Nico Hulkenberg, Renault, Hungaroring, 2019

Budget cap will lock in top teams’ advantage – Renault

2021 F1 season

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Formula 1’s budget cap will arrive too late to close up the field when new technical regulations arrive in 2021, Renault has warned.

An extensive overhaul of the technical regulations is planned for the 2021 season along with a cap limiting how much teams can spend on car development. However Renault’s executive director Marcin Budkowski believes F1 leading teams Mercedes, Ferrari and Red Bull will be able to sustain their advantage.

“What’s too bad is that the budget cap won’t be implemented until the start of the 2021 season,” Budkowski told Engadget. “However, the 2021 cars will go into development this year and next, with no budget cap applied.

“That means there’s a good chance the big teams will be able to keep their lead and reduce the competitiveness, right from the very start.”

However Renault Sport president Jerome Stoll believes the budget cap, which the team has supported, will ultimately improve the standard of competition in F1.

“Lots of other teams will need to restructure because they’re currently way above that,” he said. “And so, that will let us be more competitive with the big teams.”

“Obviously, the transition will be hard, but we think it’s worth it to create more equality between the teams,” Stoll added. “Mercedes is winning everything, and that bores everyone.”

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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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  • 48 comments on “Budget cap will lock in top teams’ advantage – Renault”

    1. It has been pointed out before – the only way for a budget cap to meaningfully impact technical development is for the new tech regs to be finalized and take effect a year or more after the budget cap. That would prevent the situation that Marcin has outlined above, where unchecked development occurs in 2020 for the 2021 regs.

      1. yup, totally agree.

      2. yeah, it’s almost as if they haven’t really thought this through…oh right, that’s what’s been happening for years!

        1. I’m not sure they could have introduced a cap any sooner than they are going to though, for contractual reasons. But of course they are thinking everything through, and it is all very complex. At least they are going in a better direction than BE had them going which is what created the issues Liberty is now charged to correct.

          1. That is indeed the rub @robbie – though perhaps, given that nobody new is joining, perhaps they could still delay the car related stuff to 2022 (not sure it’s not already to late though), and have another year of the current regulations. I am not sure that would be so bad (given the main issue this year seems to not so much be the overtaking itself, as is getting near enough the guys in front to even get to that point).

            Have to agree that while the complexity of it all shows in how difficult it is, there is a lot more thoughts, and better motivations behind the changes than in the BE era.

            1. @bosyber While I’m sure it would not be the end of the world if they delayed the car stuff til 2022, I think that would just invite another year of nitpicking and teams wrangling over the technical regs. Meanwhile the likes of Horner and I’m sure others have been saying for a short while now that sooner rather than later Liberty and Brawn just need to say ‘ok folks, here’s the new direction, like it or not. If not, there’s the door.’ (although it would seem that nobody is anywhere near using the door).

              I’m sure they had good enough reasons to delay things until October, but I think that should be it for the delays and they indeed need to finally and officially spell out the beginning of the new era post-BE.

      3. @phylyp – Agreed. While anything could happen (Brawn), the likely outcome is that big teams have an advantage (Merc 2014) and then the budget cap (engine tokens) prevent anyone from catching up. You and others have said it, but this is backwards.

        1. Engine tokens didn’t prevent anyone from catching up, matter of fact they held Merc back more than the other manufacturers. It is not comparable to this situation with a budget cap.

          @hobo

          1. @megatron – While it is certainly not exactly the same, it is comparable as I described above. There is a massive rules change planned. After which there will be a rule (or set of rules) that limits what teams can do address problems. That is a very good comparison between the two. I am for the budget cap, but it should be in place beforehand.

            I’ll bite on the tokens. Sure, the token system held back Mercedes. However, the tokens held back every other team as well. And Merc had a massive advantage. So even if a team had possible solutions to close the gap 1) they could only work within the bounds of the token system, and 2) Merc could make changes within those same bounds to largely negate any advances by other teams.

    2. Anyone else getting really bored of Renault’s moaning?

      1. yes! It seems to me that they’re already making excuses for a lack of performance for when they new regulations apply. Stop moaning and start using the ‘moaning’-time to develop the car and engine. There’s a reason why “Force Midlands Spyker Racing Point Jordan F1 India” and other teams (among them Renault themselves) are heavily investing in resources and technology right now: with the budget-cap teams will not be able to do so anymore.

