So, the budget cap is here, now what ?


FIA managed to trigger a serious magnitude earthquake with some of the decisions made by the WMSC yesterday. A day on I feel that the largely negative response was caused not so much but what was decided but how… I mean who knew yesterday morning that the “most wins take all” system was even being considered by FIA ?

The voluntary GBP30 mil budget cap however is something that perhaps should not be so surprising. Max Mosley made it clear on several occassions that the cost cutting and cost saving proposals from FOTA do not go far enough. Some radical decision was clearly coming and something radical was expected to come out of March 17 WMSC meeting.

The solution that FIA finally adopted did not exactly come out of blue. It has been talked about for quite some time and mentioned it even yesterday morning, with almost accurate estimate of the USD40 million budget cap, a half day ahead of the decision being made by FIA. If guys had the information I do not believe the teams had no idea what was coming…

No matter what, in the usual FIA fashion, FIA pushed ahead with what they wanted without caring too much about the reaction the decisions would trigger. The voluntary budget cap was approved for 2010. The foundations for new double tier F1 have been laid (vee8 calls this “Formula One.1 and Formula One.2″ :-) ). Can this work ? I don’t think too many people believe it can, and I also do not think this is what FIA wants. I believe that Mosley’s ultimate goal is to have the budget cap imposed on all the teams, something that even FIA did not dare to implement right away (even with one season notice). Mosley and FIA are probably aware that GBP30 million a year may not be a figure high enough for all current teams but still a workable figure to start with. Here is the possible planned scenario, (words of Bernie Ecclestone):

“We are going to restrict teams that want to be covered by that cap to 30 million pounds, but we are going to try to help them with technical advantages. Then some of the big teams will ask why they are spending 300 million. In the end the truth of the matter is we should just have a cap for everybody, although maybe 30 million is a bit too low.”

So, what is going to happen next ? All the big teams will probably keep spending what they want to spend in 2010. Smaller teams will make their decisions based on their financial situation. Those who do not have ambitions to win races may go for the budget cap, the rest probably will not, at least not in 2010. But the possible poor initial response is unlikely to deter Mosley and FIA. It is obvious from the Q&A published yesterday that they believe several new entries may be attracted into F1 thanks to the new budget option of running an F1 team. It is possible that some bigger spenders will turn to the cheaper option after a while too, especially if all they can get for big money is midfield glory that capped budget may achieve as well. These teams will provide FIA with proof that budget cap can work. And that will probably be the moment when the “two set of rules era” of F1 will end and the budget cap will be made compulsory for everybody.

Here is how another article summarizes the budget cap:

All things considered, the FIA has come up with a highly elegant solution to the problems of the sport. That may be a blow to the political ambitions of FOTA, but it is a sign that the FIA is still a powerful force to be reckoned with. The best way forward remains for all parties to work together for the good of the sport and we can only hope that this will be what happens.

Whether this solution is highly elegant remains to be seen. Running F1 with 2 different sets of rules when even one we have had so far manages to create controversy after controversy, that will be interesting to watch. Enforcing and policing the budget cap is something that is surely easier said than done, no matter how confidently  Max Mosley talks about it. But what are the alternatives to budget cap ?

– Allowing customer cars ? Did not work …
– Further increasing number of standard parts ? Who wants F1 to become specs series …
– Paying teams more money from FOM coffers ? Not likely anytime soon …

Looks like we will have to live with the budget cap, and not for long in its voluntary guise …

15 Comments Post a Comment
  1. Jose ArellanoNo Gravatar says:


    how do they plan to equalize perfomance?? and to what performance they would equalize… Ferrari or force india ?

    • F1WolfNo Gravatar says:

      how do they plan to equalize perfomance?? and to what performance they would equalize… Ferrari or force india ?

      this is the worst part … I think even FIA has no anser now. who will be faster, Ferrari with 18,000 rpm rev limit and perfect aero, or capped team with not so perfect aero but 21,000 rpm unrestricted Cosworth V8 ?

