Reaction to the budget cap proposal

In my blog yesterday I posted some of the details of the 2010 regulations, focussing on the budget cap. Several teams have now had their say about the regulations. While many are in favour of the budget cap, seemingly all are against the two-tier system that it creates. The cap is voluntary, and those who agree to it will have greater technical freedom. This means two sets of rules, and is something that even the independant teams are opposed to.

The Williams team were one of the biggest supporters of a potential budget cap. They have been struggling to attract sponsorships and had made a loss over the previous couple of seasons. However, they were not keen on the two tier system used to introduce the budget cap. “Williams has supported the introduction of a budget cap since the idea was first put forward early in 2008,” said Frank Williams. “Since then FOTA has made tremendous steps forward on costs but the rationale for a budget cap has also grown even stronger.

“We would like to see all the teams operating to one set of regulations and under a budget cap in 2010 and that is the position we will be advocating within FOTA when we meet next week. We understand that this will represent a serious challenge for some of the teams but we expect that FOTA will work together to find a unified and constructive way to take the FIA’s initiative forward.”

This view was supported by McLaren chief MartinWhitmarsh. “As a member of FOTA, Vodafone McLaren Mercedes is of course supportive of FOTA’s recent efforts to reduce costs in Formula 1,” said Whitmarsh. “Equally, we recognise the excellent work done recently by the FIA in the area of cost-reduction. Having said all that, we understand that some teams’ operational budgets may still be unnecessarily high in the challenging global economic situation in which we now find ourselves.

“Nonetheless, we believe that the optimal solution – which may or may not include a budget cap, but which ideally would not encompass a two-tier regulatory framework – is most likely to be arrived at via measured negotiation between all parties”.

Sponsors are hard to come by in F1 at the moment

Force India owner Mijay Mallya was also guarded about the two-tier prospect. “In principle Force India welcomes all cost cutting initiatives and budget caps, but we must fully investigate and understand the implications of the current measures proposed by both the FIA and FOTA”

It is clear that the majority, if not all, of the teams are against the two tier system. There is also going to be a dead heat, as there are five independant teams who will want the budget cap and five manufacturers who will be less keen. A key issue is that some teams need the budget cap to remain operational – Williams are struggling for revenues at the moment as I said before, and Brawn GP have only got two sponsors (although with their current level of success itis unlikely to remain that way for long). Teams like that could go bust without a budget cap. It isn’t simply a convenience, it’s a necessity.

This decision by the FIA was always going to polarize opinion and create debate. I said yesterday that I believe all of the teams will sign up to the cap eventually. Ferrari have written to the FIA stating that they believe the contract they signed with the FIA has been broken by this legislation, and the FIA has swiftly rejected that notion. The next few months will be filled with such arguements about the budget cap introduction, but I think that the only logical outcome is for the manufacturers to sign up to the budget cap.

It is clear from the reactions that I’ve mentioned that the teams do not want two rulebooks. With five independant teams wanting to sign up, and three more set to join the series, they outnumber the manufacturers. Either the manufacturers will pull out, or they will sign up. Toyota and Renault are already considering their futures in F1 due to financial pressure, so a budget cap would appeal.

McLaren will probably go with the majority, as they sit halfway between constructor and independant (they are 40% owned by Mercedes, who’s parent company have just announced a $1b loss. Yes, one billion dollars). That leaves Ferrari and BMW. If BMW were to leave, I don’t think too many would mind, as they have only recently joined. Ferrari could prove the sticking point.

There will be many twists and turns still to come as this story unfolds. It would be nice if this blog could be about what happens on the race track a little more, but as usual the team bosses seem more focussed on scoring points away from the circuit.


~ by onemoresolo on May 1, 2009.

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