Teams “screwed up” chance to bring costs down

2013 F1 season

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F1 team principals said the sport had missed an opportunity to get costs under control and warned about the steep rise in expenditure that will come next year when a new engine formula is introduced.

“Next year’s power unit package costs are double the price of this year’s and we are always talking of reducing the costs,” said Toro Rosso team principal Franz Tost.

“Regarding now that power unit, on the one hand we must say Formula One is the peak of motorsport and we should come with new innovations. I think the new package from another point of view is quite economical and is quite interesting – but it costs us a huge amount of money.”

Tost added it wasn’t just the change of engine formula that was pushing costs up for 2014: “The teams are stupid enough to decide to do tests during the season.”

“This is totally a waste of money because we have eight test days and as soon as the car goes out on the track it costs money,” he said. “But the teams want to do it.”

“On the one hand they’re complaining they don’t have money, on the other hand, they throw it through the window. It’s a little bit difficult to understand for me but we were voted down because we were against the tests.

“And who wants the tests? The rich teams. As usual.”

Lotus team principal Eric Boullier said that although budgets had come down, the disparity between the richest teams and the rest remained large.

“I was not there personally but last decade car manufacturers were in this place and the lowest budget in F1 was around $250m and the highest about $400m,” sad Boullier. “Today it’s not the case any more and the smallest budget is around $60m and the highest is around $250m. But still, it’s?? you multiply by four.”

“If you want to be competitive you need to spend unfortunately some money, because you cannot afford if not, and you cannot be competitive then… This is a circle: you are not attractive, you do not bring in any new sponsors… so where is the balance?”

The Formula One Teams’ Association was set up in 2009 to give the teams a single voice. But Caterham team principal Tony Fernandes said they had missed the chance to improve the teams’ financial situation and were paying the price now:

“The teams had a wonderful opportunity to try and create a fair, equitable split so that the sport is sustainable,” said Fernandes.

“I’m obviously in another sport where I think the difference between the top and the bottom is not as great as between the top and the bottom in Formula One. If you look at the [English football] Premier League, the winner of the Premier League share of prize versus the team at the bottom is not as spread out.

“I think teams had an opportunity but I go back to my very first point: that teams looked at things on an individual basis as opposed to working together in FOTA and trying to find a win-win situation for everyone and create a very healthy environment in a sustainable sport.”

“We screwed it up, it’s as simple as that.”

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Keith Collantine
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34 comments on “Teams “screwed up” chance to bring costs down”

  1. I wonder whether F1 might take a leaf out of MotoGP’s book and borrow the idea of CRT – so-called Claiming Rule Teams.

    If a team had the option to buy a competitor’s car for fifty million euros (for example) there would be no point in spending more than that on the car. Under this scheme, the FIA could relax all sorts of regulations to stimulate new engineering ideas, as the rewards would go to the most efficient teams with the most innovative design and engineering, and not simply to those who can afford to spend the most.

    In fact most expenditure would probably go on drivers – having the very best would be essential. And put an end to pay-drivers.

    1. The teams would never agree to that.
      Customer cars has been voted down by teams because some of the Mid-field teams like Williams want to build there own car & don’t want to be beat by another team simply because that other team brought the best car.
      And if the rules were opened up then it would increase cost’s massively & see the gap between the front & the back increase as the top teams who could afford to spend on the development of new engineering ideas would simply throw all there money into that & would also spend a fortune to hire people & equipment to do the R&D.

      It would also likely result in a team finding something which would give them a big advantage over the rest which would make the perceived Red Bull dominance of the past few years look like a close title fight.
      Go back to the early 90s, Williams spent a fortune developing there active suspension & other electronic systems & it resulted in 2 years of utter dominance with the performance advantage in qualifying often been 2 seconds a lap over anything else.

    2. I think that’s be similar to the customer cars we used to have. But Williams and Spyker, I believe, opposed teams like Toro Rosso and Super Aguri using other team’s cars, fearing they would be pushed down the grid, so the rules were changed to prevent it. Funnily (or sadly), Williams are doing worse now than they were then, customer cars or not.

      I actually wonder if someone who follows MotoGP more closely than I do, believes the CRTs are good for the sport?

      1. @rsp123, @david-a, @gt-racer
        The CRT in MotoGP has no other function unless keeping the grid full, I don’t think they have more use. They’re not competitive, at all. In the premier class, it looks like there are different levels: the working teams and their satellites, then CRTs.
        Formula One innovation makes things interesting. They race not only in the track but also in garage and the factory. Designing new parts, simulate it with wind tunnels, and stuffs. Some can walk it easily, some failed terribly. Some with financial struggle also somewhat can keep up with the frontrunners. Backmarkers such as Marussia and Caterham are way down the field but at least they design their own and play within the same regulation.
        Bear in mind, so called customer cars would easily pull so called pay driver even more. I don’t think it’d be great.

