The Budget Cap

I hate this idea of a budget cap. I really do. Maybe because it radically changes the face of grand prix racing and I hate the idea of racing changing even further because of Max and cohorts. Perhaps I hate the fact that to my mind, its just a deceitful way arguing that the teams should not need to receive more money from Bernie and the CVC dogs. Maybe I hate the fact that Max argues there are is no technical innovation in grand prix racing and yet it was he who framed the current rules so tightly that innovation is not permitted. There are even provisions in the sporting regulations that state that any innovative advantage a team has will be removed after a year! Yeah, perhaps I just hate the disingenuousness of it all and I really want to see the end of Max, FOM and CVC.

Putting all these other bigger issues aside, I do wonder whether the budget cap in and of itself is such a bad idea. I have to agree with Mosley on one thing. If applied, it is at least ensures fairness (though I think fairness can also be achieved by other means). But whatever, on the face of things, those folk from Norfolk who want to revive the Lotus name, could theoretically be fighting on the same terms as Maranello. If you ask me, I think Maranello is afraid of this. For if everyone is on equal footing, then its down to creativity (if this is allowed as well, but I'll come to this later). Time was when Ferrari were getting beaten by so-called garagistes using only Cosworth DFV engines and old Enzo hated that. And so would Luca di Montezemolo. Ferrari builds its brand on grand prix mystique and here's a chance that the myth would be destroyed. Not good. And I would say it also applies to a lesser extent but still significantly to other car manufacturers in Formula 1.

However, we should not let ourselves get carried away. As I said before, this is only in theory. Whilst a budget cap allied to greater innovative freedom seems like a great idea here are some reasons why it would not work in the long run.

Budget caps are impossible to police

Seriously, do the teams or anyone for that fact want a bunch of FIA people to rummage through their books? And even if they were allowed, so what? Auditors have been rummaging through people's finances for ages but still you had things like Enron happening. Sarbanes Oxley? Pffft. Such regulations simply creates more loopholes for hanky panky.

When they implemented currency exchange controls, banks simply created currency swaps and derivatives on those. When it comes to money, there are very creative ways of ensuring that it gets where it needs to go and of course there are creative accounting techniques that have been practiced for hundreds of years.

Whats to stop Mercedes for instance to place their CFD and wind tunnels under Mercedes trucks or AMG for instance? In return, Mercedes High Performance Engines could do some "research" work for those divisions. After all engine expenses are spared from the scrutiny of the FIA. Whats to stop Mercedes HPE from transferring the results of such CFD and wind tunnel work back to McLaren? Nothing would stop McLaren from claiming that they innovated and "discovered" this all on a miniscule budget because of the genius of their engineers. Are the FIA going to send auditors to the entire Daimler Benz empire?

Likewise, are the FIA going to send auditors down to Nissan in Japan to investigate possible Formula 1 chassis work? In fact, whats to stop Nissan doing it out in the open? If Nissan wanted to build a grand prix car simply for pure research purposes, there would nothing the FIA could do to stop them. Nissan are not competing. Its the Renault Formula 1 team that does so. And if Renault "inherits" or is simply allowed to "view" the results of Nissan's research, does this in and of itself constitute a breach of regulations?

Both McLaren and Ferrari have road car divisions separate from their teams. In the case of McLaren this goes even further to encompass other vehicle and technological enterprises. There's no stopping either of these teams parking grand prix development expenditures to these other operations.

Such things are not confined only to the large manufacturers. Any team can practice such creativity. Lola for instance builds racing cars for other formulae and series. Who's to say what expenses are incurred for the grand prix team and what expenses are attributed to development of chassis in other formulae? Only Lola's accountants know and you can bet they ain't saying. Other teams could also set up similar situations very easily. They could for instance sell engineering services to other entities and organisations for non-financial consideration.

I'm certain the FIA will look into all of this. Max is quite a clever bastard. But he should know that budget caps will exist only in name. Teams will find even cleverer ways to cicumvent these caps. In the end, I feel that the so called cap will simply be abandoned, the way horsepower limits (300 bhp) were abandoned in rallying.

