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10 Aug 2009
by Dhc
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DEBATE: ARE REGULATED COSTS CUTTING MEASURES (SUCH AS A BUDGET CAP) NECESSARY FOR F1 TO SURVIVE
Posted by: Leo A Capella
Karma:
1826
So peace reigns at least temporarily in F1 as a result of a deal by Max Mosley and Luca De Montezemolo. And there are going to be major costs cuts in F1 the nature of which have been disputed. But are these costs cutting measures necessary and even if they are should they be ones enforced by the FIA or should they be made by the teams self regulating themselves?
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ARE REGULATED COSTS CUTTING MEASURES (SUCH AS A BUDGET CAP) NECESSARY FOR F1 TO SURVIVE
Balance between the manufacturers and the independent teams
Formula 1 is not just made up of manufacturer backed teams such as Renault and Ferrari. there have been and currently are a number of independent teams such as Brawn GP, Force India, Williams. As a result the Federation International de L' automobiles (FIA) has to act as a balancing effect between the interests of those manufacturers that are involved and those teams that are not owned or have significant backing from a manufacturer. If it didn't then the independents could be squashed out unfairly or have no chance to challenge the established manufacturers. This would mean that no new teams would come into F1 and the manufacturers could easily desert formula 1 if they needed to under cost cutting measures. For example Honda had to pull out of F1 in 2008 as a result of the global recession hitting it hard. If other companies had followed suit and without providing their teams then F1 could disappear.
There may have been five manufacturers prepared to walk out of F1 but there were also three independent teams prepared to join us (admittedly two if you count Red Bull as having two teams) so I think the independents would be able disagree with you there. And teams aren't against regulations that help the sport for example increasing the life expectancy of engines from two to three races was something approved by all of the teams including manufacturers[ However the manufacturers ultimate purpose is to compete to their utter limits and be at the cutting edge and if that costs a lot of money then so be it. [ Adam Smith" Formula 1: Cutting corners "TIME http://www.time.com/time/magazine/article/0,9171,1857126,00.html]].Independents know the drill such as Brawn GP and sometimes the rules can go in their favour as demonstrated by this year with Brawn GP gaining an advantage over their rear diffuser[1] So while there should be a level playing field formula 1 isn't a one make series and the Independents know that right from the start.
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ARE REGULATED COSTS CUTTING MEASURES (SUCH AS A BUDGET CAP) NECESSARY FOR F1 TO SURVIVE
Manufacturers can struggle as a result of their racing teams
Writing to the members of the FIA Max Mosley underlines a key problem with manufacturer teams, motor racing is just one part of their operations and although it is important it is expendable : "It is extraordinary that for when all five manufacturers [Ferrari, Renault, Mercedes, Toyota and BMW] involved are in great financial difficulty and relying on taxpayers money, their Formula One teams should threaten a breakaway series in order to avoid reducing their Formula One costs. It remains to be seen whether the boards of the parent companies will allow precious resources to be wasted in this way."[1] All of the manufacturer backed teams are part of their manufacturers some of which like Renault, Mercedes and Toyota have wide ranges of cars which are not just high performance cars meaning that. Their F1 teams could be part of a problem for those manufacturers in wanting to push the boat out by taking money away from other projects (improved technology) without delivering their worth (such as podium places, wins , or championships).
So what?Manufacturers may be struggling but they can struggle for other reasons rather than their motorsports and rely on the gymnasium of motorsports to advertise their cars and the advantages those cars may have over their rivals. For example take better reliability and economy as well as the prestige Formula 1 should bring. Incidentally prestige is one of Ferrari's main reasons for being in F1 and if that was undermined by the FIA through cost cutting measures then they'd have no reason to compete in the formula and go else where.
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ARE REGULATED COSTS CUTTING MEASURES (SUCH AS A BUDGET CAP) NECESSARY FOR F1 TO SURVIVE
Additional benefits of regulation measures
Regulations to reduce costs provide additional benefits to Formula 1 as a whole and the manufacturers too For example next year three more teams will be competing alongside the existing ten teams raising the grid to a maximum of 26 cars allowing more of the world's best drivers to come and compete. It also means that the existing manufacturers have the opportunity to supply customer engines to the new teams something that adds to the manufacturers revenue as well as have a chance to measure themselves and their technology against the new teams.[1]This is only one example
Having new teams in any form of motorsport is admittedly a good thing. It brings in opportunities for new drivers. But the proposed measures are debatable in whether they would continue to bring in teams over the long run and manufacturers that could provide serious competition. What about Nissan which has dominated JGTC and competed in motor racing or Subaru or even Volkswagen? Admittedly Cosworth (a company which is second in terms of engine victories only to Ferrari) is going to be back but my point is the competition is limited by the strength of the new teams.
