Budget class causes F1 turmoil

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F1 teams voluntarily running to a budget cap of £30 million in 2010 will be handed competitive advantages which will enable them to run at the same pace as existing teams. The plans, announced by the FIA without consultation with the Formula One Teams Association, have sent shockwaves through the sport.

Max Mosley has lobbied for a budget cap in the past, but having been unable to make it work he has effectively introduced one by stealth. His aim is to attract two new teams to fill the unused 11th and 12th spots on the grid by 2010. He has also left the door open for further teams to be accepted, if the current limit of 12 can be extended.

The news comes at the right time for Peter Windsor and Ken Anderson, who have announced plans to set up an American team in Charlotte under the name of US Grand Prix Engineering.

What makes this initiative different from previous efforts to help ‘poor’ teams is that anyone running to the cost cap will be able to use an unfrozen engine with no rev limit and no limits on development – provided that any work is included within the £30m. There will be a standard floor and diffuser that offers extra downforce, and the right to use moveable wings in addition to the adjustable front flap currently available to everyone. Mosley says the FIA will be able to adjust this equivalency formula as it wishes.

“There is no reason why cost-capped teams could not win races,” said the FIA president. “The massive and highly organised unlimited-expenditure teams are perhaps likely to do a better job of going racing. They will have the most expensive race engineers and tacticians, not to mention the top-earning drivers. However, racing is [and should be] unpredictable.”

The £30m cost cap, which Bernie Ecclestone has already admitted is too low, will include all costs associated with running a team, such as driver salaries, but curiously does not include the motorhome. Mosley is adamant that the FIA will be able to monitor costs effectively, that teams will not be able to hide any expenditure, and that any outside help will have to be budgeted for. Critics suggest the reality of running a team is far more complex and question what will happen if a financial irregularity is discovered long after the season has finished.

Mosley added that teams can take driver and key employee salaries out of the equation by in effect making them stakeholders who share in any profit on top of the £30m budget.

Ecclestone’s support is demonstrated by the guarantee of $10m of FOM funds – just over £7m – to the 11th and 12th teams. This in effect means they will get nearly a quarter of their budgets just by turning up. Allowing for sponsorship and additional FOM income, making a profit is not out of the question. Indeed even 10th place in the World Championship is currently worth nearly £30m.

Mosley has made it clear that existing teams are welcome to switch to the budget class, should they so desire. Clearly his message is aimed at the CEOs and main boards of the manufacturers, who will surely now question why they should spend so much to run at the same speed as budget-capped teams.

However, scaling down a works team to that degree is a near impossible task, at least in the short term. Even tiny Force India currently spends well over £40m in basic operating costs and its salary bill alone is around half the £30m cap.

A major question mark surrounds potential sources of engines. Existing manufacturers are unlikely to be willing to make an unfrozen, unlimited version of their engine available to customers at a token cost. The only realistic alternative appears to be Cosworth, which raced its V8 for a single season with Williams in 2006. Last year it was named by the FIA as a potential official source of cheap engines, along with gearbox supplier Xtrac.

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