Technical Innovation Causes Safety Issues As Cars Get Ever Faster

As I said before, the only reason why there have not been any innovations in grand prix racing lately is because the regulations are framed in such ways as to prevent these innovations from happening. Max has long argued that this is for cost and safety reasons. History will show that the cost savings never materialised much. But Max could always count on safety as the reasons for killing off technical creativity. He would argue (and he would be right) that the cars would be going too fast for their own good.

As it stands, despite ever tightening regulations, engineers have found ways of making the cars go even faster. Any limits placed on them have been temporary. Eventually development catches up and cars go even quicker than ever. I suppose the FIA can argue this is possible because of the hundreds of millions that go into 24 hour development. And so they want to place this budget cap. In exchange teams get more liberal regulations.

However, if Max is correct, that with such freedoms, engineers and teams would not need the close on half a billion dollar budget to go faster, then in the end, the FIA would still need to curb their creativity and thus the speed of the cars for safety reasons. How are the FIA going to achieve this? Tighter budget caps? Would it still be considered grand prix racing when teams are limited to only say 5 million dollars or less per season? That would just be ridiculous. Sports car teams spend more. The only practical way would be for the FIA to write ever tighter technical regulations and all this will do is curb creativity. Once again, whatever monies are available would simply be spent refining existing technology rather than producing new ones.

Lack of Rule Stability Will Raise Costs Anyway

Lets face it. One of the reasons why budgets in Formula 1 have gone sky high is because bloody Max has changed the rules according to his whims every couple of years. In some cases, he's changed it year on year. Such rule instability forces teams to deploy massive amounts of financial resources for development. Now who's to say that if Max gets his way and teams sign up unconditionally, he would settle down and stabilize the rules. Especially given safety concerns. He'd keep on changing the rules and I argue that even the little teams will be complaining. What would happen I feel is that teams would argue that the budget cap be relaxed in order to properly respond to these rule changes. And there goes the farm on budget capping.

Conclusions

I believe the FOTA teams are looking to make massive cost reductions to their operations. And I believe they are in a better position to suggest more practical and economical ways on how these can be achieved. For this to happen in the long run, there must be rule stability. And this is the thrust of the FOTA argument. That rules are managed and constructed in consultation with the teams and not simply on the whims and fancies of an ego-maniacal FIA president.

If you ask me, I don't think the FOTA teams are worried about these budget caps, or at least they shouldn't be. Better spend their time in finding not only new technical innovations but also financial innovations and creative organisational and commercial structures to circumvent such nonsense. Who's to say that they aren't doing this right now?

However, as the loud mouthed Flavio has recently said, what FOTA requires is transparency and rule stability. This is an essential ingredient to cost savings and is something that Max doesnt seem to understand or realise. And if those traitors Williams and the oh so wannabe Vijay Mallya and his Force India team had the foresight they would see that unconditional surrender to Max will in the end be folly and detrimental to them in the long run. I argue that all these hopeful new entrants should also place stability and transparency conditions not just on the FIA but also the FOM on whom their lives will depend on.
I am surprised that Williams, Force India and others seemingly take such a short term view of things. In the long run, they will be back on the table arguing against the FIA once more.

As for Max, it would seem that here is a man who wants and needs to be in complete control and be able to dictate the regulations as he pleases. I do believe though that a lot of the motivation for it is commercial and even political. Commercial pressures come from Bernie and the CVC dogs. Political pressure would perhaps come from environmental lobbies and governments. To satifsfy these pressures, I think he doesn't at all mind to be seen as the ruthless dictator and perhaps he even enjoys it. In the end I feel that he simply wants to satisfy his ego as being the man who changed and "saved" grand prix racing. There cannot be any doubt that he himself is engaging in legacy building.

And so the practical way forward is to perhaps to let Max be seen in public as the victor in this standoff. After all, car manufacturers and teams are in different businesses and not in the business of politics. FOTA should perhaps capitulate and be seen to have been humbled by the great dicatator, Premier Max. Then, work with Bernie to come up with a new Concorde Agreement that this time guarantees rule stability. I'm not sure how they would get more money out of Bernie and CVC but thats a different story. In the meantime as I mentioned FOTA teams can simply restructure their organisations to circumvent these silly budget caps. In the long run they should realise that budget caps will (in substance but not form) disappear anyway. And all that would remain (if they played it smart) is rule stability guaranteed by a new Concorde Agreement.