      2. More bored of their excuses than Mercedes’ near flawless execution.

        1. Mercedes flawless execution is made possible because of advantages other teams don’t have: the sport provides a heavily tilted playing field.

          Their only competition on equal footing is Ferrari, who get a similarly big (and unfair) piece of the revenue pie as Mercedes get ánd get to be their own works team. Redbull are also a works team and well funded but they are basically buying in an engine supply. Renault do have that advantage, but they are not getting a similar piece of the revenue pie and all other teams are not getting as much as the top teams either (bar Williams who don’t get as much, but more than the other teams).

          So although I do admire the job Mercedes have been doing over recent years, as a fan, it is ruining the sport for me and I know it’s also in large part because of the skewed playing field, rather than just simply Mercedes’ excellence.

          1. The field is not skewed in Mercedes favor, they earn more because they win more and also because they invested more and smarter. Stop crying.

            1. True I wouldn’t single out the skewing towards Mercedes, but I would towards Mercedes, Ferrari, Red Bull, and McLaren, who were all placated with all the power by BE over the CVC deal over a decade ago.

              Then of course when Mercedes nailed the new hybrid Pu above and beyond everyone else in 2014, their advantage was inadvertently locked in with the token system meant to slow development expenditure, but fair game because all the teams had the same chance to nail the new Pu and Mercedes did the better job.

            2. @megatron – Could you possibly look over your Merc-branded glasses for a moment to consider anything outside of the silver team? I was a Merc fan when they started too, but it has gotten out of hand.

              As @robbie pointed out, it was all fine and good for them to show up in 2014 with the best design. They worked hard to get there and they deserved their wins. But the system was set up in a way that delayed any other team catching up. Merc benefitted heavily. If Ferrari are only just getting in the same arena in 2018/2019, that’s too long for an advantage to dominate.

              No one is crying about this. We want better competition. And, honestly, this is what I dislike about a lot of sports. Rabid fans are okay with whatever it is as long as their team is winning. Who cares if it makes races boring or turns off fans. No one is upset with Merc’s abilities. Some of us are upset that F1 is taking so long to try to level the playing field (the FIELD, not the teams). And now that they are trying to, they are going about it wrong again.

            3. @hobo, you could say that Ferrari were getting there in 2017, given that Vettel was able to lead the World Drivers Championship for two thirds of that season.

              Equally, is it not the case that Mercedes’s success has been as much about the flaws that their competitors have shown over the years? We’ve seen people complaining about the way that Ferrari operated in the past, and continue to operate now, and equally there have been times when Red Bull have not been quite as sharp as they’ve been expected to be.

              Indeed, if you look at McLaren, they have been through several hard years due to internal ructions and difficulties in their relationship with Honda, whilst it would be surprising if Renault haven’t been disrupted to at least some degree by the ongoing political infighting within the Nissan-Renault alliance.

              How much of the discrepancy, therefore, is as much to do with factors from outside of the world of F1 that are having a knock on impact in the sport, and how many of those teams have been held back by internal governance issues?

            4. John P Wiederecht
              15th August 2019, 22:17

              Yes but they win more and earn more because they came in with the ability to outspend any team, Ferrari included.

            5. @anon – I think you make a very valid point. Some portion of the past few years of Merc’s dominant stretch has been due to failures of other teams. But the ongoing dominance surely stems from a dominant starting position and rules that favor those already in the lead. They got to their starting position fairly, but the rules protected their lead for the first few years.

              Ferrari’s run from 2000-04 included 2003 where MSC won by 2pts after RAI retired twice in the second half of the season. If that were a one-off Ferrari win, bad luck for McLaren. But it was part of a dominant string of seasons.

              Merc’s current run is in an entirely different realm, in my opinion. 2pts back then was a 5th place. It is not the case in the past 5.5 seasons where a non-Merc car could have moved up a position or two in a single race and it made any difference. The closest it has ever been, by end of season points, was 2017 and it would have required a swing of two race wins worth of points.

              I agree that the other teams need to do better, but the rules have not always allowed that. And, in my opinion, the order of making 2021 changes and then implementing the budget cap will be similarly problematic. Maybe another team will reap the benefits of a starting advantage, but that won’t make it any better.

