A lot has happened since the last blog post. The Bahrain Grand Prix was terrific and completely debunked the politicking that Bernie Ecclestone and Luca Montezemolo were up to before the race. The new formula was not only brilliant technically but it led to a great race.
For whatever reasons, the two grandees were busy talking down the sport and saying that things needed to be changed. Perhaps they were simply testing the water to see if there would be any response from FIA President Jean Todt, who is doing a very decent impression of The Invisible Man at the moment.
When Bernie wants to put out a message he wanders into the Media Centre at a Grand Prix and very quickly he is buried beneath a pile of people. In 15 minutes he has delivered the message and departs. Luca Montezemolo is much the same but he tends to chatter only to the Italian media, allowing his message to filter through the system. Those who miss these events (if they care) look upon it as having been unlucky, or in the wrong place at the right time. Todt, on the other hand, insists on choosing a few friendly journalists and in consequence manages to alienate all those who were not invited. It is a brilliant way to make enemies and such a simple thing not to do. I understand that Jean is not good with the media, but this is why he needs to hire people who know what they are doing, and to tell him how best to get his message across. Hiring the wrong people, or people who only tell their boss what he wants to hear is always going to lead to failure.
Right now the powers-that-be in Formula 1 are on the back foot: Ecclestone has legal actions coming at him like Zulu spears at Rorke’s Drift, Montezemolo has not had any decent results from his F1 team for years and knows that the eyes of the Agnelli Family are on him. Todt could throw his weight around more as a lot of the other teams would support him if they sensed weakness in Ecclestone.
The big teams may say that they don’t want a cost cap but there is no logic in this position. They may be all right, but if there is no-one to race against, their achievements are cheapened. And let’s face it, one of the smaller things that the race in Bahrain showed us is that money is not everything. Force India and Williams were just as good as Ferrari and Red Bull Racing. Think about that for a minute. If the people funding Ferrari and Red Bull stopped and thought about it, they would realise that if the middle-ranking teams can outperform the big guns, then the money being spent on the big teams is wasted investment. It is profit cast upon the ground. And, let’s face it, the big companies are generally run by those who seek efficiency. Force India and Williams are efficient. Ferrari and Red Bull are not. Mercedes has spent so much that it is probably where it should be: a second clear of the rest. But if all the teams agree on a cost cap, then Mercedes would be embarrassed into it as well then everyone would be better off for it because F1 would be about efficiency, not just technically but also commercially.
Ferrari is red-faced right now because it gets the best deal of all the teams from Bernie Ecclestone and still cannot deliver… No wonder Montezemolo is worried.
The bottom line here is very simple. If the teams remain pits into which money is thrown, they will eventually run out of potential owners because there is no real incentive to be a team owner. They might have business plans and big egos, but paying for it all gets boring after a few years. If F1 teams made money there would be a queue of potential owners. America is full of sport billionaires who would line up to grab a team that made some cash. The key to success is to create a situation in which the team owners do not feel that they are being exploited. If they did not feel that way they would be happy. The share of the profits of F1 would no longer be an issue.
Right now, greed rules the roost: Bernie has had his slice of the pie (and a very big slice it was). He has done so much for the sport, but he will forever be remembered as the man who let the asset-strippers of CVC get a foot in the door and exploit the people who make the show. The problem is that CVC’s greed means that the sport is now laden with debt and cannot afford to pay more to the teams. Not for many years at least. And the chances are that they will get out and sell the business to the next generation of asset strippers, who will not do what is needed and put money back in and fix the sport.
The one way to break the cycle is for the FIA to act decisively if Bernie Ecclestone is found guilty on corruption charges in Germany. There has to be some kind of morality clause in the deal between the FIA and the Formula One group and if not there is an Ethics Committee at the FIA to rule on those who have brought the sport into disrepute. If the 100-year deal is declared null and void as a result of indiscretions, the only real loser will be CVC and it has already had enough money out of the sport. They are a company that takes risks and if they lose the F1 deal the risk averse will likely not fight too hard for fear of too much dirty linen, which could affect all the other investments they have… The option is for CVC to sell, but the Formula One company remains the company and if its officers have been up to no good then the deal could still be broken. And that means that buying into the business is a huge risk for any new investor.
So, Jean Todt has the power to turn the sport around without causing anyone too much pain. If he then finds a way of creating a new structure with 15 percent for the promoter and 85 percent for the teams, with all the teams getting the choice of an equal share of the money, without any special deals, all that is then required is a sensible cost cap, written into the rules. If he could do this he would have solved all the problems and then he could then go off and do all the road safety stuff he wants to do without fear. But for all this to happen, two things must occur: Ecclestone must be found guilty and Todt must then pounce and show some steel.
250 thoughts on “The background to Bahrain…”
Oh god…If only
“But for all this to happen, two things must occur: Ecclestone must be found guilty and Todt must then pounce and show some steel”
Fingers crossed on both happening, we all know that with Mr E gone, CVC gone & a cost cap, F1 would be much richer for it… in many more ways than one! There is hope…..
Oh that would be great if it happened.
What a fantastic race and what a great time for it to happen. I’m loving the new noise more and more. You can hear the cars moving around, going over the rumble strips, sliding, bottoming out, tyre squeals, what’s not to like??
I think it’s thoroughly disheartening to have the best GP I have seen in years offset by absolutely no leadership in the sport. I do not know what the hell Bernie thinks he’s doing. It’s just an embarrasment.
New teams? Who do they think they’re kidding? Who is going to make a start in an environment like this?
A fine review of a very interesting time for F1. Bahrain must have been quite the spectacle to see in the flesh, what with all the politics contrasted nicely with one of the best races in years.
I thought your comment about having to embarrass Mercedes into a cost control structure represented an interesting turnabout for the team. Didn’t they came back into the sport as a team owner under the expectation that a cost cap was going to be in place, and subsequently have to spend several years building the team up to compete with Red Bull, McLaren and Ferrari?
With their new power units looking so strong at the moment, and homologation theoretically locking that advantage for some time, a cost cap in the not too distant future might look very tempting to them.
I cannot imagine any possible counterargument… except for those based on lies…
I thought I’d give the FIA the benefit of the doubt and assume they wanted to wait for a decent race before blowing their own horn over the new regulations. Haven’t heard anything of the kind, so now I can officially join you in tearing my hair out in frustration.
The new rules delivered a damn fine motor race in Bahrain, from start to finish, and up and down the field. And all at the same speeds as last season using hybrid technology and a third less fuel!
There — is it really so hard to come with a simple, compelling message like that and communicate it to the world, enthusiast and general audiences alike?
I guess the cracks are wider than floorboards at the Place de la Concorde…
CVC’s involvement has its roots in Kirch Media’s original investment apparently, so why were Kirch Media investing in the first place, was it something to do with Bernies digital TV? Thought he had enough money to fund it himself.
Yes, Kirch went there for the Digital TV – pay TV content patrick. But he failed to make it work and so FOM offered digital TV itself for a few years.
Thanks BasCB, seem to remember Kirch went bankrupt and the banks took over including the shareholding in F1, which eventually ended up with CVC.
It would be common sense if CVC sold their shareholding to a ‘global media and entertainment organisation’ who would take a different approach to the management and growth of Formula One. Any interest from Tokyo…?
It goes back to EM tv who had the rights at one time. Joe wrote this up a few weeks ago, try a search in the blog.
Are the drivers banding together to try (or at least contemplating) and get Pastor Maldonado kicked out of the sport? Because at this rate, he will be responsible for F1’s first driver fatality in a long while with his lunatic antics. Here’s hoping the drivers band together to try and get this moron of the sport
Or you look at it in a different way and say. If it was not for Maldonado causing a safety car this race would have not been half as exciting as people say it was….I think clown drivers are better than double points, DRS, ERS or whatever.
Maldonado has been punished already. Kicking him out would go too far imo. In a good car, he even can show decent driving.
I fully agree with you, MiloJohn.
In the American NFL the teams share the common revenue pot. Every team makes scads of $$$. I assume the heads of the F1 teams are intelligent (or else they wouldn’t have gotten the job). Don’t they see the big picture?
I admit I’m not an expert and I may be missing something, but this is the way I perceive it.
One can hope.
Very well put, Joe. Couldn’t agree more.
Some of the comments being thrown around by the like of LdM, and others, are really just amazing. Whether or not they have a legitimate complaint is really irrelevant. They are damaging the sport by complaining in public. Sports leagues in the U.S. have policies about such things. Players, coaches, managers, owners are not supposed to publicly criticize the leaque, referees, etc., because it tarnishes the product. When they do, they get fined and disciplined.
I’m really tired of Ferrari’s shtick anyway. They always moan about something. They seem to feel it’s their god-given right to be at the front and if they’re not, they’ll blame everyone and everything. Boo hoo. Mercedes did a better job. Tough. Get to work and beat them. Quit whining.
Williams and FI are not more efficient than Ferrari and RB; they are powered by the best engine package, Mercedes. This year it’s pretty obvious which team came up with the best response to the new regs.
The results are the results. And the accountants don’t care.
They certainly are more efficient than McLaren since they are getting at least as good results with the same engine package and much lower budgets.
Todt will never act, He loves the title but is unlikely to ever be the real player in this role, He would never face Ferrari and say you would be in for the same share as Caterham.
Exactly. How could he possibly, he is MASSIVELY biased in that respect.
The ‘exciting’ end to the race in Bahrain was only a consequence of the safety car coming out (due to Maldonado being an idiot). If there was no safety car, there would have been no exciting battle between Ham & Ros…and the race would have had a processional and predictable ending.
Most of the other battles between drivers further down the pecking order would not have occurred either due to field-spread if it wasn’t for the safety car.
There were some excellent performances by a couple of individuals before the safety car came out and the general on-track action was good with the Merc-engined teams bullying all the other non-Merc engined teams – but all the drama and excitement of the battle between Ham & Ros that’s being talked about in the press only happened because of the safety car coming in to play…and hence we can’t always rely on Maldonado to be a complete numpty and crash into someone needlessly in the closing laps of every race….(oh shit!…I stand corrected – Maldonado is a complete numpty and probably CAN be relied upon to bring out a safety car in the last ten laps or so of every race!)
Good points well made Shane. Something about it was bothering me about all the observations in the press, it was all a bit too “if it looks too good to be true, it probably is”, and you’ve just nailed it.
Don’t agree, great racing the whole way The safety car was just a bonus. Sounds like you are grasping at a way to support your position on the new formula.
I think my comments were fair. I never criticised the race…just merely pointed out an inconvenient truth that many in the press would like to ignore.
You would disagree 🙂
Because your supposition is wrong. If you had paid attention to the race you would have known without the safety car Rosberg and Hamilton were scheduled to clash at the next round of pit stops. Their strategies were on a collision course for the end of the race and thus the fight would have happened anyway. Maybe not exactly the same way but it would have happened.
