A new era on its way

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SpeedTurtle
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A new era on its way

Post by SpeedTurtle »

With the new budget cap, along with the rule changes coming into effect, I'm interested in people's views on the team pecking-order post 2022 and beyond.

I'm surprised that people are assuming that the current top teams will remain at the top when these new rules are put in place. Now this of course is possible, but I think it's just as likely that any number of other teams could prove dominant, or that there won't be a dominant team, with wins possible by many outfits.

Looking at current team budgets, there's basically a direct correlation of expenditure to finishing order. The top 3 teams are spending +$450 million p/year. Renault and McLaren are ~mid 200s. Everyone else is under $200 million, with Williams spending the least.

With the new cap at $145 million, the top 3 are going to require massive changes to their operating structures, including heavy staff and R&D reductions. The other teams are operating at or much closer to the new budget already. This gives them a significant advantage in that they have less adjustments to make and are experienced at running at near this budget currently.

So my question is, if everyone is spending the same, why would we assume the current leaders will remain so? Yes, the top teams have some of the best talent. Red Bull still has Adrian Newey, Mercedes still has Toto, but the other teams aren't comprised of dummies. Some of the greatest engineering minds in the world exist up and down the grid. Without the vast spending differences, I don't see why we'll maintain status quo.

The biggest concern would be Ferrari. They've been outspending everyone other than Mercedes, yet have not managed to win in over a decade. If they're no longer spending far more than the other teams, why would we expect them to remain in a dominant position?

I would expect teams like McLaren, Racing Point (Aston Martin) and Renault, to be in a great position going forward and why not some of the other teams?

This isn't meant to be a knock on anyone, I'm genuinely interested in knowing people's thoughts on this. I think we're looking at a complete unknown once the cap comes into full effect (which is obviously the main reason this was implemented), but the lower spending teams may even have an initial advantage.

Your thoughts?
Last edited by SpeedTurtle on Mon May 25, 2020 2:49 pm, edited 1 time in total.

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Randine
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Re: A new era on its way

Post by Randine »

The budget cap seems great on paper.
However it Will take many years for it to be effective.

The budgets of the big guys were tipped to be the biggest ever in 2020. Why?
They are bringing forward expenditure they would have normally incurred in later years.

Simulator upgrades, facilities, computer systems, warehouses, wind tunnels etc etc, all before the budget cap comes in.
Basically they are going to lock in a lasting advantage by having better equipment to work with for years to come.

It actually might make it harder for the smaller teams to close the gap. And probably makes it also very hard for new teams coming into F1.

I hope for closer racing, but I am not sure we will see it.
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funkymonkey
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Re: A new era on its way

Post by funkymonkey »

The budget cap is not going to change the pecking order suddenly.
Also a lot of the top teams have the best people working for them. They will find a way to retain the best minds in the sport regardless of the budget cap. Not to mention teams like Mercedes have huge R&D facility for their commercial arm. It will be very difficult to ensure the knowledge gained from there does not get used for the racing business. Material sciences have always played big role in F1. Mercedes and to some extent Ferrari and Renault can offload that expertise to their commercial car business. And it will be next to impossible to police that flow of information.
The same is the case with fuel, oils, lubricants etc. These top teams have rich sponsors who take care of those things from their pockets like the shell and Ferrari deal or Malaysian oil and gas company and Mercedes deal.
This budget cap might get us some new teams and will allow existing team to survive and maybe make midfield bit more interesting. but it will take huge miscalculation on the part of top 3 with the new rules for new player like Williams or Racing point to emerge as top dog even for a season.

