Sergey Sirotkin, Williams, Shanghai International Circuit, 2018

“Williams will close” if F1 doesn’t cap budgets in 2021

2018 F1 season

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Liberty Media has been urged by one of the sport’s longest-running teams not to back down from plans to introduce a budget cap to F1 in 2021.

Williams deputy team principal Claire Williams has praised the proposals from F1’s commercial rights holders which includes a $150 million cap on budgets from 2021.

F1 2021 article
F1 2021: Liberty’s masterplan for Formula One’s future uncovered
However in an exclusive interview for RaceFans following the announcement Williams revealed some in F1 are strongly against the proposal and made it clear how urgently she believes change is needed.

“If I look at it from my perspective, if we don’t do this, then Williams will close, the whole of the company,” said Williams.

She said the team was “lucky” the cap is expected to be a set at a level which means Williams will not have to cut its budget.

“[In Bahrain] I was very positive about it, but then there are some of the people that are very negative about it. We are lucky that this works for us, but it think it probably demonstrates the fact that our team, track performance aside, is a good model of how a Formula One team should be operating in our sport.”

While a budget cap is likely to require larger teams to reduce their staff numbers, Williams stands by the plan.

“I don’t know the exact numbers and yes, of course it’s going to be difficult for teams to restructure and reorganise, and yes, of course the thought of anybody losing their job as a result is not something we welcome in any way, shape or form.

“It pains me to say, but sometimes you have to look at the bigger picture for the sake of the sport.”

Read our full exclusive interview with Claire Williams later today on RaceFans

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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65 comments on ““Williams will close” if F1 doesn’t cap budgets in 2021”

  1. So Stroll’s bankroll ends in 2020 then.

    1. Laurence Stroll is looking at putting Lance at Mercedes. Please note the increasing presence of “Tommy Hilfiger” on the cars and uniforms. Laurence will provide $40 million from Tommy Hilfiger title sponsorship plus another $40 million of personal funds, $80 million per season, and young Lance will be in the second Mercedes seat faster than Ricciardo can late-brake you into a corner.

      1. Fascinating, do you have a link/source for any of that? I’d not put the 2 and 2 together with the Hilfiger deal…

        1. @alec-glen, especially when there is a problem with that theory as far as I can see – didn’t Stroll sell his stake in Tommy Hilfiger back in 2006 when Apax Partners bought the company? It would rather ruin Gary’s theory if it turns out that Stroll hasn’t had anything to do with the company for about 12 years.

      2. Jose antonio Sanchez suarez
        18th April 2018, 14:57

        Good point.

      3. For what little I know on this, I thought the Hilfiger thing is with LH, not Mercedes. Further to that Mercedes does not need to take money for a driver, but rather can well afford to pay a driver and likely will be looking for someone better than Bottas to help get them back to their 1-2’s on the grid and the podium. There is no indication whatsoever that Mercedes are interested in a relative rookie, but there are indications that they want and need VB to do better for them than he did last year.

        Anyway…likely just more cynicism from Gary.

      4. Stroll Snr has no interest in TommyH anymore; he confirmed that to me last year in Suzuka. That is the way he works: he partners designers/brands and helps them gain recognition, engineers an IPO and moves on. He did that with Lauren, Kors, TH and others.

  2. So, this is probably a good time for me to ask a question that’s been at the back of my mind for some time.

    If I exclude manufacturers (Merc, Ferrari, McLaren, Renault), and I exclude marketeers (Red Bull, Toro Rosso, Haas), all of whom derive non-financial benefits from their F1 presence, we are left with Williams, Force India and Sauber.

    It is a bit naïve to assume those 3 teams are in it for the love of the sport. They have to be in it for the profit, I assume? As in, run a team such that (operational costs + salaries + etc.) < (sponsorships + FOM money). So, what is the state of their finances in recent financial years? Is that something that can be accessed and studied? Are they breaking even?

    It's just that we keep hearing all this noise about cost caps to improve competitiveness, but have no insight into the P&L position of the actual entities. It might not bear direct relevance to the cost cap discussion, but is something that makes me wonder what goes on.