Exactly. It blew the Williams last charge too. Might have even been more of a nail biter without the safety car.
Don’t know what race you were watching but it was great throughout and well before the safety car. I was a little worried maybe the first 10 laps but things got interesting very quickly after that.
It was an excellent race throughout. I watched it twice. Some great team mate battles too!
The problem lies in the statement not being true. The “press” is a pretty broad term anymore. The Mercedes both had a tire change left before the safety car. Maybe Rosberg would have caught him on the option in clean air. Maybe the Williams on fresh rubber would have hunted down the Force India. We never get to know what might have been only what was. It was a great race, start to finish.
There is no problem….the truth depends upon one’s perspective. Maybe this…Maybe that…Maybe if my uncle had boobs he’d be my aunty.
The race was good before the safety car….the end of the race with Ham & Ros was great – but it only happened *because* of the safety car…and because of Lewis’s natural racing instincts as an old-school, outright wheel-to-wheel racer.
Opinion is drawn from perspective but truth is truth.
We still had a tire change to go. Rosberg would have caught Hamilton after the last pit stop regardless of the safety car. The gap Hamilton had was due to the differences in strategy.
I agree with most of what Joe said. However what to do with CVC et al, is a difficult one, unless the teams just shut down their involvement in F1 and rebooted in a differing series created by them, with new rules. If they had the guts and foresight to do that, they would do all of us a great favour. Being F1 people, some might murmur about it from the sidelines, but I can’t see them all agreeing. Hell, I don’t think a room full of them could agree on what the time was, let alone something fundamental like a properly run new F1!
If they did do this, then I would say that a cost cap would not be as good an idea as just having a very small rules book, with sensible rules, I’d vote for Gordon Murray, or someone of his ilk to write it. Then implement the rules with commonsense, and do the same with rules on driving, so some of the stupid penalties get dropped. BTW, while doing this, find a good rule to get Maldonado shipped back home before he seriously hurts someone!
As to Bahrain, it was a good race, but being realistic, if Mad-donaldo hadn’t brought out the safety car, LH would have coasted through the corners to a 8-9 sec win. And the gap back would still have been 20 odd secs to Perez. So, I’m not sure how this year is much different to the past RB domination, as all that has changed is that the teams have been shuffled around, which makes a bit of a different scene I guess, but does not show that the new rules have reinvigorated F1….as pointed out, FI & Williams are mostly there because of Merc engines, the RBR cars are probably still the quickest chassis, but the Renault is a bit duff as an engine, the Ferrari chassis & engine is also duff, and the Marussias & Caterhams are…guess where? Back of the field. The whole thing is a bit Emporer’s New Clothes to me. What I would have liked to see would have been the whole field around 2-3 secs apart in Qualy, and Williams, FI , Sauber etc, being able to challenge for the lead lap by lap. That isn’t happening and won’t, not this year anyway, so apart from a graphic showing one driver has a less heavy right foot than another, the series has not taken a huge leap forward, it is still being dominated by one team, and now it is also impossible for anyone to win, without a particular engine, which is also something that is not new, so plus ca change etc, as Jean Todt might say…if he was at all interested!
I disagree as well, Hamilton said he needed 11 seconds and more to be safe, he had 9.5, so Rosberg would probably of caught him, true we wouldn’t of had 10 laps of fighting, but we would of had 10 laps of Hamilton being chased and then some fighting for an overtake.
But fate interfered with that so we had an even better end to the race.
Perez wouldn’t have got closer than the 20+ secs he finished at, which given the budget differences between Merc & FI is a good show for FI. But my view is that it would still be better if the teams had more engine choice, less tech costs, and could compete closer. At present this year will be like last year, only much more expensive for the teams, which could well lead to fewer teams by the end of the year.
either you didn’t read the article before you posted, or you didn’t understand it. What you said was derivative and negative, but you did get first post, yay.
As I have often explained I get the comments in order of being written I do not know to what they refer, so I have no idea to what you are teferring
I did read the article before I posted…and I disagreed with Joe’s first paragraph – hence why I posted my 2-pence worth. I would have enjoyed the race even without the safety car, however I still think there are fundamental problems with this new eco-friendly, fuel-efficient Formula-1 that will manifest themselves as the season goes on.
It’s called an ‘opinion’…wether it’s negative or derivative is irrelevant
I don’t understand what you mean?
What I was trying to get at was: I thought Joe’s piece was an interesting view on how F1 should organise itself for the long term good of the sport and what others might think of it. @Shane’s opinion was going back to the good race / bad race debate which I thought was sufficiently covered in previous blogs, and might have been rushed out to get on top of the comment list.
Then @Joe seemed to think I was addressing him, @Shane’s comment no longer appears as the first comment (!?) and @Shane is offended that I might not appreciate his opinion. Confusion and cross-purposes all round, my work here is done 😛
I enjoyed the race, like the new rules, am in awe of RBRs ability to generate downforce, pleased LH and NR have a front running car and wish F1 was more affordable for teams and fans. I’m looking forward to the FIA court case and the next race. In preparation I’m reading up on the 4th order low pass Butterworth.
neilmurg, I’m not interested in being the first to post on Joe’s blog…I just chuck my 2-pence worth in during my coffee breaks at work…I guess I drink a lot of coffee LOL. Some confusion and cross-purposes as you’ve stated.
Exactly. The folks proclaiming this to be a “fabulous” race seem to overlook the fact that the Mercs finished 23 seconds ahead of the third place car, and this after the safety car left only ten laps of racing at the end. Imagine the gaps between the cars without the safety car…
And of course there was toe to toe racing between teammates, what else would you expect in only ten laps? Is this what people want, a Nascar style finish where you know damn well the yellow is going to come out towards the end to make for an artificially “exciting” finish? Is this what it’s come down to these days?
If you can’t appreciate a good race, you’re in a very sad place.
The race report I read by a colleague of your from times past, indicted that the Mercs race lap time advantage over everyone else was circa 2.4secs per lap. That doesn’t look like much different to the last 4 years when Vettel & Webber got alone in a race. However, even during the last 4 years and also in 2009 when RBR had the fastest car for more than half the year, it was still possible for Mac &,Ferrari to challenge for wins, ( and Brawn of course ), but now in the new formula it is only possible for Hammy & Rosberg to win. How does this make for a fantastic formula? Mac, Williams, Force India, Ferrari, Sauber Toro Rosso & RBR have no chances at all, unless both Mercs DNF.Unless it is possible for a plethora of makes to have the chance of winning, then whatever the rules, this is not Nirvana by any means. I hope that will alter for next year, but in between then and now…..Zzzzzzzz!
It is sad that you cannot see beyond this
Thing is Joe, it’s just replacing one domination with another. The only difference being that fans disagree about the shape/noise/propulsion of the cars, and the engineering costs have hugely increased, as well as all the increased complexities of the cars + rules. I don’t see it as an improvement.
I thought the race was just as exciting, and intriguing, before Pastor weaved his magic into the mix. Lewis and Nico were set for an interesting strategy battle in their final stops without the safety car, that may well have resulted in them fighting it out in the closing laps regardless. And there was plenty of other interesting action down the field, both before and after the safety car!
Maldonado amazes me tho, no apology, no contrition, just a very weak attempt to apportion some of the blame to Guitierrez for being off line!?!
The only magic I ever saw in Pastor was Barcelona 2012. He drove like Alain Prost and that driver has never been seen since. Odd
Can you confirm the location of Alain Prost on that sunny day in Spain? For that matter, can anyone confirm the true location of Pastor Maldonado on that afternoon?
It should be pretty obvious who drove the car and it who set the garages on fire
Some day, years from now, the full truth will come out about Barcelona 2012. Maybe Joe knows. Maybe Joe has some unpublishable theories. A great Williams victory on Frank’s birthday would make any F1 fan happy. But that and Singapore 2008 stood out as very odd results.
My only theory is that Prost was driving the car… [Joke]
Well, there can’t be much of magic in Lotus at time, but Pastor’s race was unfolding pretty interesting until this pit exit. More shame, then.
Its really quite something with Maldonado, isn’t it Joe. He was just fabulous that weekend, but since then, we have barely seen a glimmer of it shining through anywhere, instead he showed a bit of the ruthless streak as well as lack of awareness or care of what others around him are doing.
Maybe he should go to Specsavers? I’m not joking, he seems to have little spatial awareness, and it might just be that his eyesight isn’t as good as he thinks it is.
First of all, the whole race was exciting, starting with Felipe charging up the center. It was followed by a killer battle by the two Mercedes.
Then my friend, an accident happened, which is part of racing. To say, “The only reason…” Thats like saying, “If it hadn’t rained…” Or, “If he didn’t get a flat…” This is racing, and whatever brought this on, it was an amazing race.
It was an epic race and there were epic battles throughout the entire race.
And lucky for us, we did get to see some amazing and unusual wheel to wheel racing.
Sorry but you’re wrong. The different strategies would have come into play and still made it very close at the end. Can’t believe people still have glass half full attitudes after that race.
You both may disagree with Shane, which is your prerogative. If the spectacle of Bahrain proves typical of the way the rest of this season’s GP’s are fought, then fair enough. Shane and I will eat humble pie. I suspect however, that it will not be the case, and the word “boring” (or similar) may appear in the press before we’re through.
Boring is a word that reflects on two things: the activity Nd the author.
Rosberg had a tyre advantage over Hamilton prior to the safety car which would have seen him close in and very possibly get past due to better rubber. The safety car allowed Hamilton to pit equalizing tyre performance but closed the gap on track – great duel but Nico actually hads a better shot at passing without the safety car.
I don’t think so. They both pitted (and needed and intended to), the only thing that the safety car changed was that LH lost his 9 second lead, so advantage Rosberg
Andrew, your analysis is wrong…Hamilton would have won easily….he already had a 9.5 seconds lead over Ros before the safety car and was extending it every lap before the safety car.
The target ‘gap time’ for Ham’s strategy on pitstops to work was only 10 seconds….Hamilton’s crew worked out that they needed 10 seconds in hand to be sure of holding Rosberg behind in the final stint.
Both drivers had one more pitstop to make…Ham on the slower medium tyre and Ros on the faster soft tyre….but no way Ros would have caught and battled with Ham if it wasn’t for the safety car killing Ham’s 9.5 second gap.
Ham would have won easily….
I agree. The safety car gave interest to that last quarter of the GP.
After 1 very average GP in Australia and 1 frankly dull race in Malaysia we get an exciting race in Bahrain.
I’m not going to throw LDMs words back in his face, because 1 safety assisted swallow doesn’t make a summer.
As I said before, if you the races were dull you weren’t watching closely enough.
