The commentary has gotten rather blunt in Formula 1 now that the FIA are getting serious about a cost cap for the sport. As teams weight the reality of instituting a cost cap, the push back from top teams such as Red Bull, Ferrari and Mercedes has meandered from mildly concerned to outright defiance.
Today’s latest commentary comes from Red Bull owner Dietrich Mateschitz himself telling AUTOSPORT:
“To enforce a budget cap you have to clearly state what is included and what not – what about marketing, drivers’ salaries etc?” he said.
“And what if you are a manufacturer and can hide several expenses in other budgets?”
Dietrich is stating the most common themes or concerns over the cost cap and to sharpen the point, it’s often times more important to determine what isn’t included in an initiative than what is included.
When you weigh a balance sheet of a Formula 1 team, the assets are often present and tangible—infrastructure, materials, intellectual property, revenue, etc. The liabilities get a little more dodgy and less tangible. Time and employee grey matter spent on design, wind tunnel time, fabrication time, CFD time, R&D on new materials or aerodynamic designs and theories etc. How do we account for these functions?
To be perfectly blunt, and echoing Bernie Ecclestone’s comments, the recent 2014 regulation changes and new engine format have doen more damage to any potential cost capping in recent F1 history. Teams may have been spending a lot during the last set of regulations but the amount of money spent developing the new ERS, engine and chassis regulations is enormous. Mateschitz said:
“Given all the costs the manufacturers and teams had to take by the new engine formula, we spent close to a billion euros all together,” he said.
“Is there any questioning on this?
“And the windtunnel hours: we use an existing work tool that is already there, so what?
“These expenses are clearly less than those for new rules and engines.”
As a 4-time champion it is easy to dismiss Red Bull’s position as the have’s versus have not’s but if you consider the commentary and ascribe it to Williams, Marussia, Sauber or Lotus F1, you can still see the same concerns.
These teams are going to bear the brunt of the R&D costs of the ERS and engine development in expensive supplier contracts so the concept of this regulation change only impacting the teams who make the engines doesn’t hold water.
Red Bull doesn’t roll their own either. They are a customer team just like Williams F1 or Lotus F1. As to whether they are paying for their engines or not is a contractual element I am not privy to but suffice to say, they are paying for R&D regarding the power plant in some fashion. No team exists in a vacuum.
We’ve talked about the thought of a cost cap and how that might work but my hunch is the issue is a long way from settled if Dietrich is still offering this line of commentary on the matter. Could we see a heavy-handed move in 2014 by the FIA for a cost cap reform now that the regulatory body doesn’t need unanimous consent from all teams?