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17 Mar 2009, 13:56 (Ref:2417367) | #1 | ||
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FIA introduces budget cap
http://www.autosport.com/news/report.php/id/73743
Very interesting indeed - a voluntary £30 million limit in exchange for total technical freedom. |
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17 Mar 2009, 14:01 (Ref:2417376) | #2 | ||
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Very interesting.
I welcome any design freedom with open arms. The question of how it will be policed remains however. Sort of Fantasy F1 becomes reality. |
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17 Mar 2009, 14:12 (Ref:2417389) | #3 | ||
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I should revise that - it's not 'total' technical freedom, more 'extended'. We won't be seeing the return of a BRMesque H-16 engine, for example...
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17 Mar 2009, 14:26 (Ref:2417410) | #4 | ||
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17 Mar 2009, 15:12 (Ref:2417450) | #5 | ||
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So that is effectivly 2 sets of technical regulations then. Multi-class racing, but sharing each others points. Why do we have this exactly?
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17 Mar 2009, 15:16 (Ref:2417457) | #6 | |
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17 Mar 2009, 14:12 (Ref:2417392) | #7 | ||
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Impossible to enforce. Large manufacture can easily get more money as say it was for road car development.
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17 Mar 2009, 14:19 (Ref:2417405) | #8 | |
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Not impossible,but most certainly difficult.
The consequences of going over-budget would be certain exclusion from the championship. Q & A with Max. http://www.fia.com/en-GB/mediacentre...msc_qa_mm.aspx |
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17 Mar 2009, 21:09 (Ref:2417760) | #9 | |||
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Quote:
How can you possibly check? Won’t there be all sorts of under-the-counter payments and avoidance mechanisms? MM: We went into all this very carefully some time ago. We involved forensic accountants from Deloitte and Touche as well as financial experts from the current teams. The vast majority of payments are traceable and any benefits in kind can be valued. There were a number of meetings. It became clear we could do it. The problem was getting the current teams to agree a figure. Also, the majority wanted a lot of exclusions such as land and buildings, the team principal's salary and the drivers. We would also need the right to carry out very intrusive audits and impose severe penalties for overspend. However these difficulties no longer arise because each team will now be able to choose whether or not to run under the cost cap. A 'vast majority' but not all of the payments are traceable. |
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17 Mar 2009, 21:18 (Ref:2417764) | #10 | ||
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17 Mar 2009, 21:21 (Ref:2417767) | #11 | |
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£30m seems ludicrous. Surely that would easily be eaten up by transport, tooling, salaries etc before they even thought about designing a car?
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17 Mar 2009, 21:38 (Ref:2417785) | #12 | |
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Well, this is the start. I don't like the start so much, it's too low cap and they should force teams to sign up. Also they shouldn't include hospitality and driver wages.
Hospitality because it brings a lot of cash to the sport, through acquiring sponsors. Driver wages, because some people invest in their kids' career, because they believe the kid will earn like Kimi. But the budget cap is the way for more technical freedom, more interesting races due to changing balance, more teams and F1 would be profitable investment at the end of the day! Do you really think F1 teams would be smarter than huge corporations like Enron? |
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17 Mar 2009, 16:11 (Ref:2417491) | #13 | |||
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2nded.
Quote:
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17 Mar 2009, 14:15 (Ref:2417398) | #14 | ||
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Very very shaky ground. Don't know how they will police this. It is near on impossible. Can see a lot of naming and blaming over this rule in the future. I mean there will be some loop hole that clever lawyers will find which could give one team a big advantage.
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17 Mar 2009, 14:16 (Ref:2417400) | #15 | ||
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It'll be interesting to see how it plays out. Could, for example, McLaren or Ferrari set up a 'B' team and give them parts at a knock down bargain basement rate? The FIA seem pretty confident about it working and are involving proper auditors, so you never know...
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17 Mar 2009, 15:17 (Ref:2417459) | #16 | ||
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Yes it will be very hard to police, but think about the inginuity that engineers want to prove they have again!! Remember the good old days, way back when!! I don't...cause I wasn't alive. I've heard about it when marshalling though
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17 Mar 2009, 15:32 (Ref:2417467) | #17 | ||
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A team needs a minimum of about 24 people to operate during a race weekend. If they are on £30k each (which is low for the job they are doing) then you are already at £720. Now you have to add catering accomodation, press, team principles and the "higher up" guys who will command a much larger salary. And that is before you add the crew back at the factory and the drivers. Kimi already has a $50m salary.
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17 Mar 2009, 15:53 (Ref:2417478) | #18 | |
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I'm guessing the 30 million is toward development and testing of the cars themselves. Salaries and at track non-race activities would be hard to fit in that budget and still be able to attract the big sponsors. Will definitely be hard to manage, but will be helped out by HUGE penalties for even the appearance of fishy balance sheets. It has to start with exclusion from races and build from there.
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17 Mar 2009, 16:08 (Ref:2417486) | #19 | ||||
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Quote:
Quote:
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17 Mar 2009, 16:10 (Ref:2417489) | #20 | ||
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As stated earlier though - what if....
Mercedes spend millions on the testing for a new engine theory. This then gets utilised on, say, the SLR. From this knowledge, which is proven to be on a road car, Mercedes then pass the technology details for a minimal fee to the F1 engine team. I'm pretty certain that in terms of competition, Renault can't demand that they are entitled to Mercedes' engine development for a road car, otherwise more companies would be using a Mazda rotary engine. |
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17 Mar 2009, 16:26 (Ref:2417500) | #21 | ||
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Both codes of Rugby in England have salary caps.
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17 Mar 2009, 16:28 (Ref:2417504) | #22 | ||
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17 Mar 2009, 16:30 (Ref:2417506) | #23 | ||
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There is no labor law issue: The teams are free to decide which salary they pay their employees. However, if the salaries move them over the budget (not salary!) cap, they lose their technical freedom.
From what I know, the salary cap in the US major sports leagues is really a salary cap: a regulation of the team's players (and them only). The other costs remain unaffected. Here it is the other way round: it is a budget cap, with salaries only being affected indirectly. Besides, different countries, different law systems. You cannot apply US standards to French institutions. Heck, even in Europe we still have hugely different law systems, though the EC is trying to harmonize some aspects. |
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17 Mar 2009, 17:00 (Ref:2417533) | #24 | |||
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If not, seems like an easy way to skirt around this rule. The team pays the driver a nominal fee but his real money is coming from the sponsor. Although that's going to open up sponsors having more control over driver selection than they do now. I understand the intention, I just don't see how they intend to actually do it. How is the FIA going to tell that a team did not budget 30 million pounds but instead 40 million pounds? How are they going to tell that wind tunnel time cost $40000 and not $25000? These teams are controlled by well-off millionaires and billionaires who've made hiding money an art form, all they are going to do is understate costs, i.e. hiding money, and how will that be combatted as the FIA does not have the right to inspect teams' balance sheets? Not to mention we have a ton of carmakers in the series, and they can most definitely hide money in other business arms. |
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17 Mar 2009, 17:03 (Ref:2417538) | #25 | ||||
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Quote:
This system does prevent some forms of creative accounting like employing WAGs, as tried in Rugby. Quote:
Bear in mind this is a voluntary cap. What would be more effective is a supply price cap to privateers. |
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