And what is that about two new teams Mr. BE told us? We do not know anything from FIA. What is that story? Did you have any infos?
when Bernie makes these announcements it’s ‘2 possible teams’, same thing happens with tracks, many are talked about, few arrive, fewer succeed.
Will they get a team together, can they come up with the money, design a car, build a car etc etc. Remember the last time there was an american team coming, it sounded like it was going great, but it never arrived
Wow. Bold strategy Joe. It makes a huge amount of sense but saying it feels like muttering in a dark room about revolution. L
I suspect that the people you are dealing with in CVC and the big teams are not the kind of chaps who will sit still for a revolution of the racers. Also like senators assuming that if they kill the mad emperor the republic will be magically restored. After a period of despotism the state comes to “need” an all powerful figure, and a substitute appears.
Shame as I would *love* to see a republic of racers restored rather than the current imperium.
The observation that those who currently hold the reins won’t sit still for a revolution doesn’t mean much.
We might construct a long list of power structures that were replaced. Can you name an imperium that gave up its selfish control because someone asked them nicely if they would please agree to it?
> We might construct a long list of power structures that were replaced. Can
> you name an imperium that gave up its selfish control because someone
> asked them nicely if they would please agree to it?
Since you ask: the Communist Party of Lithuania, in 1990.
Well, OK, then… let’s put them in charge of F1 and go on from there 😉
Joe, the last part of this makes huge sense as a business plan.
I think the only flaw is the lawsuit that CVC would launch challenging the authority of the FIA to cancel the contract for one man, who they can argue is now gone…… Yes I get he is still there and still poisoning the well. But with big profits come big lawyers to fight any attempt to cut of the gravy train. Love to see this happen. Not sure it will.
I also think that Luca left in such a hurry, before the end of the race, because he was shamed by the way the race turned out and was going to have to admit his opinions are not worth a damn if he was there at the flag.
The question I have about all this is whether or not these players (todt, etc…) actually see these solutions as being viable at all. Does todt think a cap is right for F1? Does Williams?
Sent from my iPhone
Time to point out to LdM that his opinions are sometimes slightly dotty by reminding him of three car teams, and likely resulting effect upon the Scuderia’s points tally.
Not being a legal expert I’d steer clear of making a definitive forecast on the trial but whatever happens Bernie is on his way out…. Trouble is I just don’t see Todt as the man to re-organise the playing field. Fair, reasonable and democratic were not exactly the watchwords for his re-election process….
I did not
Sorry you I said “I’d steer clear” as in me not “You’d steer clear” as in you….
Hope JT reeds your blog Joe, the best thing that could happen to the sport is for the FIA to regain control of the commercial rights or for the teams to buy the rights themselves.
Not holding my breath though.
What an incurable optimist you are, Joe! Your proposed solutions would likely work … IF there were not so many powerful people involved with turf to protect.
On a lighter note, the Bahrain GP was wonderful. Absolutely the best GP in a long, long time.
Being an eternal optimist myself I kind of hope this is how it all plays out, I also keep hoping that the reason there is no visible succession plan for Bernie is because CVC realise that there is no point installing a new captain on a ship that sunk.
The likelihood of Todt showing anything remotely resembling steel seems vanishingly small. What a pity David Ward was not now in charge. Like so many Frenchmen who get into positions of power, the perpetuation and growth of their organisation seems to become an end in itself rather than the original purpose it was formed to achieve. Bureaucracy is after all, a French word.
Joe, I imagine you must feel like the one sane man shouting in a lunatic asylum.
Shame it won’t happen. It makes way too much sense for F1 – at least that’s the phrase you read in every comment section on every F1blog.
It would be nice, though.
Joe, good article and agree with you up until the last paragraph.
What would F1 be with 12 teams like Marrusia (no disrespect to Marrusia)? Who would watch it? I am referring here to the name and who the team is and not their performance. Ferrari, McLaren and Williams are some of the teams which carried this sport to where it is now. How can you say all teams should get an equal share of the money?
There must be an incentive for old and dedicated teams which invested heavily into the sport. You could end up with all sorts of teams joining the sport and leaving after 2-3 years.
There are any number of sports where all teams have an equal voice in choosing how the money is distributed… the point is not that winners can’t be paid something more than losers… the point is that last year’s losers have a chance to become next year’s winners.
This is the crux of why one must deny special treatment to those teams whose brands are illustrious… unless, of course, your goal is to have a museum rather than fair competition. If you want to see a greater number of teams who are able to take winning quite seriously, you can’t afford heriditary brand-priviledge.
However, I do agree that there must be some process that prevents aspiration-free hangers-on from milking the sport for their arbitrary piece of the pie. For example, if you have a full field with no room for expansion, and here comes a serious entrant knocking on the door, eager to enter with committment, then a perennial loser who’s accomplished little must be shown the door to make room. But of all the problems F1 faces, getting rid of perennial losers rates low on the difficulty list.
I completely agree with you but here is a potential solution for the mechanism to stop ‘aspiration-free hangers-on’ although I’m not sure how workable it would be in practice – gp2 could be the actual feeder series to f1 where you have a promotion and relegation aspect similar to football with a large financial incentive to be in the ‘premiership’. This would boost interest in gp2 and keep the team’s at the bottom honest. Unfortunately I see too many problems with my idea but in theory it could be workable
15% for the series promoter and 85% for the teams still leaves race promoters in a pickle, unless more of them are offered a realistic price for hosting events.
I appreciate your oft stated argument that governments will stump up race fees because F1 offers Olympic level publicity at a fraction of the cost. I’ll argue that F1 will lose its publicity value if it races less in Europe, leading to a reduction in European TV viewers. The F1 brand proposition is that races are watched across the industrially developed world — hence efforts to relaunch F1 in the USA — and it is dependent on retaining “classic” races such as those in UK, Canada, Belgium etc which have been treated as dispensable. Promoters of the new races (some of which have been around for a while) seek association with the classics, not a bunch of arrivistes.
I don’t know enough to know what the proportions should be, but I certainly agree that the promoters must be able to make a buck too.
While I agree that fewer races in Europe would be a bad idea, if F1 aims to be truly global (rather than an English racing series that takes the Grand Tour each summer), it’s a good thing that races are distributed all over creation.
The problem is that the criteria about choosing particular sites beyond the industrialized world appears to be based on only one factor (Bernie’s fee) when proper decisions made by responsible management of the sport will involve a great deal more consideration than just that. Bernie’s glutonous pirate act has outlived it’s usefulness. Like more than a few people who are extremely successful in big business, he borders on the sociopathic (this is not a used as an epithet, but as a perfectly apt descriptor of what the term means once you get past the “antisocial” bumper sticker definition.)
Todt, for someone who appeared to run Ferrari with a rod of iron, he now appears to have lost not only his rod of iron but his backbone to boot.
That has been puzzling me for quite a while. Was there a puppet master at Ferrari, and now there’s not? Did getting married remove the fire? Is the FIA so mired in internal politics that JT cannot do a thing?
Thanks for this clarification, Joe. But you said it, the big IF. If Ecclestone is found guilty.
He wouldn’t be Bernie if he couldn’t find a way to wriggle his way out of it!
Bernie’s skill in all these years has been to avoid coming up against an immovable, immutable entity. Most of his adversaries over the years have basically behaved like sheep, and have either been sheered or slaughtered accordingly.
Unfortunately the supposedly unstoppable force has now come up against an immovable object in the German legal system. It’s a whole new world, and one where even Bernie may not Bernie.
Do you think Joe that Todt is really not capable of “pouncing” as you put it – or could he just be playing a very long waiting game of chess?
Cost caps in Formula One are, as ever, a fairy tail. An enticing but naive dream. Fine for football, but impossible when development can be outsourced to companies a world away.
The teams were sensible enough to realize the controls would be unenforceable, and had the good sense to object.
The caps would have been an “honor system”, with the multi-national owner’s books completely unchecked. Unenforceable cost caps would be no different than removing post-race scrutineering. Winners would be suspected as cheats, soon pressuring losers to cheat themselves.
It would be hard to find anyone calling for an end to F1’s post-race scrutineering. Yet there seem to be many in the sport who believe unverified cost caps could work. One supposes the dream of greater competition has outweighed their sound judgement
One of the oldest rules in motor racing applies here. It says “that which is not verified, is open”. Cost caps in a sport like Formula One would have been completely open.
A costs cap is absolutely workable It’s money, it traceable..
A cost cap is not workable…you are naive to think it is and show’s you don’t understand the reality of finance in business or the competitive nature of F1.
Are you a forensic accountant? A forensic accountant told me this would be easy
Joe..how about the cost cap for 2015 they just agreed to eliminate? (They are: Mercedes, Ferrari, Red Bull, Williams, McLaren, Lotus + Bernie)…What’s going to happen to the small teams and to F1?
If I were a small team right now, as I said, I would organise a budget cap among the smaller teams, Williams and Lotus would be smart to be included in this and I would make a big announcement about it. I would then make sure that people realised the budget that Force India, Williams, Sauber, etc have compared to the big teams and I would point out in as unsubtle a fashion as possible that the big teams waste gazillions. If this was well done, shareholders would start asking questions and (Ferrari) Fiat, Mercedes and McLaren might come under some pressure to join the budget cap. The more who join the stronger it becomes. In the end Todt would accept it and put it in the rules.
Organising the smaller teams to agree a budget cap is about as realistic as herding cats or nailing jelly to the wall…
Not if it is in their interest to do it…
That sounds like a terrific idea…Is there someone that they are able to hear ringing this bell? Are you trying to propagate sound in a vacuum space? There’s no worse deaf man than the man who doesn’t want to listen.
A forensic accountant would have to say that … otherwise what would be the point of employing him?
Or her… let’s try not be sexist
Your forensic account may not realize the byzantine ownership structure common to many of the teams.
It should be easy to check the team’s books, but it would be impossible to check the books of the team’s multi-national owners. For starters, the FIA would never see those books. You can’t check what you can’t see.
Even were they given financials of the team’s parent companies, subsidiaries, holding companies, and shell companies, it would be a monumental task. Those accounts are so massive, disjointed, and world spanning that it would take a team of forensic accounts, years, to check each and every conglomerate.
Frankly, one cannot imagine a FIAT, Red Bull Drinks, or Mercedes ever allowing the FIA to delve though their entire corporate financials.
I’ve yet to see a forensic accountant or anyone else in the sport explain how cost controls could be effectively verified in the level above the teams. The typical rejoined is that it would be an “honor system”.
Why an honor systems would be more effective in the financial part of the sport than the technical part of the sport is never explained. If an honor system would never be trusted to replace post race scrutineering, why trust an honor system to enforce cost controls?