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Jezza13
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Re: A new era on its way

Post by Jezza13 »

funkymonkey wrote:The budget cap is not going to change the pecking order suddenly.
Also a lot of the top teams have the best people working for them. They will find a way to retain the best minds in the sport regardless of the budget cap. Not to mention teams like Mercedes have huge R&D facility for their commercial arm. It will be very difficult to ensure the knowledge gained from there does not get used for the racing business. Material sciences have always played big role in F1. Mercedes and to some extent Ferrari and Renault can offload that expertise to their commercial car business. And it will be next to impossible to police that flow of information.
The same is the case with fuel, oils, lubricants etc. These top teams have rich sponsors who take care of those things from their pockets like the shell and Ferrari deal or Malaysian oil and gas company and Mercedes deal.
This budget cap might get us some new teams and will allow existing team to survive and maybe make midfield bit more interesting. but it will take huge miscalculation on the part of top 3 with the new rules for new player like Williams or Racing point to emerge as top dog even for a season.
This has been my concern all along with the budget cap that it'll only serve to ensure the midfield teams remain viable, not necessarily allow them to become competitive.

The cap covers infrastructure I believe so basically if you ain't got the latest & greatest in technology by the time the caps bought in then those that miss the boat might as well pack up & leave as they'd have nearly an impossible task of ever becoming competitive.

There's also the issue of tracking costs, especially when it comes to the manufacturer teams. Using Ferrari & their mooted entry into Indy cars as an example, what's to stop them setting up a state of the art factory in Charlotte N.C or wherever, or even right next door to the F1 factory in Marenello for that matter, spending a squillion dollars doing component R&D for the F1 team & then passing on the results for the F1 boys & gals to finish off for $10.50 + VAT or whatever the Italian & US equivalent is? Whats to stop Merc, Renault & to a lesser extent, possibly Alfa, McLaren & Aston Martin doing the same with their road car division?

Whats to stop RB & AT sharing R&D data & designing similar components effectively doubling their budget cap or halving their development costs. It's not like they've not shared data before. The same can be said of Ferrari & Alfa.

There has to be 1001 ways a F1 team, especially the manufacturer teams, can move money here & there to hide the true costs of R&D. I don't think there's ever been a sport that has introduced a spending cap of some type that hasn't seen it cheated eventually & almost all of them were a lot simpler to audit than the one proposed for F1. Am I right in saying that F1 is the only major motor sport competition to attempt to introduce a budget cap?

Another potential issue involving the cap is the tight development regulations. If the regs remain tight in regards to aero development under this budget cap then that'll probably be the worst of all possible outcomes for the sport. This can only lead to development stagnation and ensure that whatever the pecking order is at the start of 2022 then it's almost guaranteed that that's pretty much the way it'll stay until the next reg change.

I've been very skeptical from day 1 that this cap will have the effect of of closing any performance gap between the top & the midfield teams. The only way I can see this possibly doing the trick is for the aero regs to be opened right up so maybe some smart young designer in a midfield team might stumble on some ingenious concept that catapults them to the front of the grid. Other than that I think it'll be business as usual, just without the (visible) astronomical expense.

I will say this though, the one thing i'm expecting is that I really believe Renault will be there or there abouts come 2022. I know i'm pretty much alone thinking this but I firmly believe that Renault will make the jump & be real championship challengers under the new regs.
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j man
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Re: A new era on its way

Post by j man »

Under the current revenue model the midfield and tail end runners cannot afford the same level of engineering infrastructure that the big teams have anyway, so I don't see how the budget cap makes that situation worse. On the contrary, it will force the big teams to scale back their use of the facilities they currently have so there is still a net gain there. I would say that the big teams' competitive advantage will be much less "locked in" than it is at the moment.

Effective policing of the budget cap has been a known concern from day 1 and is something I'm sure that Liberty have thought very carefully about. They have warned of very severe punishment for any teams found to be circumventing the rules and I can only hope that the teams come to the conclusion that consequences of being caught do not justify the risk. Many of these sorts of instances of cheating across the sporting world are found out sooner or later.
Whats to stop RB & AT sharing R&D data & designing similar components effectively doubling their budget cap or halving their development costs. It's not like they've not shared data before. The same can be said of Ferrari & Alfa.
On this point, I would genuinely question why this sort of thing should be treated any differently to the McLaren/Ferrari spying scandal in 2007. Of course from the perspective of the teams involved the data is being shared by consent which makes it an entirely different situation, but from a sporting point of view they are supposed to be independent teams competing with each other so they should not be in possession of each others' data, whether consensually or not. One of the improvements I'm hoping will come about from this new era is the end of the conflicts of interest we see arising from this sort of "customer" and "supplier" arrangement between teams who are supposed to be in competition. Longer term Liberty have to look at banning the same parent company from owning more than one team, although before that can be done the sport has to be made more accessible and attractive to new entrants or we'd lose the likes of Alpha Tauri and Alfa Romeo without anyone to replace them.

