Revealed: Formula 1's new cost-cutting plan

[bhall]

[...]

What about Toyota ? Of course money IS advantage. I'm just thinking there should be a limit on how much advantage money can buy. Anyone complains here on the ban on exotic materials?

[...]

As much as Toyota Racing proved that money doesn't guarantee success, the Super Aguri-designed double-diffuser proved that ideas can come from anywhere if the regulations are lenient enough to allow it. After all, ideas are free.

Perpetual iterative refinement, on the other hand, is both expensive and the inevitable outcome of stricter regulations.

[langwadt]

My experience with these kind of "technical budget controls" result in dominant teams being dominant with smaller margins. They make it cheaper to get your ass kicked and reduce the spread in the field, but actually more expensive to win. It just allocates max funding on unreal expensive little tiny gizmos or super high accuracy wind tunnels.

So I'm really curious, why capping the budget is not the answer to capping the budget?

Auditing works in finance sector, why not here? Can't you have very stiff penalties for lying or hiding expenditures and huge rewards for whistle blowers? Seems like it would be really hard to hide very much. Sure it will happen but it seems more effective than locking in place something technical and just forcing the money into other categories.

big international companies successfully move money around in circles until they end up in place that has no or little tax, I'm sure the same people could do the same for an F1 team

[Cam]

big international companies successfully move money around in circles until they end up in place that has no or little tax, I'm sure the same people could do the same for an F1 team

While MrE did not write the book on 'moving cash around' - he certainly not only mastered it, he probably advanced the techniques as well. Tax offices and courts today have trouble trying to understand how he makes money and where it goes - and this is the guy that runs F1. Let alone the guys under under him. They all know the tricks, which is why the real costs of development can never be capped, competition can never be 'fair'.

In theory, cost capping sounds great. In theory, so does communism.

An interesting point to consider - when did the "Pinnacle of Motorsport" ever mean 'requires high tech cars'.... it doesn't. You could easily put the best drivers, in the fastest cars, all with hardly any 'tech' and it would be enjoyable to watch while still a massive challenge for teams and drivers to master. That was the sport - Hercules in his wooden chariot. Strap fast horses to some wheels and have at it.

All the while the misguided focus is blurred between 'manufacture relevance' and 'spectacle' we'll always get what we have now, and have had for some time.

[timbo]

Perpetual iterative refinement, on the other hand, is both expensive and the inevitable outcome of stricter regulations.

F1 always was mostly about iterative refinements. You get massive leaps of technology, than everyone copies it, then there goes refinement. Also, I'm pretty sure that with the level of technology we are now at there is little space for serious innovations anyway.

[turbof1]

Perpetual iterative refinement, on the other hand, is both expensive and the inevitable outcome of stricter regulations.

F1 always was mostly about iterative refinements. You get massive leaps of technology, than everyone copies it, then there goes refinement. Also, I'm pretty sure that with the level of technology we are now at there is little space for serious innovations anyway.

Unfortunaly we aren't getting massive leaps of technology in f1. Every bit of technology currently in f1 has been pre-chewed by the automotive sector for years. Bhall makes a very good and very real point: the resctrictions block any form of new real tech. F1 is effectively locked into refining due to it.

Going to a half-assed spec series will not change one bit on this, will however destroy f1 at the end of the road. Diversity is actually the only reason for many that they still follow the series.

More restrictions will end up with the big teams extending their advantage, as there will be less scope for smaller teams to diversify into one area to equal the means. F1 nowadays works like an overregulated market: smaller players can't compete because they don't have the means to produce as efficient as the market leaders and due the market restrictions by regulations, targetting a specific piece of the demand is impossible. Result: crowding out of the market and only the big ones stay.

It'll end up like GT1.

[rich1701]

Perhaps Bernie can share his alleged £2bn of outstanding tax owed to the UK government With the teams instead of keeping it to himself.

[GitanesBlondes]

With all the rest of this B*^#sh!t, why are they not considering customer cars (like in the '60s and early '70s)?