Or they might
If you send me $600.00 I can get you a written overview of how a forensic accountant would police the teams. I have been assured by one, “any business can be policed”.
No, I’m not a forensic accountant – but I am a senior budget holder (cost centre manager) in a major company and hence I have a grasp of financial controls and financial management.
The fundamental problem is that major companies such as RedBull, Mercedes and Ferrari all have other business operations outside of F1…and hence this is where all the ‘financial cheating’ would occur.
Such F1 teams in theory could hide a proportion of their true F1 expenditure to these other business operations of theirs. For example, RedBull F1 could use it’s fizzy drinks operation to hide it’s F1 expenditure…Ferrari could use it’s parent company FIAT to hide much of it’s F1 costs also.
A simple scenario could be as follows: Ferrari want a new full-scale wind tunnel for their F1 team…but it costs £80 million to purchase and become operational….so instead of Ferrari F1 purchasing this new wind tunnel and eating into their cost-cap budget, FIAT purchase one instead under a FIAT budget and justify it for their own road production cars….but Ferrari F1 use this new wind tunnel 24hr/7 days a week.
The human element of policing the cost cap rules would also be problematic. The human “interpretation of the cost cap rules” would also cause a huge headache as you’ll have some teams operating within the ‘spirit of the rules’ and others operating to the actual letter or the rules…hence, F1 would get bogged down in arguments and allegations that are even more dull, boring and complex than the recent fuel-flow metre arguments.
I have no idea what a senior budget holder (cost centre manager) does. However I do know what forensic accountants do. And there is no way they could hide things as you are suggesting.
You are wrong…plain and simple.
Shane there is nothing simple about dealing with you. I assume your not a accountant or you likely would have told us. I don’t know what a “cost centre manager” is but it doesn’t sound like it requires the expertise of a forensic account. I have spoken ,at length, with a forensic accountant, regarding a spending cap on F1 teams. She assures me that it could be done were the parties willing.
The next time you talk to you forensic accountant, ask how they would verify illicit or under reported spending by the team’s multi-national parent companies?
Maybe there’s some process of which we’re all unaware.
We’ve been discussing this issue for months. The budget cap proponents have (to my knowledge) never detailed a solution to this problem.
By now, I can only imagine this is because no such solution exists. Why else would paddock minnows like Williams and Lotus vote against the cap? The reason they gave was the same as mine. They admitted a budget cap would be unenforceable.
Ever heard of Enron, and Arthur Anderson? AA rigged the books for Enron, and they passed audit every year until it was all finally exposed as the proverbial crock and Enron collapsed, followed by AA. Coincidentally I was involved around that time, with a company who also used AA for accounting & audit, and who also ran a duff business that sucked in money and looked great on the outside, until it was bought by a USA company, who found it was rotten to the core….
Why have complex accountancy to rule F1, why not just have simple rules for the building of the machines which will automatically reduce the costs? For example, remove the hardwood planks and ballast. The planks are, if I remember correctly, very expensive but serve no useful purpose except to ensure that the car does not ground. Ballast could be removed by upping the weight limit of the chassis. Complex wings could go, and a simple single plane front wing, tyres could be made to last 200 miles, all sorts of things could be done to reduce costs. Next year’s ban on tyre warmers is one that will save costs all round. It doesn’t need highly expensive accountants to solve the issue, just sensible rules for the series will have the same effect and throw out a lot of the current waste.
There are no hardwood planks in F1 teams, and you do not remember correctly, [plank reference self-censored]. Remove ballast by upping the weight limit? The tyre warmer ban is unlikely to happen.
I can’t see why you think that you can come up with a new F1 structure on the back of a micro SD card that has any chance of working, versus a race series which has evolved over over 60 years. I also wonder why I have even bothered to write the previous sentence, or the 9 others already carefully crafted then rejected.
Well you don’t get to see much of a car these days as everything is hidden away so no one can steal ideas. Sad really. Anyhow, last time I did see under one in a picture, must be 3-4 years ago, I’m sure the plank was still there, and I haven’t seen anything to say they’d gone. As to ballast, yeah ,if there is say 50kgs of ballast now, why not just raise the car weight by 75kgs, take the ballast off and give the bigger driver a better chance of equality. Tyre warmers are supposed to be gone for next year and I think I saw Pirelli had done some testing on this subject recently. Yeah, I don’t get your reference to SD cards either. One can make anything in life as complicated as one wants to. F1 doesn’t need to be complex. Changes have more or less doubled the time for repairs to take place, time=money, so how does the new change become more acceptable and cost effective? It doesn’t, it just makes for higher costs when teams are struggling with money issues and that does not make sense.
The plank isn’t hardwood. Its job is to reduce the amount of downforce generated by the underbody (smaller diffuser, less airflow). If you raise the weight, you’ve added more ballast. Hembury said it was going to be difficult (impossible?) to remove the tyre warmers and keep the cars safe. The SD card was more politically correct than the back of a fag packet, and is smaller (fewer rules see?). I think the complexity in F1 has arisen because the engineers are so clever that you have to limit their freedom for cost reasons, so teams can’t just outspend each other and to keep the cars similar enough to be equally competitive. The high cost of engines is partly because they had to be developed from scratch, that will be attenuated over their 5+ years of use.
Basically I was saying I disagree, but was trying to have a bit of fun with it at the same time as creeping towards the right hand margin
Haven’t got a problem with disagreement. As I remember though, the plank was made from some particular hardwood which was expensive & rare, or that was the case when they were first used. The rules issue isn’t something new, back in the day there were sliding skirts & the fan car for examples, but the rule book was smaller and Chapman & Murray amongst others, still managed to find new ideas but not at the sort of cost there is these days. I could have mentioned Wind Tunnels, these are vastly expensive and do not contribute to the show as far as I’m concerned.And the engines are, to my mind, just absurdly expensive , complex and not warranted. There isn’t any imperative for F1 to be relevant to road cars. If that is what is wanted then why not have treaded low profile tyres, bumpers, windscreens etc etc. F1 is going up the wrong path here and it’s an expensive one that could well see most of the field go bankrupt.
I think your comment shows you don’t understand the reality of accounting, forensic accounting or the penalty system involved if found to be cheating nature of f1
I think I understand the reality of accounting…see my last comments from 3:42pm
Shane, as someone who is a qualified accountant and is a finance manager in a huge multinational company let me explain how you only see a small part of the finance world in your business. You see the management accounts attributed to you cost centre. Yes you may see cross over between departments but imagine if there was an auditor/ auditors present in the business constantly checking and reviewing all the time scrutinising all items in the balance sheet and any large items of expenditure. This is the crux. Whilst you may see errors between departments the whole company will report fine and the auditors will happily sign off the accounts. However if there was another set of auditors specially trained in the F1 world searching through the finance departments at Brackley, Stuttgart etc etc they would not be able to hide huge capital expenditure items or excess cost because it would be found!
Finally if you don’t believe me ask your finance colleagues how they would feel having specially trained auditors snooping around constantly. I’m sure they would say that in the end nothing could be hidden.
Your scheme isn’t based in reality. The FIA controls that were was just denied? They would *not* have given access to the books of the parent companies.
Any F1 cost control scheme falls to bits the moment the parent companies refuse to give the FIA access.
Mercedes, FIAT, and Red Bull Drinks would refuse to give FIA auditors the run of their entire empires. They would go to the wall over this. They would leave the sport.
That’s before we even get into the incredibly expensive and massive manpower necessary to scour the books of massive multi-nationals like FIAT, Mercedes, and Red Bull. Even if they gave access, which they wouldn’t, the FIA couldn’t afford the audit staff.
It’s easy to see the allure of cost controls, but enforceable regulations can’t be made by ignoring evidence of their un-enforceability.
Face the truth. Audits of the parent companies will never happen. Without that, cost controls are less than worthless. Winners would be assumed cheaters, and losers would be enticed to cheat.
Thanks for your reply. I understand what you are saying but have a couple of further points/questions.
How do you know that they won’t give access to all parent companies if required? I agree with you that without this access a cost cap would be unworkable. What I can’t imagine is that the FIA thinks they could do a cost cap without access to these. I’m not suggesting unlimited access but at times where things need to be investigated Mercedes, Ferrari (Fiat) Red Bull or whoever would have to open up their accounts/offices if required. For the exact reasons you state in your responses below.
Secondly, I don’t believe the cost would be that much. Realistically you would only need a few small teams of admittedly expensive staff. But the savings a cost cap would bring to the sport would mean surely the cost could be afforded. Whether it is paid by the FIA or the teams I believe this is a small issue in the grand scheme.
It’s nearly impossible to envisage Fiat ever allowing the FIA to scour their books.
The reason is power. Former FIA head Max Mosley set a terrible precedent. He would use whatever ammunition he had to get his way. Corporate wide audits would give the FIA tremendous power over all they were auditing.
No massive multi-national has perfect books. A detailed forensic audit will always find issues. Were those issues passed along to the proper authorities, it could make a real mess for the investigated company. The threat of such could give the auditing body immense power.
Ferrari’s leadership has frequently been at odds with the current and previous FIA leaders. Any head of Fiat would be somewhat barmy to give any FIA leader such a opening. Even were the audits performed by an outside consultancy, the FIA men would need to get involved regularly to decipher technical matters.
As for costs, scouring just the books of the racing divisions (the teams) would not be incredibly expensive. It’s auditing the entire corporate umbrella that would require massive resources.
As you suggest, it would be less arduous if they only followed up specific leads within the umbrella companies, but it seems quite unlikely the FIA auditors would ever be given such leave. Even if they were, such targeted checks would be unlikely to work.
Illicit development could be hidden in the marketing budget of any sub-company, in any nation. The work could then be done by a sub-contractor on the other side of the world. Red Bull Drinks Argentina could pay a carbon fiber design firm in Seattle to do the work. Unless the auditors looked into that specific subsidary, they’d never find the illicit spend.
The FIA cost controls that were just rejected? The auditors wouldn’t have had access to the books of Ferrari’s road car division, let alone Fiat’s.
Crazy right? A completely unworkable and unenforceable scheme? It’s difficult to see how anyone not see the huge problems presented, yet many believe those fatally flawed cost controls should have gone forward anyway.
I’m all for cost controls if the problems can be addressed. Those problems are so incredibly vexing, they seem almost impossible to solve without relying on an unverified “honor system”. We wouldn’t trust an honor system for post race checks, so why trust it for the entire backbone of the sport?
That is fine. Fiat does not have to be in F1. If it is the rules, it is the rules.
We both agree that for this to work then full access to all companies would have to be given. I really though think this would be possible as long as the cost cap was setup correctly and it was clear how the whole thing was going to be worked.