I agree with the posts above that the budget cap is not going to fix everything overnight and the overall pecking order will probably stay largely the same, but I do see it as an important step forward towards improving the sport's competitive landscape, which ultimately is what Liberty seem to be striving for.

mikeyg123
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Re: A new era on its way

Post by mikeyg123 »

Every major rule change in recent times has resulted in a big shake up of the order. 2014 Mercedes came from the midfield to be dominant and Williams came from the back to be second best, 2009 Honda came from nowhere as did Red Bull.

However, we have never had the order as set in stone before now. Lets see. I'm hopefully at least one different team is able to fight for wins in 2022.

SpeedTurtle
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Re: A new era on its way

Post by SpeedTurtle »

The policing of the budget cap is for sure going to be the biggest challenge, but as j man mentioned, this has been known from day 1 and will be a priority. If the penalties for breaking the cap are severe enough, teams are going to think twice about it as it wouldn't just be a sporting punishment for them, but also a major negative reputation-wise (for manufacturers being proven as cheats is a bad business look).

Regarding equipment (wind tunnels, sims etc), I'm not sure if that's even included in the cap (?). Teams may still be able to upgrade their facilities, I'm not sure. Let's be honest though, is there anything equipment-wise that a Mercedes, Ferrari or Red Bull are currently lacking? I'm sure they've already got the best of the best.

Could teams hide costs in their road-car divisions? Potentially. With that said though, 6 of the 10 teams are road-car manufacturers, so most could do it. This gets back to the penalties; they need to be severe enough to dissuade teams from doing it.

If a team does come in ahead of others in 2022, the limit on spending might restrict the ability for other teams to catch up, but it also limits the dominant team from spending vast amounts to maintain that advantage. I think that potential issue balances itself out.

Ultimately the budget cap is not in and of itself going to solve all problems, however it's a major piece. Throughout F1's history dominance has always been temporary. There's no reason why that won't continue and my feeling is the budget cap could be a major catalyst of that.

WHoff78
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Re: A new era on its way

Post by WHoff78 »

Expected there to be a little more buzz around the aero handicaps that almost seem like they have been snuck in with the budget caps. Seems kind of a big deal.

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Flash2k11
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Re: A new era on its way

Post by Flash2k11 »

WHoff78 wrote:Expected there to be a little more buzz around the aero handicaps that almost seem like they have been snuck in with the budget caps. Seems kind of a big deal.
I think it'll take a few years of the trickle effect before it really makes a massive difference to the outright order of the teams but I imagine it'll close the gap up between the very front and the very back. You can give a backmarker all the aero dev time in the world if you want, wont make a difference if their engineers cant use the time efficiently/go down a wrong path developmentally.
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mikeyg123
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Re: A new era on its way

Post by mikeyg123 »

Flash2k11 wrote:
WHoff78 wrote:Expected there to be a little more buzz around the aero handicaps that almost seem like they have been snuck in with the budget caps. Seems kind of a big deal.
I think it'll take a few years of the trickle effect before it really makes a massive difference to the outright order of the teams but I imagine it'll close the gap up between the very front and the very back. You can give a backmarker all the aero dev time in the world if you want, wont make a difference if their engineers cant use the time efficiently/go down a wrong path developmentally.
I'm actually really optimistic about the changes but you're right. I think we are looking at a number of years before they make a real difference. I think having some negative feedback loops in F1 is the way forward and this seems like a fair way of doing that. The slow team is automatically made faster they still have to get things right, it just increases there chances to do that.

I also hope in time the budget cap makes F1 more appealing to viable teams and we can fill the grid up again.

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