We could still have 12-13 teams, but only have 6 or 7 design houses. They only way for teams to reduce their costs significantly is to reduce the number of bums on seats.

Making 4 or 6 chassis from one design is a REAL cost saving!
(And the racing will not suffer. We could have seen Dan Ricciardo in a Red Bull chassis for the last two last years giving Seb a run for his money...)

Yes, the teams with customer cars are probably going to be a race or two behind the works team in terms of development, but they could also be doing their own with a much smaller design team at a significantly reduced cost!

Ironically, the chassis is not a terribly expensive cost. Last I heard it was in the £1m range per chassis.

No, that's not where costs are going to be saved gentlemen. Talking about customer cars is a great sound bite that totally ignores that employing a staff of 400 or more, plus massive facilities, silly "green" engines, and aerodynamic refinement cost far more than 3-5 chassis per season.

Keep trying guys...I figure in another few years maybe 2% of the F1 fanbase might have some understanding of where the costs are concentrated.

Hint: It's not where or what the various journos like Joe Saward or others would tell you. They are nothing more than propaganda tools to be manipulated by the FIA and FOM.

[timbo]

Unfortunaly we aren't getting massive leaps of technology in f1. Every bit of technology currently in f1 has been pre-chewed by the automotive sector for years. Bhall makes a very good and very real point: the resctrictions block any form of new real tech. F1 is effectively locked into refining due to it.

How can it possibly be different? To get serious innovations (and not limited to F1 application) you need to beat the budgets of aerospace and automotive industries. Not gonna happen. F1 rarely (or never) was the origin of innovations.
Anyway, there is physical limit to innovation. Does DreamLiner differ dramatically aerodynamically from 737?
I recon F1 research is advanced enough that given any sort of rules car performance will hit pretty much what is possible in a few years of development.

[turbof1]

With all the rest of this B*^#sh!t, why are they not considering customer cars (like in the '60s and early '70s)?

We could still have 12-13 teams, but only have 6 or 7 design houses. They only way for teams to reduce their costs significantly is to reduce the number of bums on seats.

Making 4 or 6 chassis from one design is a REAL cost saving!
(And the racing will not suffer. We could have seen Dan Ricciardo in a Red Bull chassis for the last two last years giving Seb a run for his money...)

Yes, the teams with customer cars are probably going to be a race or two behind the works team in terms of development, but they could also be doing their own with a much smaller design team at a significantly reduced cost!

Ironically, the chassis is not a terribly expensive cost. Last I heard it was in the £1m range per chassis.

No, that's not where costs are going to be saved gentlemen. Talking about customer cars is a great sound bite that totally ignores that employing a staff of 400 or more, plus massive facilities, silly "green" engines, and aerodynamic refinement cost far more than 3-5 chassis per season.

Keep trying guys...I figure in another few years maybe 2% of the F1 fanbase might have some understanding of where the costs are concentrated.

Hint: It's not where or what the various journos like Joe Saward or others would tell you. They are nothing more than propaganda tools to be manipulated by the FIA and FOM.

I believe Simonds once told, I believe during his passage at Marussia, that it costs 60 million dollars for only running the race weekends of one season. That's a big chunk right there.

[Wayne DR]

Ironically, the chassis is not a terribly expensive cost. Last I heard it was in the £1m range per chassis.

No, that's not where costs are going to be saved gentlemen. Talking about customer cars is a great sound bite that totally ignores that employing a staff of 400 or more, plus massive facilities, silly "green" engines, and aerodynamic refinement cost far more than 3-5 chassis per season.

Keep trying guys...I figure in another few years maybe 2% of the F1 fanbase might have some understanding of where the costs are concentrated.

Hint: It's not where or what the various journos like Joe Saward or others would tell you. They are nothing more than propaganda tools to be manipulated by the FIA and FOM.

