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Teams react badly to Mosley's £30m cost cap
Teams react badly to Mosley's £30m cost cap
Posted By:   |  17 Mar 2009   |  6:46 pm GMT  |  50 comments

I nearly choked on my Rich Tea biscuit when the news came through about the £30 million budget cap voted through today by the FIA world motor sport council.

The teams did likewise. They did not expect this after presenting such a unanimous front the other week in Geneva. Their confidence that their unified voice would be taken into account by the FIA, when deciding rules and policy, was misplaced. Instead Max Mosley has gone much further than the teams wanted to in stripping costs out of the sport. FOTA has just put a statement out which makes clear how annoyed they are with this move,

“With regard to the decisions taken today by the FIA World Council, FOTA would like to express its disappointment and concern at the fact that these have been taken in a unilateral manner, “ said FOTA president Luca di Montezemolo. “The framework of the regulations as defined by the FIA, to be applicable as from 2010, runs the risk of turning on its head the very essence of Formula 1 and the principles that make it one of the most popular and appealing sports.

“Given the timeframe and the way in which these modifications were decided upon, we feel it is necessary to study closely the new situation and to do everything, especially in these difficult times, to maintain a stable framework for the regulations without continuous upheaval, that can be perplexing and confusing for car manufacturers, teams, the public and sponsors.”

This has the potential to open up a dangerous rift between the Formula 1 teams and the FIA just as the new season starts. It is likely that Mosley has done this to get teams to accept the general idea that there will be a budget cap system in F1, much as he did with standard Electronic Control Units, engine freezes and so on.

He has to lead them kicking and screaming to things which then get accepted. A £30 million budget cap will never be accepted, but once the teams have gone over the hurdle of the cap, Mosley probably reckons they will meet somewhere in the middle on the numbers, so around £50-60 million, which let’s face it, should be enough to run an F1 team on. But the road ahead will be rocky and this is a real test of the mettle of FOTA as an organisation.

In Geneva I asked Montezemolo whether he thought Max would feel the FOTA proposals went far enough and he said that they would put them to him and have a dialogue. It’s fairly clear that there hasn’t been that much dialogue this time around, not like in December when the FOTA engine package was agreed by the FIA in the days following Honda’s shock withdrawal.

What’s behind this? Max wants to keep the smaller independent teams in the sport and encourage new ones to come in. He hates the idea that there are two empty franchises. But the budget cap puts manufacturer-backed teams like Ferrari, McLaren Mercedes and BMW in a difficult position. They are to be given the option of spending as much as they like, but the budget capped teams will get more technical freedom, more engine power and better aerodynamics, to make them competitive. The boards of the big car firms will never accept this and you’d have a two class F1, which never worked in the turbo/non-turbo days.

The eye catching Mosley quote is the one where he dismisses suggestions that the budget cap would be impossible to police,

“We went into all this very carefully some time ago,” he said. “We involved forensic accountants from Deloitte and Touche as well as financial experts from the current teams. The vast majority of payments are traceable and any benefits in kind can be valued. There were a number of meetings. It became clear we could do it. The problem was getting the current teams to agree a figure. Also, the majority wanted a lot of exclusions such as land and buildings, the team principal’s salary and the drivers. We would also need the right to carry out very intrusive audits and impose severe penalties for overspend. However these difficulties no longer arise because each team will now be able to choose whether or not to run under the cost cap.”

The other little gem is this one,
“We will make sure these advantages do no more than balance the disadvantages the cost-capped teams will have because of their very restricted budgets. As said, we will balance the median performances by adjusting the cost-capped cars should this prove necessary. The other cars will have stable technical regulations in return for which we understand FOTA intend to provide guarantees of continuing participation until 2012, underwritten by the major car manufacturers.”

Mosley has leapt on the guarantee given in Geneva by the manufacturers to stay in until 2012 and thereby cut their wriggle room on this. On top of that he’s saying that the FIA may adjust the equivalence between capped and non-capped teams’ performance, possibly even from race to race, which he knows is not F1, but it’s a strong position from which they will eventually have to agree something.