I think your point is valid, there would always be the risk that work would be hidden away somewhere. However, the reality is that this work I don’t feel adds significant value and as an auditor some of this work would possibly not be seen as material. If a company is that desperate to cheat then do that but run the risk of being found out and let me assure you over a matter of years auditors (on the basis of my above statement) would find things.
Lets consider the cost cap further. What is the main significant cost that teams incur? People. I don’t know this for a fact but I would imagine the amount of people employed by the teams pretty much goes inline with where they finished last year in the constructors. This is where the true impact of the cost cap would be felt. If you don’t believe me what was the first and most significant thing Brawn did to keep Brawn alive – cut manpower. What is Enstone doing at the moment – cutting people. This I believe is what Ferrari and Red Bull are scared of with a cost cap. They are worried that a €100m cost cap would mean they would have to downsize their workforce.
Secondly capital investments. A cost cap would mean that they would have to spend wisely and these sort of items are not the sort of items that can be hidden in a factory through a subsidiary. This I believe is another major issue as the big teams would again have to invest wisely.
As a conclusion I would concede that there are risks but I believe the benefits of a cost cap (whilst not necessarily perfect) are actually better than the alternative which is carry on with no change.
I’m from a family of accountants. My sister is actually one of the planets foremost forensic accounts. I assure you I understand finance. The “competitive nature of F1” makes no difference in policing spending. Spending caps are relatively easy to implement and police.
The money is not traceable.
Not when the FIA have neither the permission or ability to check the monumentally complex financials of the team’s multi-national parent companies.
I disagree everything is traceable
I get the appeal. I fully agree that verifiable cost controls would greatly help the sport. The key word being “verifiable”. I equally believe that unverifiable regulations are the road to hell. They create unresolvable conflict and continual accusations of cheating.
There’s an adage that says “extraordinary claims require extraordinary proof”. Saying “everything is traceable” qualifies as an extraordinary claim, and requires extraordinary proof.
Simple. include an FIA fincae code on everything that is used by a team. this could be included as a code against wind tunnel time or meta data for a cad drawing, to a code on everybody’s pay slip, to a finance code on all orders and invoices and random unanounced stock checks in the factory to ensure that everything has a code attached, and even a code inscribed into carbon fibre for car parts.
If an emplyees payslip doesn’t have the FIA finance code, then it’s not part of the cost cap and the employee can claim the million dollar whistleblower prize that Bernie has offered. This can include employees in parent companies, or outside contractors etc, as any work that they produce will have to come into the team with the meta data attached.
Put a requirement on any team to include their parent company and any suppliers and consultants to submit to random audits. If a consultant or supplier doesn’t want to submit to the audits, then they can simply be refused the contract with the team.
To stop false FIA codes being put on employees payslips, simply allow anonamous checking by the employees with the FIA, and any that don’t match up can claim the whistleblower prize, and those that do can be ignored.
I used to work for a very large international Civil Engineering Consultancy, and i had to enter in a job code for any time spent on autocad, so it’s not as this process is not already common.
Such a scheme would not reveal many forms of illicit outside development.
The parent companies could undertake expensive CFD testing, development of many iterations of components, and rigorous failure testing without violating these standards.
Only the final products would be delivered and charged to the team, at costs greatly less than the actual costs undertaken.
They don’t have to check the parent company, just the teams.
If the FIA can’t check the books of the parent companies, how could they prevent the parent companies from paying for illicit development?
Components could be designed by Mercedes or FIAT’s road car division, completely bypassing the budget cap. It wouldn’t even have to be illicit. The teams could actually “pay” for these developments. Though they wouldn’t pay the true cost, they’d pay pennies on the dollar. Without access to the books of the parent company, there would be no way to know the true costs.
Similarly, any of the teams with parent companies could pay for outsourced CFD testing. The only resultant product of such work is data. Good luck proving that data wasn’t generated within the team.
Without access to the books of those parent companies, how would the FIA’s forensic accounts know the teams were reporting costs accurately?
The answer is that they wouldn’t. Cost controls of this sort don’t work in a sport like Formula One.
So that’s it? Fingers in ears, ignore the fact that cost controls would be completely unenforceable? Just pass the damn regulations already?
The team orders mess showed us what happens with unenforceable rules. But hey, lets not allow the mistakes of history to give us lessons for the future.
Do you think an accountant isn’t going to know what a wing cost to fabricate or how many teraflops have been used to develop it. Or that they won’t see spending patterns across the 11 samples. The teams are no different than any other business.
Your mind isn’t devious enough. The accountants would never have a clue. They don’t call F1 the Piranha Club for nothing.
Here are just two examples that would be missed by all your forensic analysts.
1. Team X has their parent company run thousands of hours of illicit supercomputer CFD tests. They run thousands of possible configurations, far more than the team could afford. The parent company only passes the 100 most promising results to the team. The team then uses those as “randomly chosen” starting points for their own CFD work, saving the official team budget millions upon millions of dollars, and months of time.
2. Team Z has their parent company pay an independent off-site firm to create multiple versions of various components. The components are put through extensive testing to find the best versions. The off-site firm then puts the selected components through rigorous torture tests.
The cost for designing the optimal component would be passed along to the team, but only that cost. The team would not pay the costs of developing all the prior iterations, or for the rigorous testing. The team would avoid 90% of overall development costs, perhaps more.
I could provide further examples.
Without audits of the entire corporate umbrella structures, cost containment is unenforceable. That’s going going to happen, as the teams won’t allow it and the FIA doesn’t have the resources.
There are just two choices here, unenforceable cost controls, or no cost controls.
I rather think that if the teams would think a cost cap to be unenforceable, maybe even teams like Red Bull and Ferrari would vote in favour of it without much hesitation “Random”.
Money is nicely traceable, and subcontractors are no problem at all in that aspect, if anything the more complicated things to value are existing assets as well as use of assets and IP owned my affiliated companies.
And that is exactly why a team that can spend almost all it wants is not too happy to give up that “advantage” for the good of the long term functioning of F1.
Why are the teams against an unenforceable rule? Because unenforceable rules entice accusations of cheating.
Consider the team orders prohibition. It was a mostly unenforceable rule. The FIA removed it because of the unprovable accusations it created. Little good comes of unenforceable regulations.
No, money is not traceable when the tracers don’t have access to the accounts. The FIA would not have had access to the accounts of the team’s parent companies, the parent’s subsidiaries, holding companies, or shell companies.
You can’t check what you can’t see, and the FIA and their accountants would never have seen the books of Mercedes, FIAT, or Red Bull Drinks.
Maybe Ferrari and Red Bull didn’t want cost controls because of the competitive advantage it gives them. That doesn’t mean that cost controls would be workable. It only means they had dual reasons for not wanting them.
It wasn’t just Ferrari and Red Bull against the cost controls, it was also Mercedes, Williams, McLaren, and Lotus. Do you think Williams and Lotus want unlimited budgets? Of course not. They just realize that cost caps would be completely unworkable in a sport like Formula One.
They don’t need to see the parent companies books just the teams.
You keep writing this, but provide no explanation as to how such a thing might be done.
How, exactly, would a forensic accountant determine illicit or under-reported spending from parent companies to which the accountants have no access?
When you make extraordinary claims, it requires extraordinary proof.
No it doesn’t. Just believe what I am telling you.
Joe, we trust you in things Formula One, but lets be honest. You’re not an accountant.
There’s a reason even the paddock minnows like Williams and Lotus voted against cost controls. They didn’t hide their reasons. They said cost controls were unenforceable.
Two teams with a vested interest in cost controls admit they are unenforceable, but you say no?
You’re making an extraordinary claim.
I’m bored with this discussion.
I’ve no doubt.
That doesn’t change the fact that neither you nor any of the promoters of cost controls have addressed the core challenges.
I too like the idea, but the devil’s in the details. It presents a hugely difficult problem that might only be solved with harsh solutions that the sport clearly has no stomach for.
Were the issues solved, Williams and Lotus would probably be on board, perhaps even McLaren. There’s a reason they all voted against.
It is not an extraordinary. There is no secret to the cost of manufacturing. There would be 11 comparable samples and all kinds of expertise outside of F1 to consult. Money in vs product out.
No, it’s an extraordinary claim.
For example, the difference between a torture-tested component and an untested one will often not be apparent to even the most seasoned F1 observer.
The structure of a heavily tested component may just be a few mills thicker in a few locations. Perhaps a few attachment points will have moved a few CM. The well tested component may even be heavier, or offer *less* outright performance.
Were the majority of such testing performed off site and paid for by the team’s unaudited parent company, the FIA’s analysts would never have a clue. That’s just a small part of why F1 cost controls are so impossible to verify.
Brent, please help me out here. I fully believe that forensic accountanting can do the job, and I am certainly not challenging you about that. However, I am a bit hazy about how studying the teams’ books would be sufficient, and I hope you can educate me just a bit.
As an example, let’s say Ferrari has a particular aero problem and it deploys people-time and equipment-time which are worth only peanuts, establishing a record of how little it spent on this problem. Simultaneously, Fiat deploys people-time and equipment-time worth megabucks to help Ferrari with this very same problem… and the result is a set of Fiat-generated blueprints for some improved carbon fibre body part… and said blueprints are then delivered from Fiat engineers to Ferrari engineers. How is a forensic accountant to know that Ferrari has received this particular megabucks benefit if it has access to only Ferrari’s books which accurately show that Ferrai spent only peanuts?
Ferraris parts cost the same as everyone else to produce. Ferrari can’t produce more wings than Williams for the same money. You can’t have a bunch of extra parts, arriving at the track, above and beyond what the other teams are able to produce. “People time” is generally your biggest cost unless you can get the janitor to do the engineering. Equipment time is a constant, it cost X number of dollars per hour to run a class A widget shaper and it depreciates at X rate..
Wind tunnel and CFD work both require data. The data can be easily controlled by storage and access. They could track when , where, what part and for how long a teams data files were used. Computing power is already limited. The cost of running and depreciation of the wind tunnel and the computing system are a constant. X number of dollars per hour.
The only difference between F1 and other businesses is how they use the materials. The processing and materials cost a team the same as any business using those materials. Any cost saving process claimed by a team would need to be proven. If a team actually could produce more wings for the same money they will be able to show where the money was saved. What change they had made to the process that allowed them to produce more for less.
We know the FIA has the authority to level huge fines and spending can be tracked The only thing stopping a spending cap, in my view, is the big teams are spending far more than is thought. I would love to see what Red Bull truly spent on in season development last year or Mercedes to bring this car to the track. It would be interesting to see how much of Force India’s budget could be covered by Mercedes payroll.
The FIA would never see the extra parts, extra testing, or extra CFD work. The illicit work would be cloistered in the parent company’s shops until they hit on the perfect design, then tested it to death.