Yes, I understand the chassis is relatively cheap. Sorry, I meant actually reducing the number of the design houses with their "staff of 400 or more plus massive facilities", and somehow limiting R&D. These are the most expensive costs from the teams side, I thought this was the limit of our discussion.


From the Bleacher Report in January this year, Last October, according to Tom Cary of The Telegraph, CVC, "Formula One’s largest single shareholder, took a $865 million (£538 million) dividend in 2012," and that, "It is believed that CVC, who paid roughly $1 billion (£620 million) for the sport back in 2006, has now gained more than $2 billion (£1.24 billion) from the sport in the last 24 months."

The CVC are getting this money from the teams, host cities and selling TV rights, but we, the fans, are the ones who eventually end up paying... Just over $43 million profit per race in 2012 come on!!

The very best option would be to get the CVC to re-invest their dividend each year into the teams. I still struggle to understand how you sell the "rights" to something that is not tangible and them make $2 billion from it!

[FrukostScones]

http://www.autosport.com/news/report.php/id/114181

LOL and only two pre-season tests in 2015... in Spain (that is the good point).

How will they sort their troubles out with the new egines in 2015, especially Honda?

As we know engine hardware will change a bit here and there. So 2014 chaos again? puzzled.

[Moxie]

In a related thread I posted:

It is all about the financial incentive. As long as the front teams stand to gain $100 million in prize money and another $100 million in sponsorship money they will spend $199 million to keep the logos of their sponsors in the public eye. They will spends every cent possible to lead the races, put their drivers atop of the podium, and win a championship for their car and driver, but most importantly for their sponsors.

To decrease the cost of F1 the financial incentive must be reduced for the front running big spenders, and the financial gains must be increased for the rear running financially strapped teams. I am not suggesting that winners should not win more than losers, but the inequity of the F1 prize structure is so great that it resembles a Ponzi scheme.

I will add that I also agree with the suggestion that a stable formula is important. The high cost of reengineering everything, every year gives the top tier teams a huge advavtage. With a stable formula the incremental gains made by the top tire teams will tend to diminish. Yes, the top tier team will continue to have an edge, but at least the lower tier teams will have more of a chance to improve their position.

[stephenwh]

Keep trying guys...I figure in another few years maybe 2% of the F1 fanbase might have some understanding of where the costs are concentrated.

Hint: It's not where or what the various journos like Joe Saward or others would tell you. They are nothing more than propaganda tools to be manipulated by the FIA and FOM.

Does Joe Saward really deserve this comment?

[Moxie]

In another thread counter steer wrote:

You would not believe the amount of money thrown at steel wire valve spring R&D in order to survive at current power levels and engine speeds but the rules do not currently permit anything else.

9100 - 9200 rpm for 600 miles on a pushrod motor with a flat tappet and wire valve springs?!?!? Granted the design itself may be outdated but the technology to push it this far is astounding ! =D> =D> =D> =D>

It demonstrates the point that limiting the technology will not lead to reduced costs in F1. Oddly enough, for the sake of relevance, I wish F1 would get rid of the pneumatic valve systems and return to the use of wire springs. It is just not in any way practical to real world application.

[GitanesBlondes]

Keep trying guys...I figure in another few years maybe 2% of the F1 fanbase might have some understanding of where the costs are concentrated.

Hint: It's not where or what the various journos like Joe Saward or others would tell you. They are nothing more than propaganda tools to be manipulated by the FIA and FOM.

Does Joe Saward really deserve this comment?

His propaganda piece on things in Bahrain being on the up and up a few years back told you everything you needed to know about that third tier fat slob. So yes, he deserves every last bit of it. If you call yourself a journalist, you should probably adhere to professional standards, that bring out the very best of the profession. Instead Joe Saward opts to be a propaganda chronicler for FOM/F1 because he one day decided his press credentials trumped any concept of journalistic integrity. Sadly it's something we see more, and more out of the profession at large these days. So I suppose Joe Saward is just taking the sheep (or lemming route if you prefer) that mirrors the arc of the rest of his profession.