What makes this a particularly big play is the fact that these things have been voted through, so they aren’t proposals, they are now rules which will need to be ‘unmade’ once the negotiation has taken place.

Expect more from FOTA on this…

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Sorry that something went wrong, repeat again!

It’s gonna be hard for sure 🙂
As mentioned above, I was thinking what if some suppliers/sponsors decide to give free parts (for ads?) or cheap parts?

The big teams will be winning this again! 🙂


Time to close the curtain on the Max and Bernie show. Everything they do lately seems to either attack the teams or the circuits.

I agree with Richard. If I was a team boss I’d be looking seriously at offshoring. Better weather in Delhi anyway!

Richard Jackett

We already had Bernie trying to move all the venues outside of Europe.

Now we have Max effectively pushing the the teams to do the same. I imagine £30M in Rupees would get you a lot of good engineers.


why do the FIA feel the need to get involved in this? FOTA have worked together, these are the guys that are running the show, they have proposals for budget cuts allowing in the independents to compete at the highest level (theissen, dennis, di montezemelo etc have all agreed that they must never have a situation where independent teams cannot afford to compete).

what is the status of the concorde agreement? teams must be seriously questioning whether they want to stay tied into this farce of a championship.

max is (yet again) trying to demonstrably exert his power over the sport, and wouldn’t know a sustainable future if it spanked his ass.


We need an F1 Fans Association.
First demand; caps on ticket prices.

Sleep, ’tis but…


Max and Bernie shaft the teams..what’s new!?


How about a cap on how much the commercial rights holders can take out of the sport before you cap the teams? The sooner the teams create and control there own championship the better it will be for the teams and the fans. The technical rules should level the playing field this will just create to different formulas in the same championship.


Is there not a way around the budget caps by teams buying things from themselves? For example ‘McLaren F1’ team buys it’s front wings from ‘McLaren FrontWing Ltd’ for £20, they use drivers contracted from ‘McLaren Mercenaries PLC’ for £50 per race and get the electronics from ‘McLaren & Sons Widgets Factory’ for £30.

I think Max may have too much blood rushing to his head from his afterwork activities.


I love the idea of the big teams having to operate with limited resources.

A budget cap would also level the playing field somewhat.

HOWEVER – how on earth would you police this? Yes the FIA can check the books – but if the FIA could not police the traction control ban, how are they going to make sure teams are being honest with their accounting?

Also, ‘cost’ is not the whole story – the resources that teams have acquired – or have access to through their parent companies, can make a huge difference. Ferrari for example, are the only team with their own private test track.

The budget cap might actually make it harder for new teams, as they will need to invest their money in brining their resources up to the level of the other F1 teams, leaving them less to run/develop the car.

What price do you put on the intellectual property (car designs) shared between Red Bull and Toro Rosso?

However what I really cannot stand is the idea of trying to balance two different rule books – that is never going to work.

Finally, how much money does Bernie currently pay to the teams from the TV revenue? Is it more or less than £30 mil?


JA writes: Lot of negativity here about the proposals. It’s a big lump to swallow in one go, that’s for sure. But this isn’t the end of the story and I think we have to wait and see what we end up with rather than judge now. Although it’s been voted through I think the final outcome may well be quite different, even if the principle stays the same.

There seems to be a lot of FOTA support in your comments, which is interesting. Gert Pauman makes a good point about engine money the manufacturers make from customer sales. It’s certainly a complex beast this decision.

Also to Snowy, bear in mind there are people’s livelihoods at stake here. I’m not talking about drivers, who will find their level, but factory workers. I was at Renault’s HQ yesterday. There is a great example of a well-run, no extra fat, team operation, but if budgets come down that much probably only a quarter of them will stay in work. F1 needs to strike a balance which makes it possible for new teams to come in and thrive and for the big name teams like Ferrari and McLaren to build on what they have established so far. All of this is being played out in the context of a massive global recession, which is hammering the car industry. Common sense must prevail all round.