    1. Williams is a public company, the financial reports are public:

      1. @nordic – many thanks, very insightful info there.

      2. Cash at bank and in hand = £333


        1. @shimks – those are in thousands. So, £300,000. But yes, a far cry from the funds that bankroll the top 3 teams.

          1. @phylyp Haha! Still terrible but at least a lot better than I thought!

    2. Williams is a public company, the financial reports are public:

  3. @phylyp: I did the numbers for elsewhere for 5 years. What those teams did is TRY to operate within their budgetary constraints. That meant taking funded drivers, cutting back on R&D and headcount unless abso necessary and relying on other income streams – Williams with Advanced Engineering, Sauber through third-party work and FI on shareholders. If a housewife is told the household budget is being cut due to circumstances, the family doesn’t starve, they just don’t gorge on 1st grade steak any more. Same here.

    1. Many thanks, Dieter.

    2. Unless the family’s household budget is cut to the point where they can’t feed its members, which sometimes happens (though nowhere near as often as households going overbudget due to not cutting back on discretionary spending enough).

    3. Dieter

      A question I’d like you to ask Mercedes or Ferrari if you ever get the chance.
      Neither the FIA nor Liberty can force ether of them to spend less than $600m on going racing, only from spending it all in F1 … so nobody need be retrenched from either company’s motorsport departments if they don’t want that.
      Surely if they spend $150m + non-listed expenses on F1, that still leaves $350m for them to spend elsewhere, while not reducing their benefits from being in F1 at a reduced cost.
      Staying in DTM, joining WEC / LM24, or increasing their GT programmes gets them more exposure and R&D access, keeps everyone employed, and improves the F1 show.
      No one is forcing them to retrench their staff, so why are they trying to make that a stumbling block to the new rules?

      1. I’ve had those discussions with various teams – and you’re right: they could conceivably go into other categories as you mentioned. The big question is whether those categories deliver bang for buck and are compatible with their images/marketing programmes; if not they don’t enter and will need to scale down their operations.

  4. Then let it.
    These sort of threats are nonsensical, they’re as sad as when Ferrari threatens to pull out. Williams are an underperforming farce which people still love because of their heritage – they have to move with the times. When Force India and Haas can do much better with similar or lower budgets, that means that Williams are the cause of their own fall. Instead of putting the onus on the sport’s regulators, they ought to look at their own side. Points in F1 are still what scores money – and scoring points with useless drivers is impossible. F1 is still a profit machine in its essence, not a labour of love – this counts for the teams as well. If Williams fail, it is by natural selection. F1 has no ‘too big to fail’ – even Ferrari would go down if they routinely underperformed.

    1. @hahostolze I wouldn’t like to see Williams fold, but I largely agree with what you said – certainly from our point of view that’s how it looks. This made me laugh a bit:

      it probably demonstrates the fact that our team, track performance aside, is a good model of how a Formula One team should be operating in our sport.

      Given that track performance goes hand in hand with a team operating well

      1. I don’t want to see them fold at all. But it is ludicrous for them to suggest that money is the only factor holding them back: much as I do indeed want a more simplified F1 where the margins between first and last are smaller and less determined by money, teams have shown you can reach for higher echelons on a similar budget. And as you rightly say, Williams are not demonstrating what a good F1 team is.

    2. Do you honestly think F1 is a profit machine for anyone other than the commercial rights holder? Racing teams don’t make profits unless they perform a vast amount better (commercially and/or sporting) than what they budgeted for that year. For most of the paddock it’s written off as marketing spend, the rest a combination of whatever benefits they can pull out of the advanced engineering and increased shareholder/team value.

      Also, Ferrari could never fall in the current climate regardless of their on track performance due to their historical team payments and political influence. Even at their worst case scenario they could just make more production cars ;)

    3. scoring points with useless drivers is impossible

      It’s not Impossible-
      I used to score womp rats with my T-16 back home, their not much bigger than points!