      2. I follow motogp closely, I see CRT as a second division, and dont really see them as motogp bikes. However they are planning on bringing the motogp class back into the same restrictions of CRT in a few years time, eventually when this happens there will be a large grid of competitive bikes (hopefully). So for the future it is good, but currently it doesnt really factor. The only thing it does provide is a proving ground for new talent.

    3. Top Gear had this episode several seasons back, where James May went to Finland and, among others, covered this rally series where cost control is achieved by ensuring everyone has the claim to buy another driver’s car for 1000 euros. Works beautifully for cost control there, but in this case, of course, constructors would have to manufacture extra cars – I wonder how it’d work if a small team suddenly came up with a brilliant breakthrough. They would probably have to contract out the manufacture of their rivals’ cars – and hope the design does not leak.

  2. The new engine package & the cost there bringing is down to the engine manufacturer’s, There the one’s that wanted the V6 turbo package (Its why Indycar went the same V6 Turbo route having consulted with engine suppliers & why DTM are likely going the same way) with all the ERS systems.
    A big part of why Honda are coming back is because of the new engine rules, They helped come up with them because it takes F1 in the direction the manufacturer’s want.

    The teams also could have vetoed the engine change if they felt they could not afford it yet they didn’t, they agreed to it & only started making negative noise when it became too late to stop the change because of how far along the development process was for both 2014 car designs & engines.

    1. Honda was not in the recent engine meetings, so IDK what you mean by “they helped come up with them” as in the engine rules. They weren’t even present.

      1. They were not in the most recent meetings but they were a part of meetings in the past where they made there views on where they wanted future engine specs to go (Smaller capacity turbos with more energy recovery & more overall fuel efficiency).

  3. The way prize money is distribuited in F1 is simply baffling. The best teams get the most money, while the smallest teams get the least – anyone with half a brain can forsee the disparity such a system creates over the years, yet for some (probably political) reason the smallest teams can’t fight against it, and somehow the powers-that-be in F1 think this is a good system, you know, keep the ‘important’ teams healthy and get rid of those pesky smaller operations. They give most of the money to those who have the most, the teams at the back will never catch up and will eventually fold, and we will either be left with 14-car grids or Luca di Montezemolo will finally achieve his 3-car ambition, and both scenarios would be a loss for the sport.

    I love this sport, but if there’s one thing that makes me sad about it short-sightedness and stubborness of teams, commerical rights-holders and rulemakers alike.

    1. The top teams should always get the most because they did the best in the season, why punish success?

      I agree the prize money should be leveled out a bit more but the best teams should get the most money and if a lower team does well and moves up the pecking order they should be rewarded.

    2. It’s TV money. The teams that win on consistent basis are the most popular; their drivers are the most popular; and as a result they contribute to 95% of meaningful action on your screen. If you were to choose to watch the entire race from Alonso’s cockpit, or Van der Garde’s cockpit – you would choose Alonso.

      That is the reason top teams claim more of the TV money. Unless the teams down the order crash, or ignore blue flags, they contribute very little to action ON TV screen, meaning they get less money. Anybody who suggests an equal distribution system is a lunatic because top teams are doing 95% of work of getting those TV viewership numbers up. It’s their fairly earned profit.

      1. TV refuses to show as a Caterham fighting for position even when there is nothing interesting to watch at the frond. So is not like the coverage is correct anyways. They get 95% because FOM seems to really like ignoring the back-markers even when the viewer wants to see them.

    3. The rich get richer and the poor get poorer.
      It makes sense for the teams who preform well to get the most money. They deserve a reward for doing so well. However, I agree with Zantkiller that the prize money should be leveled out a bit more.

  4. Exact same thing which hit the BTCC 13 years ago. Teams complaining about the costs, but then Ford and Prodrive ship off to Jerez in January and spend £10million for their year. For a national touring car series.

    It seems as though giving teams a say in the same rules which govern them is a conflict of interest.

  5. Boullier says budgets were massively greater 10 years ago, then says the extra 10-20 million for new engines is unaffordable, there’s a disconnect somewhere. I see the problem more as F1s change of direction from an engineering development competition to an entertainmemt for profit.

    1. Cannot say I understand his comments either, I had the impression, that Renault the DNA of the team now known as Lotus, along with the Japanese manufacturers, were the main force behind the newer smaller turbo engines.

      Now I liken F1 to supercars, nice but not affordable by us mere peasants , which have large engines, sometimes with turbo’s bolted on to give even more power, for use by the 1%ers who don’t care how much fuel they use or care what it costs.

