£40m Budget Cap and Controversies

[bradleigh]

This topic sure has evolved since November 2008. I think FOTA and MM need to come to an agreement, and go ahead and operate under a limited budget. The number is just too low right now. Basically Max is trying to impose this budget by making the advantages of operating under the cap too great to ignore. It sounds like ultimately the 40mil number is too low for most teams. What I'd like to know is, what the impact of a car redesign would be on a team budget. For example, would "single decker" diffuser teams be up a creek this season because they wouldn't be able to afford a redesign of their diffusers?

I'm thinking that is why the manufacturer teams are balking at this idea. Ferrari, McLaren, etc. want to have the freedom to miss on their car design, and be able to throw money at it to get it rectified by the end of the season. If the cost cap prohibits that development, then teams had better be rolling a real contender onto the grid come round 1.

[JoostLamers]

According to Dutch Commentator Olav Mol, it is end of (F1) story for Toyota. He says that John Howett is against everthing the FOTA discusses and that Toyota is looking for a good reason to leave F1. In the coverage just before the GP today, Max Mosley will give an interview for Dutch TV and there he says that they will lose a 2nd (after Toyota).. But which team..?

[Ali]

Ed Gorman: A deal is coming; looks like Ferrari is staying (no surprise there) - Times Online

Spoiler:

A quick update from the paddock on a beautiful Saturday morning in Monaco where Fernando topped the time sheets for the final session of practice. (There is an interesting interview with the Asturian in Gazzetto dello Sport today in which he talks of his affection for Ferrari. There are few in the press room who do not believe he will be at Maranello next year, almost certainly driving alongside Felipe).

I digress. The main point of this is to say it looks very much as though the big crisis in the sport is going to sort itself out in the next few weeks and Ferrari will be not be joining the Indy Racing League after all. The sense on Saturday evening was that all the players were talking positively and about a constructive atmosphere. It looks as though the teams are trying to soften the transition to £40 million and will be working with the FIA to find ways of finessing a deal which allows Max to claim the cost cap has come into being, while they can claim the DNA of the sport has not been harmed and a more gradual approach has been achieved.

One way is a possible exclusion of engine costs from the cap up to 2013 which the FIA may have offered. Another is for the teams to agree ways to save money in other areas to help them achieve the £40 million target figure. The impression being given from informed sources is that the teams believe they can get to £40 million in 2011 but not by next year. But all in all, it looks like it's all narrowing towards a compromise and the theatrics from Maranello are no longer required.

I suppose one has to ask, however, who the real winner will be. The FIA and Max will say they have made an historic contribution to curtailing ludicrous expenditure in Formula One, but it will also be possible to argue that the cost cap - or cost "sombrero" - has become rather too large and ill-fitting to make much impact. £40 million may be the headline figure but there are going to be very large areas of expenditure excluded - marketing budgets, engine costs, driver salaries, expenditure that is not related to car performance and so on - and the rich teams and big manufacturer outfits are still going to be spending huge money. In the paddock in years to come, I'm not sure we will notice much difference.

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[phil1993]

Rumours are its gonna be £100m with no two tier

[swca92]

100m? No new team will join if that's the budget cap. Tbh I think 40m is a reasonable amount to run a team, I see no problem with that figure.

[Totopupu]

Ferrari haven't understand the budget cap.

They think that it will make a 2x reglementation.

But, they must understand that all teams will respect this budget and that the technical reglementation for these who don't respect the budget cap is a PENALITY.

Maybe they don't want the budget cap because their sales of car are improve (few cars for few rich)(don't touch by crises), contrary to BMW, McLaren, Renault who sales cars at ""normal"" prices and also to person who are "touch" by crises.

[Ali]

Mosley: Cost cap solution in sight
FIA president Max Mosley is confident a solution to the row over cost cuts can be found soon, after admitting that the governing body is ready to be flexible on its plans for a voluntary budget cap in Formula 1. Following the latest round of talks that situation appears to be heading towards a resolution. The controversy has dominated headlines for the past few weeks, and Mosley said he was optimistic of a solution being found. One possibility being discussed is a higher budget cap for 2010, before implementing the FIA's plans for a £40 million limit the following year. Alternatively, more aggressive cost cuts could be implemented for next year prior to the budget cap in 2011.

"I can imagine we can take it through one year if possible [with the] higher figure and then go to the full cap in 2011, but that's something under discussion," he told the Reuters news agency. "This is a possibility."

Spoiler:

It is understood that teams proposed their version of a cost cuts package to Mosley during their meeting on Friday - which was a budget cap in all but name.

Mosley made it clear, however, that the figure could not change much from the £40 million already on the table - although exceptions to what is included in the budget cap could be made.

"Ultimately, it's going to have to be that sort of region," he said. "Just imagine in today's world, you go out to get sponsorship and you are just an ordinary team, so to raise 45 million Euros is a massive undertaking.