      1. the force on your side you had young grasshopper

  5. They just suck.

    But it should not take more than 150 big ones to run two cars.

    We can all praise wonderful tech F1 develops but 98% of speed it can be developed at Williams like budget.

    Spectator wont notice the difference.

    Mercedes should simply restructure 600 employes to road cars and make excellent sportscars. I bet there is money in that.

    People who would not retain jobs could easilly find employment elsewhere. Not like they do not posses excellence.

    Only issue is, big teams would not be able to simply buy success. Mercedes got excellent return on their investment for example.

    1. There is if you don’t put 600 people into doing the sportscars…

    2. @jureo But surely none of the current F1 teams are ‘buying’ success. Success in most sport essentially creates a gravity well as everyone wants to join and have a piece of the pie. Yes, Ferrari are ‘given’ a bonus for being Ferrari, but they’re not ‘buying it’. Also the changes in the rules come 2021 are set to prevent them ploughing it back into the team.

      Mercedes ‘ROI’ was excellent, but they didn’t ‘buy success’ – they bought a cheap team that just happened to have won the championship the previous year and then spent 3 years doing sod all with it, effectively biding their time on doing better than everyone else following a planned rule change. That’s not ‘buying success’ – they worked for it.

      Mercedes downsizing would likely result in employees moving to other teams in the F1 Valley who would pay ‘an F1 wage’ for their services. They can’t just move 600 people ‘to road cars’ because a) their road cars are not manufactured in the UK and b) most F1/sporting expertise is not applicable to road cars.

      Ferrari downsizing is an even bigger problem – where would Ferrari engineers and staff go, other than to the dole office (or the Italian equivalent), given STR won’t likely have room for them?

  6. If Williams closes, as Claire Williams mentions, not only the F1 program, but the entire company, that is just poor management I’m afraid.

    They have their Advanced Engineering department, which is a bit like McLaren’s applied technologies, aren’t they making a profit on it? Shouldn’t it be independent from the F1 program?

    If they are tight together, I will have to disagree, and it is not a good model of how a Formula One team should be operating in our sport.

    1. All i can suggest is that you wait and read the full interview. According to my info McLaren Racing also makes a loss, MAT notwithstanding. This is a legacy of CVC’s (mis?)management of F1.

      1. I will wait in that case @dieterrencken

  7. Tony Mansell
    18th April 2018, 10:05

    They are in it to go racing that is all. Such a snowflake generation view. Everyone must be in for the money !!

    Enzo only made road cars to fund racing. SOme people like racing cars. And those who aren’t privileged enough to race them like watching them race. THAT is all.

    1. @ Tony Mansell – then let them race in a series that is affordable to them. Formula 2, for instance.

      Also, what’s with the personal attack – “snowflake generation view”?

      1. I’d argue that’s almost the opposite of the ‘snowflake’ (genuinely hate that derogatory term) view. The boomer generation viewpoint is usually seen as all about the money where the current millenial generation is often seen as wanting do what the enjoy (like racing cars for the sake of it for example).

        1. Tony Mansell
          18th April 2018, 11:28

          I had no idea there were only 2 generations alive George May!!

          Phylylylp: F1 is and has been affordable to them, until the manufacturers come in and kill everyone. Ferrari is Ferrari, for most of their existence they have come up with ever more expensive ways of not winning. As Alain Prost says ‘from the outside you wonder how they ever lose, from the inside you wonder how they ever win.’

          I found your ‘let them eat cake/do f2’ particularly distasteful and there’s you raising your petticoat over the word ‘snowflake’

          1. Tony Mansell, the fact that you feel it necessary to start abusing others with rather childish remarks makes it look like the main person with an attitude problem around here is you. Funny how it’s those who throw around terms such as “snowflakes” tend to be the ones who are swiftest to anger and throw the biggest tantrums…

            Besides, as Motorsport Magazine once pointed out, for a long time Williams were one of the teams that was driving much of the cost inflation in the sport in the past, such as the electronics arms race that they spearheaded back in the 1990’s, or their heavy spending when BMW was picking up the bill for them back in the 2000’s. They seemed rather happy with the heavy spending that was going on in the past when they were on top of the pile.