  6. So Red Bull, Mercedes and Ferrari should be capped to a budget, just because the likes of Lotus and Toro Rosso cant produce better results.

    1. Shreyas Mohanty (@)
      21st September 2013, 3:59

      @austus No, they should be capped because the lower teams are struggling because of F1’s financial structure. It’s a vicious cycle : No money -> No perfornance -> No money -> …..

    2. Well, he didn’t say that.

      Let me ask you this. Can a team on a $60m budget compete with one on a $250m budget?

      1. @mike, The answer is yes sometimes if there is sufficient room in the formula for innovation.

        1. While I agree, sometimes the team with the bigger budget can do their best to catch up with said innovation.
          Re: Brawn GP and Red Bull 2009.

          1. @beejis60, but in the meantime the smaller team has its moment in the sun and attracts backers to help it become a big team.
            Re; Brawn GP 09 – Mercedes 10.
            Actually I was thinking further back to when the rules were more open and minnows like Coopers Garage put the engine behind the driver and beat not only Ferrari but them all, and Jack Brabham realising that a production based 3L V8 would produce enough power to be competitive in most races and reliable enough to make up for the deficit over the season, also beating all teams to the championship.

          2. Bad example as most of the development of Brawn was done with Honda money, which was plentiful.

    3. Just look at what Lotus is actually achieving with less than half the Budget Ferrari have currently @austus and you see that your statement is wrong.

      The reason to cut cost, is to put a top on the maximum spending so that the gap is not enormous and not just a spending war but a more fair playfield for engineers to come up with clever ideas and drivers to find that extra tenth by the way they develop and drive the cars.

  7. It’s a bit rich of Tost to complain about the failure to keep costs down. The teams had the power to make it happen, but Red Bull opposed it, and because they own Toro Rosso, they effectively got a second vote on any legislation and were able to kill it.

  8. Tony Fernandes was “verballed”, he did not say ” we screwed up” in relation to allowing the new engine expenses, he said “we (FOTA) screwed up” by not standing together to negotiate a greater share of the revenue from FOM. A point I have been constantly harping on about for years,sorry.

  9. The main income of Italian “Serie A” (football) is TV broadcasting rights. They are shared like this.
    40% is split in equal parts among all the teams.
    30% is split proportionally according to last season results.
    30% is split proportionally according to last 5-6 years result & for “historical” results.
    Also some negligible share goes to “Serie B” (second league).

    It’s not the it ensures a tight competition per se, but I think it would do good in F1, especially in ensuring the the gap doesn’t grow just because of the feedback loop of lacking money for not being competitive in the previous year.

    1. Giving more money to the teams will not solve the problem of high costs. Giving more money to the teams will simply exacerbate the problem, because they will have more money to spend.

      1. I wasn’t trying to address the cost rising, but merely the revenue repartition between the teams and the gap increase that may (I believe it actually does) arise because of that.

        Maybe there’s a sweet spot in terms of budget that represents the least amount of money a team need in order to compete at least for winning GPs (providing they use them wisely and cleverly), and beyond that it doesn’t make much of a difference 50 mln $ more or less. Certainly this sweet spot isn’t at the 60mln $ the smaller teams are rumoured to be run at.

      2. What @stefanauss proposes is more in the way of giving a more level spread between who gets what than increasing the money involved.

        If the teams would get a larger portion of the money in the sport (say 80% instead of 62% planned under the new CA) those extra 18% should be used to give the teams who get less now more and help them get a tad closer to the top.

    2. @stefanuss, 40 + 30 + 30 = 100%, whereas in F1 it has been 50% divided amongst the teams, 50% to Bernie/FOM, this is the real difference, and it is this split now to be 62% to the teams + 38% to Bernie/FOM that Tony Fernandes who owns a football team referred to as a screw-up by the teams.

  10. Tost: The teams are stupid enough to decide to do tests during the season […] And who wants the tests? The rich teams. As usual.

    Fernandes: We screwed it up, it’s as simple as that.

    Translation: Admittedly, we are a bunch of spineless idiots who don’t even know their own g.dd.m interests, and we have cynical rich teams dictating to us, but hey, we’re taking part nevertheless. Let’s just keep on carping and wringing hands year in, year out.

    A truly beautiful “sport” with truly worthwhile participants.

    1. Its funny when this is coming from Tost, who was one of the “small” teams that defenitely sealed the end of FOTA as a working group when they followed their bread-givers (RBR for Tost and Ferrari for Sauber) out of it.

      So he can complain all he wants, but he is really part of the reason why the big teams were able to decide on that more or less between themselves

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