      • F1WolfNo Gravatar says:


        the thing is, that FIA may be aware that some of the teams may actually welcome this idea. if anyone plans to leave it would be the manufacturers, and their lomg term commitment to F1 has always been questioned anyway. with lower spending the less rich teams however have better chance of survival, and that if anyone leaves someone else will be able to come in… I think one reason why FIA dared to make this step is that they believe that chances of breakaway series are much much smaller than few years back with GPMA ….

        • SarahNo Gravatar says:

          It is not possible for a breakaway series at this point of time as the teams have signed on a MOU with CVC till 2012 for participation though the MOU is not legally tightly binding.

  2. KotenokNo Gravatar says:

    My mind is twisted, the words are clear and plain English, but what is it about??? Firstly, why they make such a splitted category? And second what for they want two regulations? Smaller budgets are right, the best way to make the sport rather competitive. More freedom at the regulations are right, to evolve the cars properly to face the future and not stay in the past. At the end, the problem is: development and improvement of engineering demands a serious amount of funds. How they will do it? I agree that teams want to stick to the possibility to spend higher budgets if they have the money for the investment, why should they pair their technology programs with others??? (note: this is pure sarcasm). Seriously, it is not easy to be as competitive as they are with such serious budget cuts, that would match more the performance relative to all the teams, but however teams which stick to a “not lower budget” would gain some kind of POWER.

    I don’t know… Is really the Pandora’s box open??? I don’t know what will be next coming from FOTA’s leaders now. There will be a fight within? Will be the good understanding created lately due the economical duel divided because of that?

    Kotenoks last blog post..Alexander is now a member of F1Wolf Club

  3. bmwf1guyNo Gravatar says:

    Many many other sports have budget caps with tremendously rising costs and they get buy after a few grumbles here and there. 30 mil is just too low for a cap and I would like to know how that figure came about.
    So I can accept a budget cap enforceable through all teams as a trial run to see how it works out. Take the data in a couple of years and re evaluate.

    Two rules? The cap or not the cap doesn’t ad up to me at all.

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  4. F1WolfNo Gravatar says:

    I agree that 2 sets of regulations are going to create a mess, a big mess. But this would not be first time this happened when F1 was moving from one rule to another. Remember the end of turbo era when some cars used turbo engines and some did not before the total ban was imposed. Or the move from V10s to V8s when originally Miinardi (then Toro Rosso) were allowed to use V10 for one more season (with restrictions applied). But all this dual rule only lasted for limited period of time. Looks like this may be the plan with the budget cap too.

    Mosley and FIA surely made many people unhappy, but they clearly decided that budget cap is the only way to go. And imagine what would have happened if they said that from 2010 all the teams have to be covered by 30 million budget cap ? In some teams that would not even cover drivers’ salaries (or compensations if the teams decided to let the drivers go to …).

  5. Jose ArellanoNo Gravatar says:

    i think cost cutting and better revenues are the answer. not budget cap,, its just too complicated.. and yes. two kinds of cars.. i just dont like it at all!!… i was sooo excited for the new season. i now im just,, i dont know disapointed

    • F1WolfNo Gravatar says:

      well, I think we all agree about the need to cut the cost. but Mr. Mosley is clearlyt fed up with teams not taking it seriously, so he decided the best way forward is come up with something outrageous, something that surely would attract attention and get people talking …

  6. SebastianNo Gravatar says:

    The Budget Crap is like fidgeting with the safety pin of a hand grenade. It’s not a question of IF but WHEN it will blow up in our face.

    Consider joining my protest through the facebook group Formula 1: OPPOSE the FIA 30 MGBP Budget Crap

  7. TimmieNo Gravatar says:

    Bringing in a budget cap does make sense for the future of F1 racing and giving them the ability to research within that budget cap and have unrestricted design status is also a good thing. But for 30 mil? That figure sounds half useful….if they didn’t have to include the drivers salaries!!!!