          2. @jeffreyj
            Spare me the LIFE ISNT FAIR! teenage angst.

            There will always be someone with more money, get over it.

            Some people see a bigger team as an aspirational target. Others (Renault) see them as unbeatable giants. Of course you will never beat those kinds of teams with that (frankly) loser attitude.

      3. Sonny Crockett
        15th August 2019, 10:37

        Yes, I am fed up with their moaning BUT in this instance they are correct.

        The budget cap needs to be in place BEFORE teams can begin development of their new cars.

        Without that bigger spenders get a head-start that is unlikely to be caught.

        1. So as it is they are going to introduce the cap slowly as they cannot make too abrupt a sudden change and expect teams to adapt to that. So how many more years of Mercedes domination in clean air dependent cars that would continue to need these terrible tires and drs to be competitive would you be willing to put up with as they set their budget caps ahead of a redesign somewhere down the line?

          1. @robbie – I see your point, but the “years of Mercedes domination” are going to happen either way here because of how they are doing it. They could have delayed new cars to get the budget cap in place. Merc wins a few more titles. Instead they are plowing forward, allowing development unfettered by budget caps, and Merc could very easily win a those same few titles and more after that as it will be harder to catch up.

            Yes, it is possible that another team will match or better them, but the point remains.

            More importantly, the budget cap could have been implemented by now. It was thrown about heading into 2010. They could have given teams 10 years notice and it still would be implement sooner than this one will be. I’m glad they are making the effort, but I’m not going to applaud them for taking a decade and then getting the order wrong.

            1. @hobo The thing is we are talking about two different entities running F1. So ‘they’ didn’t take a decade. The last 10 years of BE/CVC/4 top teams power had no real desire nor motivation to do anything but talk of budget caps with no real sustainable plan other than to cut testing which meant the have teams simply put that saved money into better and better simulators and more and more staff in satellite locations. The ones in power didn’t take budget caps seriously.

              Now it is Liberty and now, not even two full seasons behind them, and as soon as they contractually can, they are finally addressing what the previous regime would not. So for sure I applaud Liberty (and Brawn) for tackling all the issues at once that we have all known for a long time have needed addressing, and in only a few years of having taken over.

            2. @robbie – I know and I see your point. It does matter who is behind the scenes and that the current owners haven’t been around long so by that measure they are moving fairly quickly. Agreed. But the output matters too. And they could address this in any number of ways. They chose this one which seems backwards. Fingers crossed that we get lucky and competition is close and so the order of rules change followed by a budget cap won’t matter. But they could have also removed (or greatly reduced) the need to cross fingers and hope for the best.

              You keep mentioning (in other comments) about how they are doing things better, using scientific data, and utilizing new methods. But they didn’t see this as a potential issue? It is concerning to me.

            3. @hobo That’s fair comment. I think for me personally I’m just stoked at the potential and am not going to sweat the details too much. If it would have been better in a perfect world for them to take a bit of the punch out of the top teams by capping them before they outbuild the new cars over the lesser teams, I still think the top teams would have come out on top anyway.

              I don’t doubt that they addressed the concept that Budkowski has talked about wrt capping them sooner than later, for if he is bringing it up in this article I’m sure he has brought it up in Liberty/team meetings about 2021’s changes. The capping cannot be done abruptly anyway and is going to be brought in in stages, so as I say I don’t think it would have been possible in such a short time for Liberty to cap teams so quickly and enough that it would have soothed Budkowski’s ruffled feathers.

              All in all I’m just absolutely patient and more than willing to allow Liberty their time to put their twist in the plot and I’m not going to criticize them for all they are trying to do when their plans cannot really be implemented quite yet. I say let’s give them their day in the sun and that only starts in 2021 as far as I’m concerned, when we will actually see the entirely new product on the track, and then beyond that as we see what the caps do and if new entities start talking about joining F1 etc etc. Exciting times ahead and as I’ve said before they are never going to get it perfect such that everyone is totally happy, and it will always be a work in progress, and I’m just thrilled at what I consider to be the right direction for them to go as has been talked about for at least two decades already. I say thank goodness this entitiy came in post-BE and immediately started talking about the very issues that we have all wanted addressed for so long.