I remember reading not all that long ago that FOTAs united front was ushering in a new era of F1, minus all the politics that have dogged the sport over the years.

It looks like politics are back in style! I think overall, regardless of who is right or wrong in what they are doing, it’s such a shame that the Max, Bernie and the teams can’t just work together to make the sport better.

I would have thought previously that the best way to generate a higher viewing audience would be to simplify things for the casual viewer.

The medals system that Bernie was working towards seemed to have the right idea in this regard. The most golds at the end of the season wins, and then if there is a tie it takes into account silver medals. Simple right? Well now we have a hybrid system which becomes majorly confusing for the average person if there becomes a situation where 2 or more drivers on the same amount of wins. Suddenly these points that drivers have accumulated all season but never seemed important may actually come into play.

Now we also have the joy of a budget cap. It’s a simple idea and I think it could work. But when you start saying things like ‘we are introducing a budget cap, which you can choose to accept or not and there will be benefits to adopting either procedure’ it’s just like opening Pandora’s box. If a budget cap is put in place, it needs to be imposed on EVERY team. A two class system is just silly really.

I hope common sense prevails. I’d like to see the sport grow a lot bigger and better.

As for you James, what are your plans for ’09? I’m sure you’ll be in Melbourne for the GP but in what capacity?


Seems to me that FOTA could quite easily call Max’s bluff on this one and just decide not to enter into any negotiations and accept the whole package exactly as it’s presented.

The current teams are never going to agree to change their operations to fit a cap that low anyway so it’ll only ever apply to new teams that might wish to enter F1. Sure these new teams will have more technical freedoms but after shelling out for start-up costs and paying another few million bucks for transport (in their first year presumably they’ll have to pay, without the benefit of free transport as a result of their finishing position in the previous season) it’ll be a pretty meagre budget to run a two car team for a season. So there’ll be no real prospect of actually developing any technical advances and hence is likely to produce poor race results. Not the best base from which to start a successful team for the future.

And if one of these new minnows were to actually win a race/championship, given the glaring imbalance of the two-tier competition, what credibility would it have against the standing of the current teams anyway.

So it seems that by going along with Max’s low-ball offer the existing teams could effectively make it ultimately more unworkable than by trying to negotiate some sort of middle ground as suggested by some.


This is the biggest joke. The FIA will not exist without F1, and all this will do is push F1 apart. I hope the manufactures leave the sport and start their own series. Last time I checked they are the sport not the FIA. The FIA know if the top manufactures leave they get nothing, because who is going to follow F1 without Ferrari, Merc, BMW. I think even Frank Williams would hate this idea and he is a privateer. If all the teams agree to a set of rules, independents and manufactures why does the FIA interfere. They should let it things run its course.

This has turned me off F1 and it will have the same affect world wide. MAX and the FIA you’re the death of F1.


Incidentally, that last comment was really meant for the ‘Most Wins, Wins’ issue but the page appears to be too full to add another! Why do already fabulously wealthy and powerful old men always seem so intent on dictating how the world should be to the rest of us? I get so depressed by the my-parents-were-massively-privileged-and-I’m-profanely-rich-and-therefore-I-know-what’s-best for-the-rest-of-the-world attitude.


What will happen with the engine money??

The engines will be available for a max of 10/15mil per season to the smaller teams. Or atleast that’s what the deal was gonna be, I believe.

So What with the money teams recieve from these engines?
Can they add it to their budget? Because now more will they realise the customer teams can buy ‘cheap’ engines and they will have to invest part of their budget in research and might cost them more then what the teams pay for the customer engine!

