated situation makes the meeting of the Formula One Teams' Association in London on Wednesday crucial.

Theissen expects the gathering to be a long one, but as Bernie Ecclestone suggested this week, the chasm between the big teams' position and that of the FIA President may not be unbridgeable.

But to the German press, he said of Mosley's £40m cap: "In one go you cannot just evaporate by a factor of three. A moving path, for example over two or three years, would be possible."

Ecclestone of course is keen to see the costs reduced – as is the FIA and most of the teams – but in his case, the F1 CEO would be able to legitimately turn around to the teams and reduce the payments they receive from Formula One Management and therefore increase the profits made for CVC Capital who own the commercial rights to the series.