WhiteBlue wrote:Andrew, your point reminds me of Bernie. He thinks democracy is not worth bothering with because it is not working perfectly. The resource restrictions may not be ideal but it has considerably reduced the budgets and kept F1 viable through a huge crisis.
WhiteBlue wrote:Your personal believe that the RRA is not enforceable has not been supported by facts or published expert opinion. The teams have said that there are grey areas in the actual agreement but grey areas do not mean it is unworkable. It is also said that potential loop holes will be closed by the RRA extension which is nearing completion according to FOTA.
Budget deadline still looms for teams
By Jonathan Noble and Dieter Rencken Friday, January 28th 2011, 14:30 GMT
Uncertainty over whether any Formula 1 teams did overspend last year will remain until at least early March, Ferrari team principal Stefano Domenicali believes, with the final deadline to submit budgets still several weeks away.
The last few weeks have been full of speculation that some outfits - including world champions Red Bull Racing - may have overspent in 2010 and therefore breached the terms of the Resource Restriction Agreement (RRA).
Although it had been thought that suspicions above overspending had been fuelled because accounts had been lodged with the Formula One Teams' Association (FOTA), the final deadline for doing so is until the end of February.
That means that Red Bull Racing's insistence that it complied fully with the RRA cannot be proved for several more weeks - although Domenicali said he hoped that in the end it will be shown everyone did hit their targets.
"It [the budget limit] was effective for our dimension, and for all the big teams we need to be very transparent on that," he said at the launch of the new Ferrari at Maranello on Friday.
"We are going in the right direction [with a new RRA] and we know it is something we feel obliged to respect. We have always done that and we are in the right path that, at the end of the season, we are on the target that we have all agreed to respect.
"Every month we have to give FOTA's secretary our figures, and then at the end of February there is the closing of the fiscal year. So for 2010, the dates and figures will be given at the end of February."
Domenicali said that his team's observance of the RRA had resulted in its budget being slashed by around one-third - although he voiced some concern about the amount of resource that was now needing to be put into aerodynamic development.
He confirmed that Ferrari had recently used Toyota's wind tunnel facility in Cologne to help with the development of new technologies.
"There is too much focus on aero development, and that has a huge impact on car performance," he said. "This is opposed to the requirements of a GT car and this is something we should consider, especially in respect of future regulations."
He added: "We have given up a lot and followed new directions. Knowing other teams really want to win, I think we should respect the sports rules, its technical rules, but also the engagement and commitments that are part of agreements that we have entered into
"This is something we will control, check and be sure that no-one is going against these rules."
Formula One set to bring in a cap to team budgets, says Red Bull boss
Red Bull's Christian Horner has indicated that a cap to each team's budget may soon be introduced to Formula One
Christian Sylt and Caroline Reid
guardian.co.uk, Saturday 12 February 2011 21.59 GMT
Red Bull team principal Christian Horner (left) says talks about a budget cap for Formula One teams are 'heading in the right direction'. Photograph: Paul Gilham/Getty Images
Formula One is on track to get the equivalent of a cap on team budgets to curb excessive spending according to the team principal of Red Bull, the winners of last year's championship.
Data from F1's industry monitor, Formula Money, shows that the sport's 12 teams had an average budget of £107m last year, with Ferrari the biggest spender, having £248m at their disposal. However, Christian Horner of Red Bull told the Observer that discussions by the Formula One Teams Association (Fota) about a cap on all areas of spending are "heading in the right direction".
In 2009 Fota vetoed plans to introduce a £40m budget cap and instead came up with an alternative known as the "resource restriction agreement" (RRA). This limits areas such as staff numbers, size of computer storage space and the amount of days cars can be tested on track. However, there are significant exclusions from it such as marketing costs and engine development, which alone accounts for around £220m of annual spending.
Horner said: "We agree with restricting activity but don't cherry-pick ... let's do a transparent once-and-for-all deal with this." He indicated that this would be equivalent to a budget cap and when asked if there would be a difference between the two he said "that's a very good question".
The teams currently self-police that they are working within the spending limitations and Horner said: "The other major problem Red Bull Racing had with the RRA was that [other teams] wanted to introduce a penalty which just encourages infighting. The little teams see an opportunity to make some income and you end up with a situation of whistle-blowing. You can see it at the moment, it is putting the teams against each other which is not what Fota was supposed to do."