    Maybe if the budget was like 50 mil (come on we have teams who spend 200 mil now and are comfortable with that) and drivers salaries weren’t included in the budget (they can be subsidised by sponsors etc…) maybe then we would have a more useable budget for teams to develop and research to make their cars better as the season progresses.

    The FIA definitely comtinues to fail at understanding the fans of the racing and have constantl failed to recognise that although change is needed, that their idea of change is not one that will improve the sport and move it in a direction where people will actually want to compete in the category.

    For a new team entering next year, they can easily take the budget cap, but what happens when they become more competitve in the following seasons and want to hire a driver who is actually decent? No one on the current grid would be able to go to that team even if they wanted too purely because no one can pay the driver the amount they worth (based on current salaries).

  8. TimmieNo Gravatar says:

    (String posting here, lol)
    That kinda underlines another dig that the FIA are taking, which is at the driver salaries. And i saw something mentioned about this before on another website that spoke about comparative salaries to the English Premier League players. Classed as the best place in the world to play football, and they are (though highly paid) deservedly so as that is what demand does. In F1 the pinnacle of motor racing, we have the too old buggers of FIA and FOM, wanting to incorporate driver salaries into the budget cap of 30 mil. With everything else the team has to spend to just get the car working for a full season, how much does that really leave a driver with to be paid??? This then forces drivers to leave the F1 series and take up other motor racing sports in lower categories purely because they can be paid more or even the same amount, but get a whole lot more enjoyment out of it just from not being involved in the circus that the FIA is creating.

  9. TimmieNo Gravatar says:

    (Another string post)
    F1 in the past two seasons has been great to watch, even with all the controversies and crap that has gone on, we have had two years of good racing, down to the last race performances to determine the World Champion. The new point systme open up a lot of IFS and BUTS, which may be what the powers that be want, but it puts a whole lot of fans noses out of joint based on how we portray the sport.

    Nothing would make Bernie happier than to cheapen the sport, while he continues to make millions himself. If the driver salaries are to be included, then we will lose the best drivers to lower categories and end up with a field full of Joe Blows who drive like Yuji Ide does and the only entertainment we get is how much they crash into eachother like they are driving tin tops or something!

    Unfortunately the old duddy Ecclestone doesn’t look like kicking the bucket anytime soon, and the scary part is even when he does, he probably has a will somewhere that outlines the next thirty year plan for the sport and how he wants to make it even worse. This guy is going to still be making millions from the grave!!! Worse still is Mr. Mosley, his continued hold on the helm of the FIA is a killer for all racign categories that fall under his control. Yes F1 is the main category, but he does effect other series of racing too. (Though none like F1) As much as he has said he will retire, there are high chances that he will run again and continue to be the bane on all fans for his continued stupidity and acting like he knows what he is doing. Lets all hope, that over the coming weeks and months that some decision is made to at least adjust some of the rules being touted for the 2010 season. I for one would love to see some continuity in the rules that are being used in the sport to allow us to just get on with what we are all wanting to see….RACING!

    • F1WolfNo Gravatar says:

      from what I read the idea with the salaries is that the sposnorship deals negotiated by drivers will not count towards the cap.

      I do believe that this all cap thing is just starting shot. FIA and Mosley are flexing their muscles and at the end they will get to some compromise with FOTA – that compromise may be what Mosley has in mind. I mean look the the “standard engines” – he came up with outrageous idea of standard engines, the result is no one is running it but the regular engines are now available to independents for relatively cheap prices …

  10. SebastianNo Gravatar says:

    @F1Wolf I believe this is the problem right now. Too much politics and too little common sense. If you want to be understood by the general public you must make decisions that seem wise and well informed.

    The entire reasoning behind why it is possible to introduce the Budget Crap is flawed. Basically they are saying Deloitte and Touche (the accountants) says it can be done so… Come on! They will be the ones making the money trying to keep a tab on the budget capped teams. Talk about advising in their self interest.

    I strongly believe that the dual rule budget crap is a great threat to everything we enjoy about formula one. And if it is only politics it isn’t much better.

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