The Battle Lines Are Drawn

To the press Max Mosley has made known that there will be no compromises. And for good measure he has reminded the FOTA teams as to just who has been setting the rules for the last 60 years. And if they don't like it, they can eat shit and start their own championship. Well that would be interesting. Personally I'd prefer to that they did. What better way to rid themselves of cancerous CVC and corrupt dictatorships? But somehow I have a feeling this isn't going to happen.

What I do think will happen is that we'll have like Brawn and Force India getting really nervous and caving to Max pressure. I reckon even Red Bull and their two teams will follow. This leaves the five manufacturers Toyota, BMW, Mercedes (via McLaren), Renault and Ferrari. Rumour has it Renault and Toyota want out if given the chance. So this leaves BMW, Mercedes and Ferrari. Of these, only Ferrari have been extremely hardcore.

Some have suggested that the remaining 5 manufacturers run 4 car teams to make a 20 car grid in a new championship. Sure why not? Or how about allowing customer cars and allowing private entrants to purchase their cars, perhaps with the condition that the customer cars be co-identified with the manufacturer. As I have said numerous times, Red Bull has proven that the concept can work. And perhaps Red Bull can persuaded that a new championship is a good idea and that they should put all 4 Red Bull Technologies racing cars in there.

In prosperous economic conditions, I would say a new FOTA run championship would have a better than even chance of succeeding. But the reality of it is that in these turbulent times, they will not have the collective will to do so. And that would be the end of FOTA. The members will either cave in to Max or they will leave the sport. The only question is which option will Ferrari choose? I doubt if Luca would want to lose face over this affair but what are his choices? Ferrari have signed up with the FOM to 2012. If they leave now, they are facing a massive lawsuit from the likes of the dogs, Bernie and CVC. Could they afford to do so? Profitable as Ferrari are, it would be in their best interests to do so. Luca may just have to eat humble pie over this entire affair.

The rest have not gone to such lengths as Ferrari and therefore caving in to Max will not be such a loathsome option. For those manufacturers that choose to remain, you can be assured there will be reconciliatory gestures all round. Lots of back slapping and all that with Max and Bernie.

So for those that sign up to the FIA championship what would be their future? More of the same. Whilst teams want rule stability and governance transparency, they will have neither of this. And faced with this budget cap, they will wonder how to respond to Max when he keeps changing the rules ever so often to his own whims and fancies. Some people never learn the lessons of history and this folly will continue on.

In short, I'd love to see a new championship but I seriously doubt if this is going to happen. Nice try FOTA.

PS: Please prove me wrong

More On KERS

From this article by the UK's Guardian:

"'It's nonsense,' said one team engineer. 'We're saving costs with the engines - which is fine. But some of the larger teams are reputedly spending $70m [£35.5m] on Kers in the hope that they will find a performance advantage. It means even the smallest teams have to look at spending between $5m-10m they don't have. One of the Kers systems uses batteries to store the energy. They cost £150,000 and would need to be thrown away after each race. Where's the sense in that? But we're stuck with it for as long as Mosley is in charge.'"

And we're trying to save costs right Max?

Strangely Familiar

So Max won the vote. Well I guess most of us expected such a thing despite many, many reasons (aside from dubious sex charges) to get rid of him. But whats interesting is the way he won. The big clubs that make up the membership of the FIA include the Amercian Autombile Association and the German auto club ADAC. The few big clubs together represent that vast majority of motorists (and presumably motorsport participants). And yet, each of these clubs get just one vote, the same as any other affiliate however tiny these are.

This of course led Bernie to a snipe at African clubs sending votes Max's way which has angered the African clubs. Well, the Africans can protest all they want but it still rings true. The smaller clubs (African or otherwise) need the FIA (or specifically Max) to send good things their way. Some of course, are hoping to receive or keep their grands prix and other motorsport and motoring events. And guess who they voted for?

All this sounds oddly like a certain presidential election eight years ago where because of the collegiate system caused the guy who got the majority of popular votes to lose and instead a complete moron and his cronies took charge of the world's most powerful armed forces to deadly consequences for 600,000 people (including his own) in the Middle East. All of course on some incredibly spurious reason that all of the rest of the world doubted but was sold and bought wholesale through the media by the moron's charges. So much for championing democracy. Its full of shit. I of course digress here but I just had to put that in.