Fota are currently investigating claims that Red Bull Racing overspent last year but Horner denied this saying "contrary to speculation, we completely adhered to the RRA within 2010". To maximise lead time, development work on F1 cars is done the year before they are introduced and in 2009 Red Bull Racing's costs increased 8.8% to £156.9m.
Horner said: "Red Bull Racing had their cheapest ever year in Formula One last year in terms of their net spend and that will diminish further this year. The RRA saved us a lot of money." Winning the world championship had boosted the team's sponsorship income and they have "signed a couple of interesting deals which will be announced in the next couple of weeks".
The limitations of the RRA have steadily increased every year since it was introduced in 2009 and Horner said: "It has been a very good focus because now you have some financial regulations that have forced the teams to be efficient whereas previously there were inefficiencies I guess in all of them."
andrew wrote:So MrM gets his way then. Just another step towards F1 becoming a single spec. series.
Rob01 wrote:Andrew, incorrect. Max wanted a budget controlled by FIA. The teams wanted to control their own destiny by making their own rules. FOTA is handling this on THEIR terms now and FIA is out of the accounting loop. So Max didn't get anything he wanted.
The teams are divided with the FOTA seven on one side and five teams on the outside in Ferrari, Red Bull, Toro Rosso, HRT and Sauber.
They are working together to try to control costs and the signs are that this process is about to enter a new phase where the policing of the Resource Restriction Agreement will fall under FIA management. This is something that all the teams, with a couple of exceptions, are in favour of. Ferrari support it as do Mercedes and McLaren. For it to become part of next year’s regulations it needs to be passed by a majority and that is something being worked towards at the moment.
This way, should anyone be found to have overspent, there would be the possibility of some sanction from the FIA, which FOTA did not have and which therefore made it pointless in the eyes of Ferrari.
Q: Monisha, the Swiss have always been renowned for being good with numbers, so how long can the smaller Formula One team survive?
Monisha Kaltenborn: Well, I think the question is not about how long we can survive, but how much longer it will take for the big teams to understand that the smaller teams are just as important to Formula One as the four big ones. If the situation of the smaller teams is not good - and I would go so far as saying that we are all in a similar situation compared to the big four - then this is not good for the sport. The challenge is to create parameters which will allow all teams that are here today to run sustainably, to stay in the sport and to have the ability to use whatever assets they have to compete at more or less a similar level.
Q: What in your opinion has to happen to achieve that? Whenever there is a new, must-have technical development, even if it’s worth only a fraction of a second, the big teams go for it whatever the cost, to the disadvantage of the smaller teams. Is a budget cap really the answer?
MK: At the end of the day, yes, I think so. We started it with the Resource Restriction Agreement (RRA), and that in itself was already an important step, but of course it is far from the only one you need. We now have to evolve it to the next step, and in my view the future should indeed lie in some kind of budget cap under which each and every team could do what they want to, because we all have different strengths. Looking at our team, for example, we have a good infrastructure and a good wind tunnel, so it would allow us to benefit from that. Others have other assets. Overall I think it would make Formula One more interesting as it would also mean that we would all use different strategies and take different approaches to the business and the sport.
Q: What time frame are we talking about?
MK: I think very soon. I think that we should have the next step already in place for next season and take it from there. Next season for me should already see a major step forward in the financial feasibility of a team. When the current Concorde Agreement comes to an end at the end of this season, I think it would be a good time to set some kind of rules.
Q: What you say sounds logical, so why has it not become reality? What is the biggest hurdle?
MK: I think the biggest hurdle is us, the teams ourselves! (laughs) But I think by now even the big teams should appreciate that Formula One with four teams would not be overwhelmingly attractive to fans. That would be a very wrong message. So my hope - and I have to say that most of them have already supported the RRA and have now signalled that they would give their support to taking the next step - is that something is happening very soon.
There is some support for focussing spending limits on the ‘tangible’ elements, like the number of updates each team may make per year, but the big teams believe that the RRA ultimately failed because of the impossibility of measuring ‘intangible’ things, like how much support a manufacturer backed team gets from the manufacturers’s off-site resources.
Putting the RRA into a new structure whereby it is managed by a third party and subject to arbitration in the event of dispute is the logical next step – it’s being discussed now – and one that sounds like it might be agreeable to the likes of Ferrari and Red Bull.
A budget cap remains a step too far; however much the midfield and backmarker teams might want it.
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