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ARE REGULATED COSTS CUTTING MEASURES (SUCH AS A BUDGET CAP) NECESSARY FOR F1 TO SURVIVE
More entertainment.
Point explained later on as counter-argument.
ARE REGULATED COSTS CUTTING MEASURES (SUCH AS A BUDGET CAP) NECESSARY FOR F1 TO SURVIVE
It isn't just costs by the teams that should be on the table each time
Those "empty cathedrals" as a certain F1 manager put it have brought in a lot of money to F1- money that the teams get their hands on as part of the Concord agreement.[1]. Also some of those circuits like Instabul in Turkey have not had as much time as some of the more established tracks like Silverstone has meaning in the long term they could work out, particuarly if drivers from those countries who are new to F1 get into race seats and drive well. One only needs to look at Spain to see the following two time F1 world champion Fernando Alonso has developed for a sport that initially used to get a modest following.
Manufacturer costs may be a problem but it isn't the only problem that affects costs and revenue for all teams. For example the concord agreement means that the teams only get a share of half of the revenue rather than three quarters. Also increasingly F1 in it's desire to seek new motor racing fans and avoid the tobacco advertising has . As a result there has been no North American leg for Formula 1 amongst other world championships for the past two years unlike in motorcycle racing where Moto GP (the motor cycle version of F1) has raced in North America for the past six years . This means motor racing teams are out of a main manufacturing market where motorcycle racing teams aren't[1]
- ^ "List of Grand Prix Motorcycle Circuits" http://en.wikipedia.org/wiki/List_of_Grand_Prix_motorcycle_circuits
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ARE REGULATED COSTS CUTTING MEASURES (SUCH AS A BUDGET CAP) NECESSARY FOR F1 TO SURVIVE
Rules would cost Jobs
Simple question: What's worse job cuts now or job losses as a result of grand prix racing collapsing altogether. Job cuts as a result of a budget cap still give teams a chance to keep mechanics and people employed. If Formula 1 were to go bankrupt then aside from the employment found of circuits. Some teams could try to switch formula's but would still have to cut jobs and may not succeed losing sponsors and possibly still going out of business. This way teams have a chance of surviving.
Already companies like Brawn GP have had to shelve hundreds of workers as a result of downsizing due to changed budget. Added to that tens of skilled jobs have gone from companies like Mercedes Benz as a result of rule changes increasing the life expectancy of each engine[1]. Maybe the figures aren't massive compared to other industries but with the economy and with Britain's automotive industry in bad shape let alone other countries strict regulations on costs would add to the problem
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ARE REGULATED COSTS CUTTING MEASURES (SUCH AS A BUDGET CAP) NECESSARY FOR F1 TO SURVIVE
Less entertainment
Having a more standartizeised F1 will make things only more interesting : lots of single-make Formulae are very interesting exactly because the cars are very similar and because of that the pack of the cars is always tight. Something similar can be observed in touring car racing, where weight restrictions are being used ( BTCC )
Increased standardisation such as a budget cap would lead to less entertainment due to less competition. F1's entertainment came through it's variety of choice in tires and technology and also because the cars were noticeably different except maybe for safety standards. Now the cars are effectively becoming a one make series further cost cutting measures may help Formula 1 survive in the short run but in the long run it will make it less distinct from it's rival motorsports championships such as the Indycar Series or A1GP and therefore potentially turn off more fans.
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Vote on the overall debate: Are regulated costs cutting measures (such as a budget cap) necessary for F1 to survive
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Leo A Capella
|09:46, 22 June 09
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Leo A Capella
|12:16, 24 June 09
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Leo A Capella
|10:08, 22 June 09
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Leo A Capella
|10:24, 28 June 09
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Leo A Capella
|11:55, 24 June 09
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Leo A Capella
|10:52, 29 June 09
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|16:41, 10 August 09
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Leo A Capella
|12:35, 24 June 09
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Leo A Capella
|10:45, 28 June 09
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Leo A Capella
|07:55, 29 June 09
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Leo A Capella
|10:41, 29 June 09
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Leo A Capella
|10:33, 29 June 09
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|16:44, 10 August 09
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