That perfect design, and only that design would be given to the team. The team would even be charged for that final design, but only that final iteration. All the parts leading up to that final perfect part. all the CFD work leading up to that final perfect design, all the testing would never be seen, and never be charged to the team’s budget.
The FIA could not prove the team hadn’t just hit upon a great design at their first attempt. The costs would line up, the fees would line up, the parts would just be exceptionally good and robust. A lucky hit.
You ignore the devious nature persistent among those in F1’s paddock. They’d dance rings around any vetting that didn’t included their parent companies.
That’s just an issue of data control. With the release of the formula you get your data file storage and access codes. Forensic accounting exists because of the devious nature of people.
“A lucky hit”. You think the other 10 teams of engineers would believe that?
You’re making a lot of incorrect assumptions.
For the other team’s engineers to realize it wasn’t a “lucky hit”, they’d need access to the other team’s books. The audits of other team’s books would never, ever, ever be shared from team to team. The FIA proposal kept the audits confidential. Even if it hadn’t, the teams wouldn’t allow it.
The forensic accountants are not experts in F1 component design. They will no more know a lucky hit from an able design. They will be ever so easily misled.
You’re also assuming that data files and access codes will function outside an organization. They won’t work because F1 teams outsource development. They do this today, they do it legally. The FIA’s proposed budget cap would not have placed restrictions on outside contractors, and would not commit them to audits. That outside work would be a complete black box to FIA audits.
In your responses, you’ve tried to paper over massive challenges with simplistic and unrealistic fixes. The truth is that verifiable cost controls would require extreme solutions. Solutions to which the teams and their parent companies would revolt, and in many cases, the FIA would refuse to fund.
Cost controls are a tempting solution, but the problems involved are nearly intractable.
What I’ve done is try to give a brief overview of how a spending cap would be controlled.
You don’t understand data control. Of course I know there is outsourcing in F1. There is also outsourcing in accounting, they are called consultants and they would be experts in F1 component design.
Random I assume you make a lot of assumptions. So assume away.
Reading all this forensic accounting stuff reminds me that it is a good thing to keep as far away from accountants and solicitors as possible……I once had to use a big city firm of accountants in a High Court case. Their advices cost the thick end of £25,000, and when asked by my solicitors & barrister to sum it all up, the 2 guys sent round ( one a partner ) actually said that ” well it could be this or it could be that…” my solicitor was horrified, so to my barrister, they asked if the accountants had any idea, after accumulating a £25k fee, what my position was? The accountants said…” well it could be this, or it could be that…”….fortunately, we didn’t have to use them, as the matter was settled out of court.
Brent… thanks for the thoughtful reply… I do appreciate it.
There’s something about what you’ve said that doesn’t quite add up for me… perhaps you can point put what about this I’ve got wrong…
The basic premise of what you’ve said is that design improvements are a function of things that can be quantified: number of wings manufactured, amount of wind tunnel time, computing resources, and so on. Of course, I fully agree that a systematic approach to optimizing a front wing will likely make use of such very quantifiable things.
(So far, so good… )
But I still have trouble with the assumption that design improvements are reducible to things that can be quantified and traced… as if a there is some arithmetic function that can tell us that a wing that was better by X% must have cost Y dollars. In the case of the difference between an underperforming front wing and a new, much improved version of it, I don’t see how we can say that the degree of design improvement can tell is how much expenditure was required. If that were really the case, then we’re almost saying that Newey’s cars have better aero mainly because they threw more quantifiable resources at them… as if his design talent really doesn’t play that much of a role.
(Please bear with me here… I don’t know very much about front wings, so let’s not take the details what I’m about to say too seriously… instead, please try to see my point…)
In the example I conjured about Fiat spending megabucs to produce a design for a new, much improved Ferrari wing, let’s say that the old, underperforming wing and the new, highly effective wing are virtually identical in many respects. Let’s say that the main difference is that the old wing features curvey aero surfaces that squiggle This Way… while the curvey surfaces of the improved wing instead squiggle That Way… so that the performace difference between the two wings is not a difference in manufacturing resources or construction, but rather is due to what we might call the difference in exactly how their curvey surfaces squiggle…. the Squiggle Difference? 🙂 How can anybody say that the new wing’s Squiggle Difference was caused by megabucks of quantifiable resources and not caused by a designer learning from experience, staring at the moon, and suddenly having a new and better idea about how to draw his squiggles?
Of course, in my example, the Squiggle Difference was indeed due to Fiat engineers spending truckloads of money to thoroughly attack the problem from every angle… it was not due to some inventive engineer at Ferrari having a valuable insight. But if Ferrari were to say that it was due to the insight and cleverness of their engineers, their salaried experts who studied the problem and then simply drew better lines, how can that be disproved from looking at the teams’ books? How can anyone know how much wind tunnel time and teraflops were required to produce the improvement?
And without access to Fiat’s books, how can anyone know that their windtunnel was roaring 24/7, and their computers were melting the woodwork, during precisely the 2 weeks it took to design the new wing?
And if Newey’s new wing was 10% better than the imagined Fiat-designed Ferrari wing, does that mean it cost proportionally more than what Fiat spent?
(Sorry for going on and on about it… just trying to understand…)
Rshack, I am not convinced that Newey is that much smarter (if at all) than any of the other outstanding minds designing F1 cars. He has had Williams (of old), McLaren and Red Bull’s budgets to work with (and he has built some duds too). A bigger budget allows you to test a lot more designs. Is he smarter than Simon Phillips, the chief of aero at Force India, or does he just get to try more ideas with his bigger budget?
Centralized data control has to be part of the cost controls measures and as Curly has said systems like that already exist. That is where you would see the cost of the wings design and testing (design, cfd and wind tunnel hours) and it may vary as the new wing may be additional design as opposed to new design.. The materials, equipment and man hours of assembly would be the other part of the cost of the wing and they are going to remain reasonably constant from one wing to the next.
You might have someone come up with an idea like blown diffusers or rear wing stall systems and sketch it on a napkin, but they don’t just build it and bolt it on the car from there. I guess you could try “I was just lying there in bed and the perfect wing, to the last mm, came to me” but I wouldn’t buy it and you would have to convince smarter people than I.
There’s pretty good information, between all the teams, on what things cost and how development proceeds. The teams would know they were in for a forensic audit and that cheating could result in huge fines ($100,000,000 for McLaren wasn’t it?). All of which are pretty good deterrents.
Well, Brent, you have convinced me beyond any shadow of a doubt that I don’t know beans about any of this 😉
Actually, you’ve hit on the problem exactly. The difference between a perfected component and a raw component can be a few mills of thickness or a little extra wiggly bit. The very best of the F1 engineers would be hard pressed to tell which version came before the other.
Brent has once again avoided this question. He can’t explain how FIA audits could tell a highly tuned and tested component from one that was not.
The reason he can’t explain this is because there is no way to effectively know this without access to the full corporate books. Since that access will never be granted, it is a dead end for supporters of cost controls.
One imagines that Brent isn’t thick, he’s just loathe to publicly admit this truth. Coming clean would poke a gaping hole in his theory that cost controls would be effective.
For the reasons you’ve pointed out, and a number of others, cost controls would be little more than a feel good measure.
Random: Yes, I believe I have outlined the problem fairly well.
However, I don’t know enough about the forensic integrity of the relevant metadata, nor about the likely deterent effects of significant fines/embarassment, to be able to judge how cheatable “the system” might be in actual practice. I wouldn’t be shocked to find out either that it is or it isn’t.
Brent has made assertions that I don’t know enough to challenge in any substantive way. I can’t very well challenge him to “either put up or shut up” when I’m in no position to “put up” myself.
Bottom line: While I (and you) do have a point, that doesn’t mean I know enough about all sides of the issue to know the correct answer. Whatever it might be, I expect that addressing it properly would require a journal article, not a blog post.
BTW, this issue would be a great case study for an article… especially one that translates techo-speak into plain English.
Because it involves an important issue about motorsport, one that everybody can appreciate, it likely would reach a far larger audience than such a thing normally would.
Until this is done by somebody who truly understands all the ins and outs of it, we’ll likely be subjected to lots of heated opinion without the benefit of sufficient substance…
autocad meta data.
The whole idea of the FIA running accountantcy checks on the teams, seems fanciful to me, and if you want anyone to do it, then British MPs would be the best choice as they really know how to screw money from a system!
Debunked the politicking of Ecclestone and Montezemolo ? Really Joe ?On what planet good sir might that of happened pray tell ? Because in all truth the race was a bloody parade of techno weenie wanna be taxi cabs crawling around on a Hot Wheels track in the middle of someones sand encrusted parking lot . Hey Joe ! I know you go on about how many years you’ve been following F1 and the credence you feel those years give you : but the fact is my 50 years trumps yours by some amount ; so don’t go discounting my opinions on the basis of experience . Being a member of the press , especially in this modern ” NoBrow ” era not holding out a whole lot of credence IMO . Not to mention the fact that my career is not on the line should I chose to be forthright about my opinions. I mean seriously Joe [ not so ] ole bean . Your job and press credentials may be on the line should you be so bold as to tell it like it is with the new breed of F1 [ for the last five years I might add ] But these too will pass regardless . Whereas your credibility good sir ? Well .. destroy that as you are at present and with comments such as this and thats a consequence you’ll live with for the rest of your life . Your choice . A bit of advice from one older and wiser though ? Keep the Credibility intact … and let the rest of the chips fall where they may . You may be shocked as to how much more success you might have if you do 😉
BWTM ; As to the somewhat ludicrous assumption that Governments and Countries will pony up for F1’s bills in the future . I’m afraid Joe thats more than a bit delusional and unrealistic . In case the real worlds been passing you by of late … there are NO countries at present with either the funds or desires to foot F1’s bills .. especially in light of the fact that like it or not good sir … F1’s popularity is waning worldwide faster than a lollipop in a hungry child’s grasp and has been for over a decade . I can tell you for a fact … no one in the US … be it City / County / State or the country itself will be willing to put forth another dime in light of the millions being lost with the US GP in Austin . Oh … and btw .. in case you’ve also missed out on this little tid bit . NO host of the Olympics since 1964 has ever made money on them [ including Blighty * ] and in fact most are still paying off their debts decades later . So no case to be made on this one I’m afraid . And yeah .. living in CO .. I am so bloody glad in light of SLC and VCBC’s Winter Olympic debts we told the IOC where to take their Olympics and Shove It . With as an aside … OUR ski resorts outselling both BC’s and Utah’s combined despite them both having the Games there .
* Fact is the UK’s most likely looking at 30 years minimum to pay off those Summer Games
You need to find another sport to watch if this is your view of F1
This might be Exhibit A demonstrating that Joe can take an ad hominem punch from a pseudonym and shrug it off ho-hummedly…
p.s. What kind of guitar do you sling?