  8. How does pay drivers work in the budget cap scheme? If a driver like stroll brings something like 20-60 million per year does that count against the budget limit or is it like the ferrari bonus that they’d need to declare as profits?

    1. @socksolid – That is a good question, and I’d guess they just be treated as another sponsor (but Dieter/Keith can clarify).

      1. @socksolid @phylyp if it counts as a sponsor does that mean it is exempt from the budget cap? If so that means more pay drivers in the future

      2. @strontium – no… the cap is on the expense side of things, not the income. So income via sponsors, pay drivers, crowd-sourcing are all allowed, but teams can only spend up to $X million.

        I think @socksolid was exploring to see if there’s a loophole in the rule – since driver salaries are exempt from the cap, he was probably seeing what happens when a driver is paid a “negative” salary (i.e. Stroll).

        1. No, there is a cap on income in a way too if Ferrari are not allowed to spend all they earn.

          1. that’s is called tax on profits

          2. DrG, I also ran some pretty large divisions of major companies in my previous life, so am aware of the accounting and tax advantages of having loss-making entities. The mere fact that your companies played those games does not mean everyone does.

            Equally, the structures of Williams and McLaren are (were in the latter case until Technology Group and Automotive were merged) such that there were only two operating centres: racing team and engineering consultancy. When both make a loss, there is a fundamental problem. If you look at the latest number for Williams you’ll see that WAE made 5m EBITDA and the race team 16m. Even subtracting 8m for a one-off driver deal, that still leaves 8m EBITDA. I fail to see how your theory stacks up in this case.

            McLaren previously made a profit on racing – something R Dennis regularly pointed out – and only stopped turning profits when it lost sponsors and income due to poor results. Again, your theory does not stack up.

        2. Not entirely Dieter

          The racing teams are one of the few entities within a group structure that can argue it will make an annual loss (against a long term investment/write down type loss) in order to reduce taxation on profitable other parts of the organisation that are directly serviced and promoted tby the central racing team.

          It’s a complex accounting stunt and works well. In other words it’s in the group benefit to do such.

          That fact it also enables those teams to threaten closure at the same time is nicely helpful.

          Claire may have “sympathy” but I see making 3-5000 highly skilled people redundant across Ferrari and Mercedes to ensure a company such as Williams can keep pulling millions each year in dividends and have fun racing nothing more than a cynical ploy. They don’t stop competing when they leave the track – as can be seen.

          And before anyone starts I was a board director of a second generation engineering company operating all over the world. Operating budgets little different to Williams. We ran several loss making entities for exactly those reasons. Sometimes even the clarity of public accounts hide an incredible number of advantages that the racing public are unaware of. Let’s not forget Williams have around three times the staff of say FI for a reason and it’s not to perform at the back and make a loss all the time.

          There is often more than meets the eye to such commentary.

          1. Awesome insight. This is how Mercedes makes a profit, while having a huge budget on its F1 department.

          2. Thank you @jureo.

            I am frequently amazed at the naive veiwpoint of commentators.

            Macca are operating in exactly the same way.

            It’s maanaging taxation vs racing budget frankly…

  9. The cap is a cap on spend, not income, so any positive balance is profit. One of the objectives is to level the field, another is to build sustainable businesses

    1. How will the following scenorio be policed:

      Mercedes “roadcars” or McLarens “Indycar division” (hypothetical) are instructed to research braking materials, cooling etc. It so happens that they make good progress and develop a really good breakpads. They then pass on this information to the F1 racing division as it just happens to be exactly the type of material they require (for free). Or perhaps even make the brakes etc and sell it to the racing division for $1. Merc/McLaren suddenly have the whole breaking system/research at zero cost.

      Or Williams make there own brakepads and do there own development and sell use this on there F1 car but also re-coup some of the cost selling to other racing teams. Does the entire cost od=f the research development come out there cost cap budget.

