How can F1 break the impasse over competitive cost cap desires?

The matter has polarized the teams, with Alpine and Alfa Romeo being the most vocal in an effort to ensure that the $140m title remains unchanged in the 2022 figure, plus an additional $1.2m for the 22nd race. Is. Meanwhile Red Bull, Ferrari and Mercedes are pushing for growth, and their arguments are becoming increasingly frantic as the clock is ticking and they look at where their costs are headed in the form of global inflation.

All teams agreed to a reduction of $175m to current levels in 2020 at the height of the global COVID lockdown, at a time when it was unclear what kind of season we would have, and thus how much income would be in. Just a few years later, we have a full schedule, the venues are back in huge crowds and the sponsors are queuing up to come. The teams are arguably in a healthier position than ever.

Against that backdrop, it’s perhaps not surprising that the big players are frustrated that they can’t direct enough of their money into making their cars go faster while balancing those rising costs. Red Bull boss Christian Horner suggested in Barcelona that many teams would have to miss four races to stay under the cap, although in Monaco he clarified he was trying to give us some perspective on how many are currently Teams are hoping to bust. hat by.

There are clearly some arguments for the allowance for inflation argument. But how important it should be, how it should be implemented and what kind of precedent it will set in terms of going forward in future years, all remain unresolved.

The big picture is the principle of the hat. It should not be forgotten that many teams and their owners have committed to a long-term future in Grand Prix racing, on the grounds that spending will be reined in, and will no longer be a bottomless pit of investment. Instead, F1 will be about efficient spending and making effective use of your resources, potentially giving former midfield teams a chance to take on traditional pioneers.

Renault owners committed to the Alpine project on that basis, while individual owners such as Jean Haas and Sauber/Alfa Romeo’s Finn Rausing could justify staying involved knowing they could compete with the big boys. Huh. Thus it is completely understandable that those teams are now trying to keep a lid on the current cap and are concerned that any change will be followed by further increases.

The two camps have very different perspectives on the effects of inflation and how it should be viewed, with some saying we knew it was coming and others blaming the unexpected conflict in Ukraine.

“Obviously there are some teams that are up against,” Horner says. “And I think there is clearly a need for a certain threshold for the voting process within the in-season changes to the budget cap, which currently is not.

Red Bull boss Horner and Ferrari counterpart Binotto both argue the current situation is force majeure, but Vasseur disagrees

Red Bull boss Horner and Ferrari counterpart Binotto both argue the current situation is force majeure, but Vasseur disagrees

Photo by: Mark Sutton / motorsport images

“But of course, you’ve got to see the bigger picture – is this a force majeure? I would say an act of war that has driven inflation would be classified as a force majeure event.”

Alpha’s Fred Vasseur counters: “It’s not exactly a case of force majeure, because inflation isn’t a case of force majeure. We knew very well in November or October when we did budgets that would contain inflation. And now it’s up to the teams.” Have to decide if they want to develop the car over the entire season and miss four events or if they just want to slow down and do the whole season.

“Honestly, I think at one stage we have to agree on the fact that we’re not going to try to change the rule. It was exactly the same story with the weight, as it was clear, some teams didn’t achieve it. done, they wanted to change the minimum weight, and the number of teams were not able to achieve the target. It’s not a matter of if you have eight cars under weight after qualifying that eight cars will be disqualified.”

Vasseur argues that teams can always rein in development.

“The difference is we’re not talking about the budget cap, we’re talking about the budget, on our side,” he says. “It means I won’t be able to spend what I have. And if we have some growth and I can understand their position, but if we have some increase in energy or freight, the best solution is That the wind tunnel be shut down to prevent updates from being rolled out every single weekend.

“We are in this situation and sooner or later we will have to stop the development of the car, because we will be on the limit of our budget. And I think everyone can do that.”

Alpine boss Otmar Szafner is fiercely defending his team’s position, and like Wasser he says inflation could be seen well ahead of the season.

“Most teams do their budgets for next year in the November, December deadline, and we are no different,” he says. “And at that time, inflation was already over 7%. RPI [retail price index] England had 7.1, 7.2%. We kept this in mind when we did our budget and finished all the development work that we were going to do.