See the problem? 🙂
Knowing how Max is, he knows he says you get very little to end up with a bit more, wich is what he projected first (as you mentioned in the article)


I’m not interested in sport- it’s for school boys. I’m not interested in cars- they’re vulgar. But I truly love Formula One. I found my love for it during the 2000 season and it has become a major passion ever since despite never being a Ferrari or Michael fan. I love F1 because it is complex, subtle and requires knowing in detail to truly appreciate. As with most things in the modern world it seems the people in charge are concerned only with appealing to the lowest common denominator- never mind the people that genuinely love a thing, the people that will tune in year on year regardless of whether they happen to share their nationality with a driver in a top-end car- let’s concern ourselves only with those people that might casually turn on the television on a Sunday for want of anything better to do. Let’s put the perceived preferences of the casual viewer above the interests of life long fans- that’s ‘Bernie-Business-Sense’… why worry about the long term when you’ll soon be dead and you need to secure some extra inheritance for your daughter to afford all those luxury yachts. Selfish old men with unjustified power = short-term strategies for short-term gain. Today is a shit day.


What I want to know is the answer to the *really* important question that nobody seems to be asking.

James – regular Rich Teas, or Rich Tea Fingers? McVitie’s or supermarket own brand? I think we ought to be told…


Maybe Mosely finally gone to far, I hope so, I hope this is just what pushes him out of the FIA. F1 is not a spectacle, it’s not a show or a business, it’s racing! All this ridiculousness from Max and Bernie and investors, etc. needs to go. Throw em all out, let Montezemolo run the show now, or some one with a brain atleast!


Glen D: I was not trying to medal in F1 – that was Bernie’s idea.
He also meddles sometimes.


Suppose the FA told the big four Premiership clubs, “because of your big budgets we’re going to limit your performance. You’re only allowed to field ten players”
Would the big clubs hang around to get stuffed by Portsmouth and Wigan, or would they go and play in some other league? Would that enhance the Premiership?
I assume the car manufacturers will do the same. They’re in F1 to promote their brand image. Getting stuffed by Prodrive and Force India is not going to do it.
What would the loss of the car manufacturers do to the F1 brand worth? Are as many people going to watch privateer teams race, rather than Mercedes race Ferrari and BMW?

If the F1 brand worth is devalued then the TV advertising breaks on the commercial channels won’t be as valuable, so then F1 broadcasting rights rates will fall ,bringing less income into F1, so Max will have to cut costs again to balance the books.
If Max is worried about the empty spaces at the back of the grid, then he should avoid creating spaces at the front.


Paul G
[Quote]The thought of the FIA attempting to balance these rules on a race-by-race basis sends shivers down my spine, as this would be tantamount to race fixing. Surely the FIA would never attempt to engineer race results would they?[/Quote]

Very funny Paul, no of course they would never dream of it. 😉
Ooh look! Was that a pig flying past?


You’ve got to admire Max. He has the might of some of the best brains and lawyers up against him, but he manages to tie them in knots every time. I wouldn’t like to play him at chess.

Of couse most of these things won’t happen or will happen in some diluted form; but he’s got them again. Just when it looked like FOTA was invincible, Max has got them pinned and out for the count. A masterclass in politics!!


It’s all wrong … the FIA, Max, the way they go about their business. This is clearly two fingers up to FOTA; the united front the teams are showing these days is clearly seen as a threat to MAx and Bernie’s authority.

Max Mosley has also stated publicly that he knows that someone involved in F1 was behind the set-up that exposed his private life. Until this particular subject is cleared, is it really acceptable that he runs the show this way??

Martin Hathaway

FOTA presents a set of proposals based on clear surveys. Bernie asks for response on his website, does NOT publish the response but pushes his plans through anyway. Perhaps its time for FOTA to reconsider setting up their own championship ~ that should make the money men sit up and reconsider!


Whilst I agree with the idea of some sort of budget cap, this must apply to all teams. We cannot have the situation whereby there are two sets of rules for competitors. The thought of the FIA attempting to balance these rules on a race-by-race basis sends shivers down my spine, as this would be tantamount to race fixing. Surely the FIA would never attempt to engineer race results would they?

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