      Bembo supply Rebull brakes for free in exchange for a sticker on there car – how does the cost cap work in that scenorio? etc etc etc…

      1. Interesting questions, Cronies. I cannot say how it will be policed, but can offer an opinion on how it might be.

        Mercedes “roadcars” or McLarens “Indycar division” (hypothetical) are instructed to research braking materials, cooling etc. It so happens that they make good progress and develop a really good breakpads. They then pass on this information to the F1 racing division as it just happens to be exactly the type of material they require (for free).

        The FIA would – as part of expense accounting – check to see who the suppliers are. And I would assume that this information is in some form publicized or accessible. So, if Mercedes Roadcars GmbH is selling the braking system at $1 to Mercedes F1, then other teams can reasonably ask them to offer the same components at the same price.

        Alternatively, if Mercedes refuse, then the FIA would treat that supplier as a captive of the F1 team, and FIA’s forensic accountants might dig further into the whole $1 figure by asking who are the employees involved, their costs, etc.

        It would not be a perfect system of policing, but would pose enough hurdles to make Mercedes consider if it is worth it.

        Or Williams make there own brakepads and do there own development and sell use this on there F1 car but also re-coup some of the cost selling to other racing teams. Does the entire cost od=f the research development come out there cost cap budget.

        Similar to the above case, the FIA would seek to draw a line between the brakepad R&D expense (carving them out as a separate supplier) and the sale price of it back to Williams F1 and other teams. In turn, then funding of the group that does the brakepad R&D would also be explored – to see if they are paid for via F1 (which would mean they are covered by the cost cap).

        Bembo supply Rebull brakes for free in exchange for a sticker on there car – how does the cost cap work in that scenorio?

        Such quid-pro-quos are often contractually written down as an income and expense that perfectly cancel out – so it would turn out that Red Bull pays Brembo $1 million for brakes, and Brembo pays $1 million sponsorship. In such a case, the $1 million that Red Bull pays Brembo would be included in the cost cap. If they choose to be clever and say that the cost and sponsorship are only ten dollars, then the FIA will ensure that the system is made available to other constructors on similar terms.

        Policing a cost cap is for sure not going to be easy. And part of the discussion between now and its rollout will be with smart financial people and lawyers thrashing out the nitty-gritties of what is allowed and not. The good thing is that if Brawn is involved, and with his experience across Ferrari & Mercedes, he will be among those who also try to head off loopholes.

        Then again, we already have technical limits such as CFD computation limits, wind tunnel limits, that are already policed. Further, someone who is determined to breach the cost cap will be able to hide things – even if for some time (just see the shenanigans that Wall Street has been up to!). Teams will have to balance the reputational cost of being caught out vs. the not-certain benefits that are on offer.

        It does sometimes feel that for every technical member likely to be laid off from the big 3 due to a cost cap, a similar number of people are likely to be employed by the FIA just to police such a cap! :-)

  10. A budget cap is nothing more than a crutch for the teams that under perform or make poor decisions. A large part of the budget comes from sponsors and sponsors usually come with success on the track. So if a team is doing well they’ll have more to spend on racing and if a team does poorly they’ll have less. This should not change if F1 is to be something more than a spec series.
    There is a proposal to increase the revenue that teams receive and if Williams can’t be competitive with that added income, perhaps it would be best if they were sold or folded.

  11. Just a thought… maybe we ought to let F1 run for a few years with the more equitable profit distribution, and then see how teams find themselves? And after that decide if a cost cap is also warranted. In the Bernie era, we had two wrongs (unequal prize distribution + no cap), maybe we don’t need to right it all in one fell swoop?

    1. @phylyp I think that we will have that regardless. I don’t think they will be able to enforce a cost cap, so at least if they distribute fairly the prize money it will be a step in the right direction.

      If later they can enforce a cost cap, or something similar, I think @freelittlebirds is on to something with his comment below. It could be a solution. (he actually says clever things when not blindfolded by his bias to a specific driver or hatred towards a certain team, wink wink)

    2. Claire Williams appears not to think there is time for that (note the “equitable distribution” can’t start until 2020 due to existing contracts).