Szafnauer and Vasseur both argue that it would not be appropriate to change what the F1 teams agreed upon when the teams signed the cost limit.

Szafnauer and Vasseur both argue that it would not be appropriate to change what the F1 teams agreed upon when the teams signed the cost limit.

Photo by: FIA Pools

“And we’re still within that, even though freight was a little more expensive than we thought, we’re still under the cap. And we plan to be there at the end of the year. And we adjust growth accordingly.” Will do, as Fred said, so I think it can be done. Where there is a will there is a way and we set a budget limit and we should stick to it.

Szafnauer is adamant that rules must be followed.

“We all sat for a long time trying to get the hat to the right level,” he says. “We discussed inflationary pressures. The cap itself has a mechanism in place to deal with inflationary pressures, and I think we have to stick to the rules that we’ve debated for a long time. The bigger teams had a different view of where the cap should be, smaller teams wanted it at $100m from what I remember.

“And we came to an agreement, including inflation, what do we do with inflation, and the first time we face inflation, it’s a little over two and a half percent, we want to change that. I think That’s wrong. I think we should stick to the rules as they were written and look at it. And I don’t think it’s opportunistic for teams to say, ‘Don’t change the rules in the middle of the season’.

Some changes that do not include the headline budget cap figure are also being discussed. One is to take some or all of the freight cost out of bounds – freeing up amounts that would have been included in the $141.2m for other purposes. With six flyaway races due at the end of the coming year, and teams don’t yet know what it will cost them, it represents a useful savings.

Teams that buy gearboxes and other components from rivals have to declare a notional price for them, exactly how much it would cost them to develop and build them internally. While it doesn’t help big players like Red Bull, Horner suggested that adjusting some of those prices would ease the pressure on teams that buy from outside.

“For smaller teams, the FIA ​​has levers,” he said. “The components that are moved, for example, gearboxes, suspensions, components of older listed parts that carry a substantial tax – a cost cap tax, not a real money tax, but a cost cap tax.

“Maybe that’s something the FIA ​​could look into in a re-evaluation of those, because even the P7 teams in the championship are breaching the budget cap at the moment because of that effective taxation.”

Horner believes the reduction in applicable tariffs will help them when the customer team acquires certain items

Horner believes the reduction in applicable tariffs will help them when the customer team acquires certain items

Photo by: Sam Bloxham / motorsport images

As mentioned, changes like this won’t help the three biggest players as they try to stay under the cap. Really the only solution would be an agreement between all teams on a change in headline numbers, one possibly brokered by F1 CEO Stefano Domenicali and FIA president Mohamed Ben Sulayem. However, it still seems far-fetched as opponents dig their heels.

Ferrari boss Mattia Binotto is clearly disappointed, suggesting those teams are now holding off on change when it was deemed necessary after concessions were made by the big players.

“I would like, again, whatever the situation, the smaller teams, the top teams, to reinforce that this is a sense of responsibility that we have all got down to the rules and to F1,” he says. “As I think we had at that point, 2020, when we were reduced to [from] 175 to 145 [for 2021], It was certainly not in the interest of the top teams to be reduced to 145. It would have been so easy for us to just stop it and keep 175, and today, there would be no discussion.

“I think we made an effort, because we understood the importance of it. We understood the importance of balancing the limits and financial conditions within the teams a little bit more. But I think as we did at the time, now we Experiencing the rules, we know where the limits are, what needs to be improved.

“And I think that as a whole community, all teams should understand this, and be responsible. If a team is only looking at their individual interest, we will never move forward. Admittedly, even in 2020, to freeze regulation when we knew our cars were too bad [and] For the whole season all the criticism was thrown on our shoulders.

“But we did it for a simple sense of responsibility. If someone is not doing this today, when there is such a situation, which is an unforeseen event, which is obvious, that everyone can understand, I will not understand it easily. .

Binotto is not shying away from expressing his displeasure over the current standoff

Binotto is not shying away from expressing his displeasure over the current standoff

Photo by: Carl Bingham / motorsport images

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