    3. How can a budgetcap be monitored or enforced? Isn’t there a way teams can cheat by smart bookkeeping?

      1. You raise a good point. As far as I know there isn’t a standard system which a team has to follow when they do their accounts, and also there are things that are exempted from the budget cap like drivers wages. So yes, I think there is room for improvement.

      2. Yes, I get what your talking. Knowing F1 like we do, for next seasons we will see an increase of accountants on all teams to properly explore all the loopholes on budget cap; the same we have with aerodynamicist departments in the last 20 years!

      3. @jamesbond and they may do so, but if caught potentially face huge penalties. Teams always look for loopholes, and they always will. Doesn’t mean the rules shouldn’t exist though.

    4. Save the planet. No more beef, no more combustion engines powered by fossil fuel. F1…? Is it not time to look at Hydrogen or so powered racing cars?

      1. Hydrogen powered cars use electric engines. We already have FE.

    5. I keep saying it over and over.
      Make the rules simple.
      Simplify the aero rules
      Why should we have loopholes for aero components around the radiator air intake.
      If the scope of aero work is limited, it matters not if you spend $1Billion or $1Million, the outcome will be very similar.
      Improving competition through budgets is a farce.
      I want my car gold plated and with diamond studs, and I am willing to adorn a box or cylinder with it.

      1. This might sound like a popular solution, but it is actually a disastrous one if you think it through a little bit more, imho.

        Yes, loopholes can only exist in when there are rules and they create competitive advantages if found by 1 team and not the others. Although taking away restrictions would logically take away ‘loopholes’, it doesn’t take away 1 team finding a competitive advantage over others which would lead to equally boring domination. The only way to close that gap for the other teams is to throw insane amounts of money at it after failing to find an advantage yourself in the first place by throwing insane amounts of money it.

        The ‘free for all’ arms race will only be affordable for 1 or 2 teams and if 1 of them gets it more ‘right’ than the other we end up with the same boring domination that we see now. Only instead of lapping 7 teams, we might see all 9 others getting lapped. Twice.

        Secondly, without aero ristrictions teams will chase performance from aero gains like madmen, making it entirely impossible for cars to follow closely, let alone fighting wheel to wheel.

        Thirdly, we’d get so many technologies and software in the cars that will outweigh the importance of driver talent 10 times over, which we as fans don’t get to see at all. It would probably make more sense to use artificial intelligence even.

        And these are just a few reasons why a ‘free-for-all’ would be a horrendously bad idea that I can come up with on the spot. I’m sure others with some more time could think of more.

      2. @OOliver I think you are mistaken if you think Liberty and the teams think that they are going to improve the competition solely through budget caps. They do not think that at all. Budget caps are only one of the necessary things they need to pursue in order to improve the long-term health and sustainability of F1 and to help invite new teams to F1.

        Meanwhile they have in an unprecedented way been studying the science of aerodynamics independent of the teams, albeit with their involvement, with two cars nose to tail in a wind tunnel. The new cars will be unlike anything we have seen before in F1.

        At the same time they’re going to improve the money distribution model to help the lesser teams, and again to help make potential new entrants to F1 feel more like they would stand a fighting chance. It is a multi-faceted approach that Libert is taking, as that is what has been needed for a long time.

        1. Okay.
          I can go back and put on my nappies now

    6. Budget cap? What budget cap? There are so many exemptions and caveats it will make little difference. Renault need to make a decision. Either continue with their catch up which will need more cash before 2021.
      Lets not forget this is a sport where money does buy success, they have already spent quite a bit and have good faculties and have gotten a very good team together.
      Or sell up and get out their choice.

      1. @johnrkh

        “Let’s not forget this is a sport where money does buys success”

        So where is Ferrari’s success? What about redbulls? Do they not spend money too?
        If it was that clear cut, Ferrari/Marlboro would cut a check this afternoon…

        Why are so many legit f1 fans falling into the stupid trap of over simplifying f1’s problems? It’s kinda sad. You guys should know better, and this forum should keep its own in check when they make wrong or oversimplified and simplistic comments…

        1. Xcm

          So where is Ferrari’s success? What about redbulls? Do they not spend money too?

