How To Make an F1 Budget Cap WORK

Cost cutting in F1? Few people currently doubt the need for this—after all, the fact that it needs to be done is pretty much the only thing that FOTA and the FIA are in complete agreement on.

But obviously the FIA's proposed two-tier system, with teams who agree to limit themselves to a $60 million budget getting greater technical freedom, has generated a lot of controversy. But one thing has been obvious through it all—just about everyone hates the idea. In fact, Spanky and the Troll appear to be the only people who think it's a good idea.

Reasons for opposing it range from claims that a budget cap would be unenforceable, which is a load of crap, to the planned cap being far too low, which is the "DUH" statement of the year.

The problem isn't the idea of budget caps, nor is it anti-F1 as many fans claim. Many people like to point out that F1 is for the elite, the best of the best, the Gods among drivers and engineers.

The above is true, but where in there is it written that to be the best you have to spend monstrous amounts of money?

Some will note that it takes monstrous amounts of money to become the best, but we need only look at Toyota to know this is no guarantee, and old teams like Jordan to know it's not a necessity.

The fact is, the BEST engineers will get it done with as little money as possible. Limitations only force them to become more creative.

An analogy I like to use is the Console Wars of the early 1990s. The Sega Genesis versus the Super Nintendo. The SNES had better games and superior capability, but the more limited Genesis required designers to get more creative with their games, resulting in more enjoyable games. Additionally, the Genesis' limits were pushed more regularly than the SNES's, and when you pushed the limits of the genesis, it really showed. Not so with the SNES.

Capped teams would be like the Sega Genesis—they have to use creative techniques to do the best they can with limited resources. They're given greater technical freedom to make up for it, while the uncapped teams have their wide-open SNES non-restrictions, but will have to make basically the same cars we're seeing right now.

It certainly has the potential to make the future of F1 more interesting.

But there is an inherent flaw in the proposed system—a serious flaw.

The system is based around the fact that, budget cap or not, the economic downfall is going to make it possible for F1 teams to be started on the cheap for a few years. The FIA's proposed cap is based on the estimated amount a startup team would need to run competitively right now.

That's all well and good, but...what about when the economy starts to recover? No matter how many technical freedoms you give the capped teams, eventually they'll fall behind due to not having the resources to make significant strides.

Additionally, applying the cap to the whole team will, in the short term, destroy many jobs on these teams. That's unacceptable in this economy.

A budget cap should be applied to one thing, and one thing only—The development of the car. Importantly, engineer salaries should not be included there.

Even then, a $60 million cap may work for now, but the FIA will either have to rewrite the rules every year as the economy increases, or they're dooming anyone who accepts the budget cap. And under a two-tier system, nobody would willingly be capped anymore, thus making the system redundant.

The cap needs to be reasonable so that teams would be willing to accept the terms of the budget cap long-term.

It needs to be around twice as higher than it is, assuming it only applies to the development of the car. $100 million allowable on the car each year would not only be an acceptable drop in costs (almost 50% in regards to most front-running teams' annual car development costs), but it's high enough to encourage teams to take the cap in order to get the greater technical freedom.

And then we'd be seeing a lot more true innovation come out of the teams' shops from the best and brightest engineers.

Isn't that what F1 is supposed to be?