Doing Less with More~ M. Hallam

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Spend more, achieve less: That’s the wholly unpleasant option currently on offer for Formula One teams that do not want to stick to the proposed, voluntary budget cap of roughly USD 60 million.

As it stands, and I feel safe in saying that this will change on Friday, teams that accept the cap on spending will benefit enormously – assuming they can balance (or fiddle) the books well enough to use the advantages on offer. Moveable front and rear wings, unlimited off-season track testing, unlimited wind tunnel testing, double the KERS output, and no rev limiter for engines are the most notable incentives for cost-capped teams – and folks far smarter than I seem to concur that these benefits will be worth between two and three seconds per lap.

That is an insurmountable gap for any teams which refuse to lay off scores of workers and completely restructure their spending in the space of six months. Not only would they be trying to do the impossible with their extra money, but they would likely be perceived as appalling failures who achieve less despite spending more.

So, the current budget cap proposal is effectively mandatory. It would not create a two tier F1, but it would force the sport’s big spenders either to aggressively streamline their operations, or to flagrantly cheat and hope to avoid capture.

This Friday, the Formula One Teams Association (FOTA) is meeting with the FIA, with Bernie Ecclestone also sitting in on what is set to be a heated discussion. The FIA is no stranger to defending unpopular regulations, or to compromising them, but this time none of the competing teams have issued support for the initiative. Even cash-strapped outfits like Williams are saying that they will compete in F1 come what may, whilst also pointing out their concerns with the proposed regulations.

There are new teams – ProDrive, Lola, USGP, Litespeed, iSport – which have expressed an interest in joining the sport, and no doubt they are all motivated by the budget cap. However, Ferrari, Renault, Red Bull, STR, and Toyota have all said they’ll pull the plug unless changes are made – that’s half of the current grid. So this is hardly a visionary policy that is set to rescue Formula One from the global recession, as some might have us believe.

Bernie Ecclestone feels that if Ferrari can be persuaded, then the other teams will follow suit, saying that the rest of F1 is “clinging to Ferrari’s apron strings”. That’s one way of looking at it. Alternatively, it would also be fair to say that FOTA has remained unanimous in its objection to the 2010 budget cap, whilst differing only on how they might react to the ruling. With Luca di Montezemulo heading up FOTA, is it any surprise that many teams are following the Tifosi’s lead? That’s what ‘Associations’ do.

I don’t believe that Formula One is about to fall apart, or that Ferrari is going anywhere, however, it does seem that FOTA is realising that it has a lot of bargaining power, provided it stays united. There will almost certainly be a compromise ruling on Friday. Perhaps an increased budget cap that is mandatory for all; or – if the FIA thinks that a larger number doesn’t sound so good – then something along the lines of “a continued commitment to progressively and drastically cut costs as agreed collegially between the members of FOTA and the FIA” will be announced.

That eventuality might mean that some of the new teams back out of the championship for 2010. But if it’s a straight choice between people like Dave Richards maybe entering (a story we’ve heard before), and established giants like Ferrari definitely staying, then surely there’s no contest?

It is true that F1 teams will need to cut costs, and fast. As existing sponsorship deals come to a close during a major recession, it’s likely that times will get tougher, even for the giants of the sport.

Nevertheless, it’s easy to see why FOTA so objects to the rules as they stand. They would force teams to change their organisations – regardless of their current financial status – without any consultation. Then, to add insult to injury, there’s this illusion of choice – namely the opportunity for a team to spend more money, and resign themselves to defeat in so doing.

Maybe the idea is to simply force accelerated change by issuing excessive demands, a favourite tactic of the FIA, but this particular ruling is not just excessive, it also makes no sense. If a two tier F1 were ever formed, then I would at least expect the big spending teams to be fastest.

F1B European Contributing Editor Mark Hallam


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