As for what happens now to motor racing in all forms is anyone's guess.

KERS Is Bullshit

By many accounts, KERS is primitive. And yet Herr Max is pushing as if it was the second coming. To me its just bullshit window dressing and the sad fact is many are buying into the hype.

The idea is that all energy spent under braking will be stored and released into electrical propulsion at the touch of a button. Limits will be placed of course and the use of this power boost will be restricted to once every lap. Quite how they will control this per lap I am none too sure.

Power boosts are nothing new. We have all seen it in Indycars and A1GP. However, as both these series have demonstrated its use by a driver wishing to overtake can simply be countered by the other driver defending the line by activating his own power boost. The sum total benefit of it amounts to bugger all. In fact, KERS is projected to release up to 10% more power to the wheels. So if we conjecture that the modern V8 produces 750 bhp, this releases around 75 bhp. Fat lot of good this will do. At Monaco for instance it bloody well makes no difference. And the same goes for a great majority of circuits as well. So much for the actual racing.

How about its possible contribution to road relevance? Luca Marmorini of Toyota, the makers of the best selling Prius hybrid, has flat out stated that it is a primitive device. One would imagine the Prius has far more sophisticated energy recovery systems. So you can chuck that in the bin. And as I have said many times, Formula 1 should be the pinnacle of racing technology. Let the boffins in the car labs handle the saving of the world.

Quite recently Max had said, in a letter to the FIA detailing why he should be allowed to stay on as FIA president, that costs in Formula 1 are skyrocketing. Well, does he really believe that the introduction of this technology will bring it down further? Thats even more bullshit. It surely will send costs flying even higher. The introduction of any new regulation and associated technology or technological development has a habit of doing this. Quite how one can believe Mosley's dream of containing costs is beyond me.

The only logical reason for having this technology introduced into Formula 1 is to create the illusion, the perception that the manufacturers and the sport cares about green issues, whilst the implementation itself does nothing for it. And why should a sport that has dedicated itself to being the pinnacle of the art and science of going fast care about these things? After all the teams care about only one thing. Winning. The rest is just total crap waste of time.

With enough press releases and press conferences with Max Mosley doing his level best to persuade the "casual fan" of its benefits, maybe these fools will start to believe it. And you know what? They probably will.

When all is said and done the manufacturers do care about the illusion if it helps them sells cars. And here it is, isn't it? The sport subsumed to the needs of the big manufacturers. And to one power mad prick who is all out to win glory for himself for supposedly doing the "right thing."

Intellectual Property

What a season its been and whilst the curtains should have come down at the end of the Brazilian Grand Prix, we shall have to wait one more week before the FIA confirm Kimi's world championship. Even so, many matters that have arisen during the course of the 2007 season remain unresolved.

You know what I'm talking about. This whole spying issue. That which has left a very sour taste in every fans mouth, no matter which side you take. Its funny to hear people calling McLaren a bunch of cheats because as far as even the FIA can conclude, their car was legal, in the sense that no evidence could be found that Ferrari's intellectual property had been utilised in the 2007 McLaren. What got McLaren the USD 100 million penalty was the fact that certain employees received unauthorised information. The term "spying" is an incorrect one. The fact is, no McLaren employee went into Ferrari to obtain any information. It was a disgruntled Ferrari employee that distributed the dossiers.

What goes around comes around. In 2003, Ferrari (and Bridgestone) alleged that the Michelin tyres were illegal. They were not of course for they complied with the letter of the law. However, the FIA took Ferrari's advice and decided to change the way the tyre width was measured. This of course happened during the course of the season. And of course, Ferrari gets what they want and so Michelin had to produce another tyre that complied to the new measuring methods.

And so in 2007, McLaren, armed with Ferrari's technical information helpfully alerted the FIA that their fancy flexi-bottoms were not in compliance with the regulations. The FIA realised that their measurement methods were inadequate to detect flexible floors and therefore again, mid-season decided to devise new methods of measurement. At the very least the FIA were being fair in this case. The Michelin shod teams were not penalised for their supposedly illegal tyres in 2003 and therefore why should Ferrari be penalised for circumventing the flexible floor ruling?