"Everybody can talk figures, well it ought to be this figure or that figure, but if a team cannot raise the money, then there is nothing they can do."

With next Friday's deadline for entries to the 2010 championship looming, it is looking increasingly likely that current teams will submit their applications - although under the pre-condition that they will only see through their intention to enter if they are happy with the technical and sporting regulations as they end up.

McLaren team principal Martin Whitmarsh said he hoped that the current grid would commit in its entirety - despite speculation that Toyota and Renault could quit irrespective of cost-cutting plans.

"I hope all 10 teams here sign up. I think lots of people have expressed views as to whether they will or they won't," said Whitmarsh. "Expressing those publicly I don't think helps.

"It's ridiculous if we between us, the governing body, commercial rights holder and 10 teams in Formula 1, cannot find a constructive way forward. At the end of the day there are no guarantees from any of these teams they are going to be here next year or in the years to come.

"But with all due respect to new entrants, it's a big ask to jump into Formula 1, even with budget caps or whatever. The risk of a new entrant failing is always going to be greater than any of these teams failing or withdrawing. We have to make sure we keep them in."

Mosley said he believed Ferrari would commit its entry 'by Friday', but felt that 'one or two' manufacturers may be ready to walk.

"I am confident Ferrari will still be here," said Mosley. "[But] I think one or two of them may have to stop but it is nothing to do with these discussions.

"It is very difficult for a major manufacturer to continue in F1 when they are economising in their factories by shutting off every other lift, turning down the electricity, not cleaning the windows, not serving coffee at the meetings.

"A company that is in that sort of situation is unlikely to go on pouring massive money into F1. So there is a danger, and that's what started the whole thing with the new teams.

"So we are going to lose one or two manufacturers and or independent teams, we can't assume that things will continue. That's what provoked the whole of this. If we hadn't had the present crisis, we wouldn't be having these discussions."

Mosley was optimistic that moving the budget cap higher for 2010 would not discourage new teams coming in.

"The main thing for the new teams is that they shouldn't be behind technically, and there are ways of overcoming that problem," he said.

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[phil1993]

Breaking news: 45m euro cap but NOT for 2010, for 2011

[Ali]

Teams demand FIA ditch 2010 rules
"A FOTA source said that in exchange for the FIA agreeing to such action, the teams have promised a "willingness to commit their future to the sport." It is understood that the teams are prepared to commit not just to next year, but until 2012. Ferrari team principal Stefano Domenicali confirmed the existence of the letter shortly after the Monaco Grand Prix.

"What we have asked is to go back to the rules of this year, the 2009 rules," he said. "And then see together what we can do in order to make changes for next year."

Formula 1 teams have written to FIA president Max Mosley requesting that next year's regulations are scrapped if they are to commit their future to the sport, AUTOSPORT has learned.

Although Mosley hinted on race morning at the Monaco Grand Prix that he was open to a compromise deal about plans for a £40 million budget cap, the teams have now made it clear the conditions by which they will continue to race.

In a letter signed by all teams and sent to Mosley shortly before the race, the teams demanded that the FIA ditches the planned 2010 technical and sporting regulations and reverts to the current 2009 version.

This would then be used as the starting point for framing new regulations to bring costs under control - with agreed changes like a refueling ban still expected to go ahead as planned.

As well as the rule changes, the teams want guarantees about the governance of the sport and the reestablishment of protocols, like the use of the Formula 1 Commission, to ensure there is proper framing of the rules going forward.

A FOTA source said that in exchange for the FIA agreeing to such action, the teams have promised a "willingness to commit their future to the sport." It is understood that the teams are prepared to commit not just to next year, but until 2012.

Ferrari team principal Stefano Domenicali confirmed the existence of the letter shortly after the Monaco Grand Prix.

"What we have asked is to go back to the rules of this year, the 2009 rules," he said. "And then see together what we can do in order to make changes for next year.

"Bear in mind that for sure the cost is something that all the teams are fully committed to work on, but the cost is something that is related to the business of the teams.

"We know what we can invest. We know what we can do, and this is something that the teams can discuss internally and decide on their own what they can afford to keep the value of F1 at the standard that we know. It is not something that we feel should be involved with somebody else."

While there has been talk of a compromise 45 million Euros budget cap in place for 2011, sources have suggested that the teams are still far apart from the FIA in agreeing a way forward.

It is understood that one suggestion being looked at is for the teams to invoke a 'Cost Control System', which will be regulated by FOTA rather than the FIA, to help bring finances under control.

When asked by AUTOSPORT if he was optimistic about a solution being found before Friday's entry deadline to the championship, Domenicali said: "I don't know really. I think the points that we have put on the table are pretty clear, and I think we raised some issues in the meeting that we had.

"It was as we said constructive, but there is an ongoing process to discuss. I am sure it will be a very important week because the entry to this championship has to be finalised by Friday. I think they will be long days."