If this had been handwritten, I imagine it would have been in green crayon.
I like the guy, he’s good fun! And rather than green crayon, I can imagine he would probably have sent it by telegraph at some lonely Old West railroad station…..
Aah . . . I love F1 for all the hot air and noise it creates.
Yet countries are still fighting over who gets to host them, gone are the days like 1948 where no one wanted to be the host, now they are booked out solid with a big fight from several worthy contenders…
I went to see the Ladies Beach Volleyball during the 2012 Olympics, the money spent on the Olympics was more than repaid by that event alone 🙂 in my view
Guitarslinger , your 50 years doesn’t trump anything. It’s the experiences part that counts. Reading your post you still don’t know anything about F1. If you had actually been paying attention to F1 you would have known who Joe is and you would understand what a great race that was. I’m sure you don’t subscribe to GP+ or you would know how deep Joe’s contacts go. One of his associates has attended more than 500 F1 races and Joe is approaching that number. All who know him know, he calls it like he sees it.
Frankly your post is just a mess. You don’t understand the racing, you think Joe has no credibility because of this article, you think F1 has no value and you have a problem with the Olympics. That about sum it up?
Hear, hear . . !
It seems to me Si that you are always going to agree
Having worked for several years on the 1984 Summer Olympics, I’m pretty sure the SURPLUS (profit is for for-profit organizations), has been administered by LA84, previously called the Amateur Athletic Foundation. Since inception, the Foundation has invested more than $197 million in Southern California by awarding grants to youth sports organizations, initiating sports and coaching education programs, and operating the world’s premier sports library.
Couldn’t do that without having made some money.
Nice article. But why depend on a guilty verdict. The way Bernie has spoken over the last week is not the old Bernie. I wonder if he’s losing the plot, in which case it’s game on for who controls F1.
But what do I know, I understand that.
As I predicted earlier all will be well with F1 when there is actual racing. The last event was a race of daring and skilled drivers exhibiting excitement unmatched in several years. How much of that can be put down to the safety car is a question. Of course it bunched up the field but did it also allow drivers to not worry about fuel use and thus press on? My understanding of the fuel rules is unclear.
Also did the pointed nose contribute to flipping the Sauber?
This reads like a trial balloon. Or at least, I HOPE someone within F1 is thinking along the same lines as you.
No it is pure logic. Nothing more, nothing less
I find it interesting that the people who did not want to write off the “new” F1 after two races, now want to proclaim it a miracle of innovation and competitiveness after one solitary race. Yes, Bahrain was super exciting. But the cars are still ugly and they sound even uglier. Let’s see where thing stand after, say, six or eight races. For sure, the cars will still be ugly and sound ugly, but as for the rest, let’s wait & see…
No, the cars will cease to be ugly and the sound will be fine because human nature will see to it.
It’ll be fascinating to see how many noses make it to the end of the season without makeovers. I’m looking forward to 09/05/2014.
Agreed Joe, I’ve already stopped noticing the ugly noses, and am enjoying the sound more every race. Everyone will have forgotten about both issues by Monza, especially if there’s a good championship fight on.
BTW…the cars have been dead ugly since raised noses came out some 15 years back or so…that and overly complex ugly front wings, bargeboards etc etc, no F1 car such as a 2004 Ferrari for example, can be classed as a thing of aesthetic beauty, on a pare with say a Lotus 79. The trip to aeroland has been a disaster for those of us who like our cars to be fast but also an object of beauty too.
Two utter boring fests and one good race and now suddenly everything is “debunked”… Ahhh the bias…
I was not bored by any of the races. I guess you need to learn how to watch them
Deepest respect to you and your position Joe, but the majority doesn’t have the same access, i.e. being right there adjacent to the action… from which to form a better/different opinion or judgement. Access to the party is not something that can be “learned”.
With live timing on a computer and a HD tv, I find the fans access better at home than the track. Throw in a PVR and you have great instant replay capability. I’ll still make the annual pilgrimage but tv viewing has gotten pretty slick and that’s where I’ll see most of the races.
Considering this was the third race of a brand new formula, I think we are in great shape. A couple years of development and these cars will be very quick.
What was boring about the season opener?
Regarding the season opener in Oz…well…when the GP2 cars are setting faster lap times than the F1 cars and the engines of the GP2 cars are sounding much louder and aggressive than the F1 cars – then there is a problem with F1 (in my opinion).
£2 Million to run a GP2 team….£250+ Million to run a slower, heavier, quieter ‘top’ F1 team…
Damn! I missed that Oz GP2 race.
Joe – the one flaw to your otherwise interesting plan is that, if the teams make more money, then potential team owners would pay more to buy a team. That would then increase the debt required to pay for the team, increasing the interest cost and reducing the profit. Some of the premier league teams are a good example. So effectively all you are doing is transferring wealth from CVC/Bernie to the team owners. To a point, that is a worthy goal – ie to the point where the teams are viable.
The other thing that you have not mentioned, is that the key beneficiaries of the spending war has been the engineering talent. There are a lot more people employed and they are able to be better paid.
The key is to find the right balance in all things. That is all.
The total spending in F1 would not necessarily drop or employment, with a spending cap. If the poorer teams have more willing sponsors because the big teams need less, then money will simply move. Small teams that have new money need more engineers, big teams down sizing need fewer. A spending cap is the only way F1 will retain the independent teams. The independents are the real heart of F1.
Above all, I would like to see Red Bull, Mercedes and Ferrari compete with Force India, Lotus and Williams on equal budgets. Is Newey the greatest or is it just that he always have the most resources?
If the deal was changed for 85% return of profits to the teams there would be rather less the need for cost capping, no?
Possibly but the key to sustainability is a small profit for everyone
Every successful sport has some element of cost capping or cost management. The ideal example being the NFL (from the owners point of view) – not one team, no matter how dysfunctional loses money. I think the poorest is worth at least $300 million. You even have teams with vicious rivalries… yet some how the owners work together for the good of the sport (or at least their wallets, depending on your perspective). It probably helps that the guy that “runs” the sport is an employee of the team owners, but once hired he has a very long leash.
Years ago you discussed the possibility of your press pass being yanked. Lately you seem to have transitioned from refreshingly honest to unbelievably brave – seemingly unconcerned about any repercussions.
Many of your readers are F1 insiders – your opinion must be discussed widely in the paddock and throughout the sport. What is the worst thing a pissed off billionaire might do to a respected but troublesome F1 journalist? Are they smart enough to ignore these posts or do they ever let you know how they feel? It’s a very small F1 world – these people know who you are.
You have answered your own question
Three more races like Bahrain and Bernie will be claiming credit for the new formula. And a salute to Mercedes for letting Hamilton and Rosberg race
4 World Championships in a row – I’d say Red Bull are pretty efficient.
If they are going to cost cap then they should open up the rules a little more to allow for some ingenuity.
Also, did Force India and Williams make the Mercedes engine? I think not. They’d be glued to the back of the grid if they were running Renaults.
I think you are missing the point
No, they’re effective. Different things.
There is nothing efficient about Red Bull, they win by massive expenditure and consumption..
As you say the big teams are slightly mad or stupid about the cost cap, but I actually believe they do want a cost cap but like most of this they want it under their terms.
I notice everyone wants to blame RB and Ferrari but Mclaren and Mercedes are just as guilty. I still believe the problem with the cost cap for non manufacturing teams is that companies like Mercedes and Ferrari can sidestep the cost cap with the large infrastructure they have in the existing businesses. Hence the reason the other players won’t agree , no matter what you say no company who has investments of this nature will allow any competitor a advantage and this has nothing to do with racing companies but all corporate businesses.
If the shoe was on the other foot I think Mercedes would be complaining too, and how much money have they really spent to get were they are I could see how Merc could hide if a cost cap was in place.
The other thing to note is the drivers can’t even agree on a weight as the lighter drivers don’t want to effect the advantage they have, Human Nature Joe or just looking after themselves instead of putting the sport first.
I think it’s great everyone moaning and groaning gives all the internet fan boys something to bang on about.
The way it stands at the moment Tony F will pull the plug if he is true to his words and follows your logic.
Your visa is ready welcome to China
Re: driver opinion about weight issues, it’s not the drivers’ job to make the rules… nor should it be… it’s silly to expect them to agree.
It’s not silly for teams to attend to what’s best for the sport… teams in other major league sports do it regularly…
You could say the same thing about the teams in that case it’s not the teams job to make the rules nor should be it’s silly to expect them to agree. Your words
In the context of my comment the large corporate companies look after their own interests first it might be a sport but it’s also a business run by some very large companies.
If Bernie was convicted it is clear that CVC would have no choice but to let him go. However I wonder whether BE’s conviction alone provide sufficient grounds for the FIA to terminate their 100 year deal with CVC? On what grounds – bringing the sport into disrepute? That might be hard to claim if they act quickly to remove BE if convicted. But even then, can you see CVC giving up their F1 cash cow without a fight or large payout?
BTW – after watching the interviews with the various players at Bahrain, Todt needs some serious media training. I thought Ron Dennis made some sense in all of this.
If you think that a criminal conviction is not bringing something into disrepute then one can only wonder what is?
Not saying that by any means, but you mentioned some kind of morality clause or FIA ethics committee the FIA could rely on to terminate the CVC deal. I’m just questioning how the FIA could rely on either of these, as both seem unlikely. Rather I would have thought the FIA would be seeking to invalidate the CVC sale because it the commercial rights were acquired through fraudulent means (i.e. BE’s bribe). In any case, I am suggesting that would still be a difficult option for the FIA to pursue.
When did CVC enter into a 100 year deal with the FIA?
When they bought FOM and inherited the 100 year deal.
Silly me… all along I had assumed it was Bernie’s deal and thus subject to being voided if Bernie did wrong.
Did the FIA have any right of approval re: CVC’s acquisition?
So, then, if we imagine that BE is found guilty, the FIA’s argument would be that CVC brought the sport into disrepute via the supremo they left in chage without adequate oversight, thusly permitting him to use the sport in felonious ways?
I suspect the there has never been a change of control
I’ve always quite liked old di Montezemolo but he has a bit too much of the ‘Old Man’ in him and he clearly sees himself as the inheritor of Ferrari. Like Enzo, he spends too much time messing about with politics off- and on-track, issuing cryptic messages via the media, attempting to manipulate the rule makers and not enough time sorting out the team and the cars. As for Red Bull, what goes around, comes around. It’s funny how from being the bright, exciting new team bringing a blast of fresh air to the sport, now Red Bull are the conservative, moaning ‘old guard’ while it’s Ron’s ‘corporate’ McLaren and Mercedes works team who are the ones speaking up for the quality of the sport.