  12. I hope that if that dark scenario comes to be, Williams decides to move over to IndyCar and keep its operation and a good bunch of its employees at work.

  13. Michael (@freelittlebirds)
    18th April 2018, 14:16

    I like Liberty’s prize schedule but I’m not sure about the budget caps.

    Teams that join the sport and want to do well, will obviously need to spend more money than the existing teams so it might deter well-heeled teams from joining and struggling.

    I would prefer Liberty to institute financial incentives to remain within a budget that are tied to the prize schedule. The more a team spends relative to the position in the WCC, the less they receive so teams have an incentive to remain within a bracket to avoid losing, say, 20 million in prize money.

    Mercedes exceeds a suggested budget of $200 million for coming P2 in the WCC (let’s say that the $200 million cap applies to the top 3 teams). They have spent $240 million over the season. The penalty for overspending is $50 cents on the dollar so they receive $20 million less in prize money which, and this is the kicker, lower teams end up getting evenly. This allows teams to overspend but doing so helps the other teams under them in the WCC. Every dollar they spend over the budget hurts their team directly and in the next season.

    Budget caps also run the risk of inviting teams to get very creative with the accounting aspect especially by teams purchasing other teams – a team pays 1 billion to buy another team instead of 300 million (with payments) and you suddenly have 700 extra million over all the other teams that are not part of your direct budget. The audits will have to be crazy and regulations will need to always favor the sport and the caps, not the loophole.

    Example – Ferrari might buy Haas and spend 50 million a year developing upgrades for their own car that are shared by both vehicles. This might create team consolidation like Walmart where Ferrari owns 4 teams and Mercedes owns 4 and Red Bull owns the rest. In turn, this may create better racing or worse racing but I’m pretty sure we’d all prefer to avoid that situation where 3 teams rule the sport forever.

    Liberty will need to address consolidation and budget overruns to prevent acquiring other teams and they need to address entry into the sport to allow teams to enter the sport and be competitive without the help of another team (Haas got help but Porsche wouldn’t).

    It’s a tough nut to crack but the budget incentives in conjunction with a tier budget bracket are a lot better than the idea of a budget cap – not bad for a morning coffee, right? :-)

    Finally, drivers’s salaries shouldn’t be part of the budget to allow better teams to attract better talent and pay them the money they deserve. Otherwise, top drivers will be penalized the most under budget caps. Their compensation should fall under a diferent budget and be audited to ensure that teams don’t use that as a means to inflate their budgets and get extra money through a driver. Pay drivers’ contributions that are used by the team should count as part of the budget with the exception of their own salary.

    1. drivers’s salaries shouldn’t be part of the budget

      @freelittlebirds – driver salaries, exec salaries, key staff salaries, etc. are all exempt from the budget cap.

      I like your idea of a target budget and a penalty for exceeding it.

      1. Michael (@freelittlebirds)
        18th April 2018, 14:41

        @phylyp thanks for the info about the salaries – yes, key staff should also be excluded (e.g. Lauda and Prost) – we want teams to be able to bring in these legends without hurting their team. They should draw the line because soon everyone could be designated as key staff just to avoid being on the budget :-) Maybe cap the number of exempt staff to 10 and allow previous F1 drivers to be added to any team.

        I also like the wording that you used – namely “target budget”.

    2. I disagree with any kind of cap or target budget. If a teams performance/name/heritage etc., is worth $500 million a year to a sponsor then I believe the team should be able to take the money and use it. F1 should be a meritocracy and how much a team can get from a sponsor and put toward their racing is a part of that.
      Perhaps Liberty should consider things like allowing the teams to run different liveries on their cars, or allowing a team to purchase a chassis once every ‘X’ years. Things to help small teams raise funds or to jump start their failing programs.