But whereas the Michelin shod teams back then did not retaliate against Ferrari or Bridgestone (they simply have too much class for it), Maranello's retribution this year was terrible. Again, I state that there is no evidence that McLaren utilised any very intellectual property in their 2007 racing car. The FIA cannot prove this, so why the hell is Luca di Montezemolo talking a whole load of rubbish about there being a lot of Ferrari in the McLaren? In any case and as you know, a great undertaking or witch-hunt as Sir Jackie Stewart called it, was launched against McLaren. And yes, Ferrari got its way. Of course not in full for the drivers remain unpenalised. But I suppose, only because one guy ratted on the team to the FIA and Bernie wanted the other guy to win the championship instead of Kimi because that other fella was orders of magnitude more promote-able.

But I suppose to please his Maranello lovers, Max Mosley now wants to hunt for more than evidence of stolen intellectual property, he wants to hunt for Ferrari "ideas." See, this is what happens when you put a fucking lawyer in charge of racing activities. Quite how he proposes to define "ideas" is beyond me but I would imagine that definition would be far more convoluted but yet vague as the 2007 technical and sporting regulations.

In fact this whole notion of intellectual property stinks. The first time I read something about intellectual property in racing had something to do with the British Touring Car Championship. I cannot now remember the details (and am too lazy to research this right now) but I remember something about the MG racing car could not be taken over by one team because the intellectual property belonged to another. Crikey!

Now, even entire racing series are subject to intellectual property legalities. Say for instance, I want to start my own racing series. I want it to be a one make single seater series, with two races per weekend and two qualifying sessions. The second race start is to have a reverse grid. Sounds familiar? Of course it does because thats how the WTCC, BTCC and even GP2 is run. But if I wanted to do a series like this, I would have to compensate the originator of this format i.e. dish out money to the guys who first invented the format. Of course, the cost of my new series is going to go up. But it all just sounds so silly.

As I said, this is what happens when you have a lawyer in charge of the FIA. And of course, this is what happens when racing becomes first and foremost a business rather than a sport. There's just too much crap that comes in the picture.

Today I read that Bernie has called a crisis meeting among all the other teams save Ferrari, McLaren and Renault who are already embroiled in cases. He wants to root out cases of intellectual property theft. Yes, I'm quite certain that there would be plenty of those that go on everywhere.

But guess who is safe from this intellectual property theft witch hunt? Ferrari of course, whose overlords have done a damned fine job of portraying itself as the sweet innocent injured party. I'm quite certain Nigel Stepney is correct. There are plenty of bones in and around Maranello. But no one shall be investigating them.

And this whole notion of taking it one step further, to look for "ideas" is complete bollocks. Asides from the precariousness of defining the term and eventually enforcing it fairly, it would lead to ridicule. Take for example the Tyrell invention of the raised nose in 1990. It was copied by every other team thereafter in various guises and is standard on all Formula 1 cars today. You could say then that every other team copied the "idea" of the raised nose and if you leave it to that idiot Max Mosley they should all be penalised for this. Furthermore, the entire sport would not have progressed technically along with it. Well, fuck Max Mosley and his legal mumbo jumbo.

Now, its Renault's turn to face "spying" charges and isn't karma sweet? For it was that overaged gigolo who kept harping on about penalising McLaren to the ground. Well, prepare to take your own medicine playboy! And the FIA must, since precedent has been set, they must apply the same penalties to Renault as they did on to McLaren. If they did not, then I think the only recourse is for McLaren to take this matter to court. And I mean a court of justice not the kangaroo variety set up by Max Mosley and cohorts.

And since we are all witch hunting the other teams, in the interest of fairness why not send a team to Maranello as well? Well, we all want to be fair don't we? Has Maranello got anything to hide? Lets see it then. Oh, and lets not just look for intellectual property infringements. Lets see if Maranello has stolen any "ideas."

I rejoiced when Kimi Raikkonen won in Brazil and became world champion. To me, he was the best driver this season. He overcame the challenge of a new team, car and tyres and stuck it good to his moronic teammate and Hamil-shit. 6 races won this season, he truly deserved it. (I just wish it wasn't with such an unsporting team). But it seems that his achievements have been completely overshadowed by these silly legal issues. Formula 1 as it is today, should be flushed down the toilet. If you aren't sick of it, you should be.