While I agree that a cost cap is needed and support the idea, I’m not sure I see the results Force India and Williams have acheived in the first 3 races as a ringing endorsement what a smaller team can acheive versus what the bigger budgeted teams can. Now if one supports the theory that a larger budget gives teams a clear advantage, it would stand to reason, I guess, the size of a teams budget really comes into play as they get deeper into the season and the ability to continue to develop and improve the current car factors in more heavily into the race results. However, one could also contradict that better budget= better results theory by simply referring to the poor results garnered by Toyota and Honda during their final years in the sport. Two teams with top tier budgets and finishing midfield or even slightly worse.
Points are points
I agree with Vince, since they are customer engines you need supplier budgets included, its a bit optimistic to say they did it all off their own small budget
I would compare the average budget of
Mercedes + Williams/Force India/Mclaren
Ferrari + Sauber/Marussia
Red Bull + Torro Rosso/Lotus/Caterham
If Ferrari had have built the best engine this year the Marussia might be looking handy on the smallest budget – but it would have been thanks to Ferrari’s mega dollars.
Mercedes decision to increase its spending for 2014 has clearly paid off (Just imagine how much pace they have in reserve), so spending more is not necessarily a bad thing.
in some cases I agree, but overall if the sport wants to be efficient which is no bad thing then they should agree to a cost cap. Force india and Sauber have always punched above their weight in right circumstances, those circumstances would be more common with a budget cap. I still think the top teams would still be top teams and next time there’s a financial crash or recession the sport doesn’t have to go into panicked cost saving mode which while some good ideas were implemented some bad ones in my opinion too. I also think its too easy to give all the credit to the Engine too it helps but everything’s got to work with it as part of the overall package
I think Toyota and Honda are good examples of lots of money and no leadership. Brawn takes control of Honda in 2008 and in 2009 the same team wins the world both championships, with less budget.
Is Newey really in a class by himself or is it because he has always had huge budgets.
I’d like to see $150 million cap. The bottom teams will be able to find more sponsor money as the big teams will take less and we will have a more financially level playing field. We will get to see who really is the best team.
To be fair, Brawn had the benefit of a huge budget used in developing the 2009 car, and funding for the year. Come 2010, and despite their success, Honda/Brawn/Mercedes were largely back to where Honda had been. As for Newey, people seem to forget that for all his time at McLaren, he only produced two Championship-winning cars and on balance, a fair share of dogs too.
It was Brawn that was in charge of the 2009 development for Honda. When he bought the team the budget (and staff) dropped dramatically. Mercedes bought a much smaller organization than Honda was. Mercedes has spent the last years building the organization up again.
I agree Newey has built some dogs but he has always had a big budget. I’d like to see what he could produce on Force India’s budget.
CVC, Black Rock, Norges and Waddell & Reed did not pay Bernie his GBP billions without ensuring the 100 year agreement with FIA is air-tight. If Bernie is convicted the press release announcing his dismissal will be released within one minute thereafter.
But if the deal that brought CVC into the paddock was ruled to be a corrupt one, then the repercussions are far wider and simply handing Bernie his P45 will not make it all better.
CVC and Waddell & Reed were both clients of mine at GS; they did not get involved with FOM w/o understanding all aspects of, and all contingencies within, the various contracts. Keep in mind that the value of FOM is created by those contractual obligations, e.g. with circuits, with FIA, with TV, with certain teams, etc.. Were it not for those contracts F1 as we know it would have come apart years ago.
If they knew what they were doing, then they can take the heat.
Even if Bernie were found guilty of (criminal) bribery in the equity sale to CVC, that would not negate the deal that gave CVC its controlling stake. At best it would give the aggrieved party(s) (Bayerische Landesbank, (JPM)?) cause to sue Mr. B.E. and/or FOM for financial damages in civil proceedings.
In my view, worst case for FOM would be making the aggrieved party(s) whole for the value lost (due to the bribery) based on a fair valuation of the stake at that point in time (2005). The underlying transaction cannot be “unwound” as you cannot unscramble an egg.
If the teams want to take control of formula one they will either need to buy the equity from CVC, Waddell & Reed, Black Rock, Bernie, et al (with or without Bernie’s participation), or they can break away and form a new race series. Obviously the latter is near impossible due to the contracts the teams have signed with FOM, not to mention that marquee circuits are locked in perpetual contracts.
If he is found guilty of a criminal charge he will have brought the sport into disrepute. The FIA has the right to terminate agreements with people who do that. Remember, although CVC takes the money, there is no evidence to suggest that it has legal control. If it had the FIA would have considered a change of control and I am assured that has never happened, so legal control would be Ecclestone’s…
I’m aware of where the value is, but I’m also aware that sometimes when the tide goes out, we tend to see a surprising number of people who should know better have been swimming naked, so to speak.
Reblogged this on The paid spectator.
Were can I submit you as my nomination as Bernie’s successor?
I think the most interesting result from the race, and something that did come about from the intervention of the safety car, is that the Mercedes cars actually went flat out afterwards (the first time I believe they had done so in a race). This, according to the BBC, showed them to be 3 seconds per lap faster than any others!!!
In any form of motor sport, let alone F1, that is a very big difference!!!
Accepting that CVC are the owners of FOM, and FOM own the commercial rights to F1, and BE is the Chief Executive of FOM, the question would be whether a criminal act committed by the Chief Executive would void all contracts between the company and other parties.
In normal circumstances, this would not be the case. One has to draw a distinction between corporate action and the action of an employee. To what extent did any other senior employee of FOM know about BE’s actions? To what extent did the board of FOM know about BE’s actions? If the answer to both questions was nil (or that it couldn’t be proved that it was greater than nil), then a conviction for BE would be the action of an individual, not the action of FOM as a corporate entity. In that case, it would be very difficult for the FIA to argue that FOM itself had brought the sport into disrepute.
CVC is a much bigger company than the FIA, with access to a much bigger budget for legal action. I’m afraid it seems hardly likely that they would give up an asset worth many billions without fighting a huge legal battle with FIA, in which FIA’s legal (as opposed to moral) case may not be all that strong. As you say, it could all boil down to the precise wording of certain secret clauses about termination of the contract, but if BE wrote those words, it seems hardly likely that they would make it anything other than extremely difficult for FIA to get out of it.
Except that their purchase of the business would have been a corrupt transaction…
I agree that could be the case, but again the corrupt actions of an individual wouldn’t necessarily void the purchase. The purchase was a matter between CVC and the previous owners. The previous owners may well argue that they were improperly influenced to sell to CVC, but the question may be did that actually affect the outcome and/or was there really a better alternative bid?
Even if the previous owners succeeded in having the sale declared null and void, I still can’t see how that would lead to FIA regaining the commercial rights unfortunately. The ultimate scandal is surely that the FIA agreed to sell the rights on such disadvantageous terms in the first place?
From a fan point of view. The new technology is intriguing. F1 got this part right.
For the long game – well we will see how it plays? If BE is found guilty I have doubt(s) that Todt will change much.
Keep up the good work…..
Mr. Engine is a dinosaur
Whether the potential fall-out of the Munich trial will cause Mr E to leave or not, it is telling though that a business as F1 is unable to plan and execute a decent and timely handover of one of the leading figures. Let’s be real: What global company – assuming we can label F1 like one – allows a 83 year old still to be in charge? Just as Microsoft finally has to pull the plug on XP now, F1 should pull the plug on Mr. E. He is a dinosaur. He likes the noisy smelly old tech, he is Mr. Old Engine. Time has moved on.
Face the music.
Now they have agreed to “do something about the “noise”, the “music”, I dread that we end up with something inefficient and noisy. Who pays the bill to change the score?
Bahrain was superb. It was thrilling. And the onboard audio came through much better this time. And the difference between the engines is telling. Where a Mercedes engine offers an array of sounds, clicks, whistling and rumbling, the Renault has an unclear sound to it. I could not hear the turbo on the Red Bull, on either Merc-powered car it was easy to hear. And there is this metallic clicking when the car approaches a turn. Can’t tell where it comes from, but the whole machine produces a lot of interesting sounds.
If, and hopefully the tech committee will find no way, they come up with an adjustment, the nature of the current sound should not get lost. The Mercedes cars, shining under the flood lights, looked and sounded a bit like the race-engines from Throne. They sound and look futuristic. Perhaps it is not a coincidence that the best engine music comes this time from Germany. They, the Germans, have a certain history of composing impressive music that is timeless. The 9th was heavily criticized in it’s early years. “Sounds very much like Yankee Doodle” a newspaper wrote. Those critics are history, the 9th still kicks ass according to a YouTube fan.
Mercedes has made perhaps not a 9th yet, time will tell, but the music is superb, and the orchestra conducting it too, allowing two first violins to compete for the lead role.
Ode an die Freude in F1.
Two spring to mind straight away Rupert Murdoch 83 and Warren Buffet 83
Re-enforces the view that F1 is a private club with only 3 influential member and one of those works for Ferrari…
Todt will not do anything to endanger respect for the pomp of his position. He has shown that he can act in an unseen underhanded way (Gary) and in a violent public reactive way (David) But a major high profile role is required of him in order to re-organise F1. Statesmanship rather than pomp is needed, but I rather fancy we shall not see it. He will fiddle while Rome burns.
As far as I know (which is not a lot) Martin Brundle is the only “journalist” to have enraged the FIA sufficiently for them to have taken legal action, but he was behind the shield of a newspaper and it was back in Max’s day. (and the point he made was very valid.)
What I can’t understand is the difference between the decisive J Todt 2013 (placing his divisions for the final confrontation with Bernie, setting up the new tribunal and hauling Mercedes in to give the process a shakedown) and the pusillanimous J Todt 2014 (unwilling to say anything positive about the new formula or counter the agitprop from Bernie, Monty, and Dietrich and his untermenschen).
The most decisive thing he’s said about the new rules is to deny that there is any driver weight/health issue (this despite the fact that JEV was hospitalized before Malaysia and Sutil is trying to drive without a drinks bottle — to what extent was his incident in Bahrain connected with dehydration-induced wooziness, I wonder?).
Is he just trying to maintain a gnomic silence and wait for the judgment at Munich? Or is there something in the air at the Place de Concorde that gradually dissolves the inmates’ connection to the real world?
Sadly, the organising committee have fixed their membership so that those with big financial interests decide things. Letting small teams fall by the wayside and them running a third car is one way for them to get their hands on more cash in the medium term.
F1 never thinks about the long term
There are a lot of bright fellows commenting on Joe’s very cogent and forthright blogs in the last days. But Joe is absolutely right. Unfortunately, the future may only serve to prove that he is, which may not be good for F1. Keep at it Joe, and let the chips fall where they may. This year’s racing has been terrific. There just need to be more F1 writers saying the kinds of things you have had the guts to say.