      1. Michael (@freelittlebirds)
        18th April 2018, 17:34

        I do see your point that if a team gets a sponsor of $500 a year, they should be able to use it but what’s the likelihood that a midfield or a backmarker team would get that kind of sponsorship. Audi or Porsche might but it’s not a realistic proposition for Haas, Marussia, or Sauber.

        Actually what refer to as meritocracy is more of having the deepest pockets – not necessarily being the best which is what a meritocracy would entail.

        Of course, Mercedes and Ferrari can get better sponsors than other teams because the brand recognition that they bring to the table is huge. That becomes a vicious cycle because they get more money, they perform better and that translated into more visibility (race, pole, podiums, interviews).

        How can a team like Sauber compete with the Mercedes brand? Even one of the legendary teams like McLaren is having trouble even as its producing cars which are redefining the supercar market.

        So having some target limit and a way to enforce it would be good.

        We also don’t want a team to run out of budget at the penultimate race while competing for the championship and not be able to compete. They should be allowed to exceed the budget but not without some penalty of some sort that gives them an incentive to be careful as the expenditures over the budget will affect them in the next season since they’ll get less money from the prize and the other teams will get the lost money helping them compete.

        1. @freelittlebirds, your point of the vicious cycle is well taken. That’s when Liberty and the FIA need to think through any proposed rule changes carefully. For example, in the late 90’s, Jordan GP and Stewart GP were able to compete for podiums when teams could spend as much as they wanted and test as much as they wanted. Some analysis should tell the “powers that be” how and why. Then the question is, can it be replicated.
          I fear that the proposed rule changes are not being thoroughly thought through and they’re planning on making a large number of changes in a very short period of time. Neither of which is typically a recipe for success.

          1. @velocityboy +1

            And it gets worse. Liberty has that $8 Billion loan on Bernie’s used car to pay off. So, they’re under some pressure to make F1 ‘Great Again’. For their shareholders. Not so much the teams. Or fans.

            PR tripe to the contrary, Liberty are more concerned about getting more revenue to fund their poor business investment. They have never mentioned giving up a significant part of their 50% share of F1 revenues to assist the smaller teams. New boss same as the old boss – with a different accent.

  14. I’m not a fan of cost caps because they seem a bit artificial – we want the best drivers in the best cars, not “the best drivers in the best cars which can be built for x dollars” – and I don’t think the correlation between spending and success is 100% (e.g. Toyota and Honda in the past). I also wonder how much of a legacy the currently rich teams will be able to carry forwards to a cost cap era i.e. Ferrari etc. can currently do much more research into potential solutions and will retain that knowledge if the cost cap comes in. They should, therefore, be able to spend more efficiently than the smaller teams for the first few seasons as they will have a better understanding of what does and does not generally work.
    I also wonder if the cost cap is a reaction to a problem which may well disappear on its own. As far as I understand it, the problem with the smaller teams is that sponsorship revenue has fallen for everyone since the crash, so those who rely on it are suffering relative to those who have a corporate sugar daddy. However, if (when?) another recession hits, reduced profitability will presumably limit the amount Mercedes etc are willing to throw at F1, narrowing the gap somewhat. It is surely easier for Merc, for whom F1 is a “nice to have”, to pare back or leave, than for a Williams for who it is the be all and end all.

  15. Having budget caps just makes good common sense. Most of the major sports in the U.S. have salary caps for obvious reasons: without them, a handful of the richest owners would sign up all of the best talent and totally dominate their leagues. It would get increasingly boring if only a handful of teams were always winning and the other teams had zero chance. Eventually, interest would fade. Oh wait….

  16. A better idea than a budget cap to me is do what indy are, v8 supercars, nascar etc do. One chassis, but then allow freedom in mechanical and aero setup on that one chassis. Why can’t they all use one cheap gearbox and other parts? Who cares if it goes against the ‘dna’ of f1, the dna has constantly been evolving since the 50s to the point that now its not traditional f1 motor racing with manufacturers having so much control. A spec series doesn’t have to mean its the same car for every team, a lot of engineering freedom can still have a big spot in spec series.

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