          Um gee wiz golly gosh they’re running 2nd and 3rd respectively and way in front of the mid field.
          Ferrari spends a little bit more than Merc both spend more than RB.
          I’ll let you do the researching on the actual size of their budgets.

    7. @drycrust

      Centralize the accounts for all teams into one office. That office then pays their bills from their budgets

      1. @bigjoe, that does then run into the difficulty of defining what “the team” actually is, because that isn’t always clear.

        It is not uncommon for a number of teams to have multiple separate entities associated with them – for example, you might have one company that technically holds the entry rights, another that provides the personnel and equipment for those cars to race and yet another that provides the technical services to the team. McLaren and their multiple subsidiaries is one such example, along with companies like Red Bull, Mercedes and Renault – even smaller teams, such as Racing Point and Williams, have similar structures. What, exactly, does become “the team” in that particular situation?

        The other issue is that, over time, we have seen a number of teams expand their activities and are now working on other activities – sometimes related to other areas of motorsport, and sometimes working on areas outside of motorsport. Where exactly does “the team” start and end there?

        1. @anon I’ve thought about this, but if a team is able to structure itself into multiple companies with outside revenue and just “sells” parts to the primary team company, that’s just good business isn’t it? There’s still a cost associated with designing and manufacturing the parts; but ultimately the parent company as a whole needs to (at least) break even—so even if one of the internal supplier companies is running at a loss to reduce costs to the “team”, that still needs to be covered by something.

          There will be loopholes, teams will get creative—but ultimately if it means they are creating new businesses and revenue streams to exploit such loopholes, is that necessarily a bad thing? Over time these could be clamped down upon anyhow, it’s impossible to get it right the first time; and frankly, attempting to do so and believing it would be is outright naive.

    8. I’m seeing a lot of comments about how this will be like the engine tokens, and that the budget cap will lock in Mercedes’ advantage, but that couldn’t be further from the truth.

      The 2018 budget for the top two was in excess of $400m. For Renault, it was $190m. Compared to a budget cap of $175m. Admittedly, the budget cap has certain exclusions such as driver salaries which will mean the top two wont have to reduce their spend by as much as these figures suggest, but it is clear to see that the top teams will have to reduce their budget significantly whilst smaller teams will be relatively unaffected.

      This is akin to the engine tokens, but only if Mercedes and Ferrari were limited, and Honda and Renault still had unlimited development.

      Yes, Mercedes will likely still have a large advantage in 2021. Probably for the few years afterwards. But with the budget cap, small teams will find it far easier to catch up.

      1. @minnis – The point is NOT that the budget cap is a bad idea or that it will lock in Merc’s advantage forever. The point is that if they had reversed the order of things, that advantage would be smaller to start.

        The current plan is set 2021 rules and let teams develop 2021 cars for the next 1.5 years with zero spending cap. So which teams are going to be able to spend massive amounts of money and time on the 2021 cars? Probably Merc, Ferrari, and RBR (possibly Renault and McLaren if they have funds). Then, 2021 comes, and the budget caps kick in, and if one or more teams is way ahead, no team can spend massively to catch up.

        1. @hobo
          Whilst I see your point (and agree with it), I dont really see what difference it makes.

          We are too close to implement the cost cap immediately, so the only option would be to push back the 2021 regs to 2023 or later. Which would still give us a few more years of Mercedes domination, and no teams can catch up because the cost cap isnt implemented. I dont think it will make an awful lot of difference to be honest.

    9. Electroball76
      16th August 2019, 9:32

      I think the sad truth is there is no easy answer to the issues in F1. Like many things in life it’s built on money, politics and talent (probably in that order). Also the different elements sit uneasily together at times. Is it an excercise in cutting edge tech? Road relevance and greenness? Is it a fair competitive sport? A showbiz entertainment multimedia experience? All? None? Some? Who knows anymore

    10. One thing F1 can do to negate any lead of the front teams after this change has applied, is change tire suppliers. Regardless of the hardware, that should put everyone back to square 1 again.

    11. The day Mercedes get caught up will be the day that they decide to leave. Mark my words. Maybe 1 year after. Once they lose their engine advantage they will leave. I hope not though. I really do. :-) Please prove me wrong. :-)

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