FOTA vice chairman John Howett echoed Domenicali's reluctance to get too optimistic about a deal being easily reached.

"I think we have to wait and see," he said. "There are still some gaps. While there has been definite movement, I think we have to wait and see what the solution is and whether it is accepted or not."

Brawn chief executive officer Nick Fry said that the push by the teams about using the 2009 regulations again in 2010 was not indicative of the discussions having broken down.

"No. It is not a stalemate. It is normal negotiations. The sides have some differences of view in terms of how the regulations should look, and once one side has put a view forward, the other side responds - and so on and so forth. I would consider that to be perfectly normal.

"We are all in favour of a degree of financial responsibility. I know there is no team that is proposing a financial free for all, we all represent big companies and the economic times are not appropriate to be spending a lot of money. The only discussion is how you do it, and what the right mechanism is.

"We have a huge range of teams - teams that want to come into the championship that are small and have limited resources and coming from lower formulas; we have teams who do have a huge amount of infrastructure and we have teams like ourselves that were lucky enough to benefit from manufacturer backing but now don't have that, and teams that are still very large and enjoy manufacturer backing.

"And the issue is how you actually find a compromise that enables the little guys to have a fighting chance and the big guys to downsize their companies in a sensible period of time. And that is not easy."

FOTA members are expected to meet later this week to discuss their stance towards lodging entries by Friday's deadline, but much depends on the FIA's response to the latest demands.

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[AzShadow]

Williams submits F1 entry for 2010

Spoiler:

Williams has become the first of the current teams to enter next year's world championship, despite the continued uncertainty about the regulations.

Just 24 hours after Formula One Teams' Association (FOTA) members claimed that the current grid was 'united' in its efforts to get the 2010 regulations changed, Williams has decided to lodge an application to compete in next year's championship.

Williams CEO Adam Parr told Reuters that his team's decision did not mean that the outfit was breaking away from FOTA, however.

"The unity of FOTA is of paramount importance to Williams," said Parr. "Yesterday we joined the other members of FOTA in writing to the FIA (International Automobile Federation) to request a continuing effort to find a compromise concerning the regulations for 2010."

Teams have written to FIA president Max Mosley saying that they will commit to racing until 2012, and sign a new Concorde Agreement, if the FIA scraps next year's regulations.

Speaking about the Concorde Agreement, Parr said: "We believe that under the leadership of (Ferrari president Luca) di Montezemolo and (Toyota motorsport president) John Howett, FOTA has extracted some very significant concessions from the FIA.

"These include not only the procedural aspects of the budget cap but also other elements that will enable the higher budget teams to participate.

"Having said that, Williams has -- and has always maintained -- that we have a binding contract with both F~0~M (Ecclestone's Formula One Management) and the FIA to participate in the world championship from 2008 to 2010."

He added: "We have been paid in full for our participation and we feel both morally and legally obliged to make it clear that we will participate in Formula One in the future as we have in the past 30 years.

"We owe this to our employees, our sponsors and the fans, all of whom are affected by statements that the teams may not enter next year's championship."

"We will continue to work within FOTA and with F~0~M and FIA to find a compromise but no one should be in any doubt about our commitment to the FIA F1 world championship."

Other members of FOTA are expected to meet this week to decide what to do about their entries to next year's championship, with the deadline closing this Friday.

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[Ali]

Williams the strikebreaker.

[Zack]

Williams as just fked all gains in FOTA's & MM meeting in Monaco. In other words they support Max Mosley's budget cap.

[Totopupu]

Williams as take the right way and the good decision

[phil1993]

The Formula One Teams' Association (FOTA) is set to meet again in London on Wednesday afternoon as talks continue in search of a compromise towards the governing body's proposed £40m budget cap initiative, due to start next season.

With Williams the only current team to have submitted an entry to the 2010 World Championship thus far, remaining teams - as well as new entrants - have until this Friday to submit entries ahead of the FIA's revealing in June of next season's line-up. Having met at Heathrow on Friday 15 May, the teams got together once again on no less than three times over the Monaco Grand Prix weekend in order to finalise the technical regulations for next year.

With all competitors presented with the option of running with the spending limit and more lenient car designs next year, Toyota, Red Bull, Renault and Ferrari have already threatened to walk away from the sport with the possibility remaining that - in the event of some electing not to run with the cap - a 'two-tier' championship, with cars running to different sets of technical rules, could be put into place.

Although all ten current teams agreed in Monaco to sign until the 2012 season in the event of next year's cap option being removed, FIA president Max Mosley has refused to back down as - after first mentioning the cap in the spring of last year - new teams now hope to enter Formula One.

With Williams, who have long supported a budget cap idea, now down for entry for 2010, it is understood that disruption may have been caused for certain members of FOTA.

[swca92]

*BREAKING NEWS-Williams banned from FOTA.