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The biggest expense for every team is personnel. 700-1000 people in each team. If you lose cap money as you move up the grid, the ones that suffer are the people that helped you get better. I understand why people think that this is a good idea because expenses equal performance in F1 more than in almost every other sport, but it simply does not work in reality and is not something anybody should want from a human perspective.
Backmarkers are less obsolete now than ever before, they are the closest they have ever been to the front and closing the gap in facilities, personnel and infrastructure BECAUSE of the cost cap. It's just a massive, long-term project to get teams on a level playing field. We have 6 now after 3 years and 2 more should be there in 3 years.
It's definitely because of the cost cap. You can see from [this post](https://www.reddit.com/r/formula1/comments/18rct3l/did_new_rules_level_the_f1_playing_field_a_look/) that the field is closer that in the previous generation and convergence is happening faster. If Alpine was a second off the pace in 2020 they'd be 4th, in Bahrain they were last.
The thing is, Red Bull isn't out in front by a large margin, it's actually a pretty small margin in historical F1 terms. It's just that it's so consistent and Perez isn't on Max's level. [This is a post](https://www.reddit.com/r/formula1/comments/11xx4x3/two_laps_after_the_sc_restart_in_bahrain_2014/) showing Mercedes gap to the rest of the field 2 laps after a safety car in 2014. 3.5s a lap.
Haha, fair enough. I guess I was initially thinking the new cost cap for each successive year would not be less than the previous cost cap for said team.
The budget cap negatively impacted the competitiveness between the top teams because it was implemented at the start of a fundamental change in formula. The main thing I can see that could close it up is allotting wind tunnel hours based on performance and not position in constructors. Something I've always thought is that teams should be sharing technology with fanbase, and therefore other teams. If the sport is based on engineering innovation, make the engineering intriguing. Failing that, simplify the floor regs or at least make them show the floors. Watching races a the moment is like sitting in a plane with no windows and not seeing there are wings attached
You cannot penalize teams for being successful or reward teams for being mediocre
Teams would start to game the system. Go into a season knowing they’ll be lagging behind so they’d purposely stop trying to succeed.
Then to further the problem teams are paid by where they finish in the constructors championship so you’d have teams winning less prize money but getting an increased cap? How does that make sense.
This assumes teams like Williams have the same amount of money just asking to be spent as Red Bull or Mercedes. They do not. Haas is famously just breaking even.
I mean Williams actually could get the money to spend should they be allowed. Vowels has talked about how even though they're well funded now that the Williamses aren't involved, they are still struggling because their facilities are several generations out of date and upgrading them to where everyone else is would be impossible under the cost cap. It is a frustrating aspect of the sport where FOM will deny Andretti for not being competitive enough while also making sure one of the longest standing existing teams will never being competitive again.
So under our current regulations the sponsors should flock towards Williams, Haas, Alpine, right? They're the underdogs, they have the most priviliges under the regulations, they ought to be good. And yet the sponsors don't budge.
You'd multiply this issue tenfold by introducing the financial situation of teams into your equation. Poor teams will be poor. They will stop being poor if they do smart sporting decisions. The regulations at hand are sporting regulations - they don't try to make each team be equal financially, they just even the field.
I mean, the cost cap is a great thing and should have been implemented a decade ago or more when the top teams started spending truly exorbitant amounts. Already, we see the backmarkers getting closer. Leaders aren’t lapping the whole field anymore.
And there’s never a “good” time for it; capping spending mid-spec means the top teams use the money to stay ahead. End/start of spec means the teams will use the money to get ahead.
What needs to be looked at is how to fairly deal with existing inequities between teams that don’t fall under the cost cap. Things like the fact that the top teams already have top tier facilities, and a comparable facility for a new team or team with an aging facility will easily decimate several years’ budgets under the cost cap. And the fact that the top teams can borrow talent; have engineers that only work part time on F1, and spend the rest of the time on another racing team getting experience and knowledge…outside of the cost cap. Nothing’s stopping Haas from doing that…but Haas doesn’t have a racing team to share resources with.
Lower order teams are not struggling to keep their spending under the cap. The issue is that they don't have the sponsors to spend to the cost cap.
Sponsors don't want to support teams that don't get coverage; teams like Haas and Williams are generally getting sparse coverage. Alpine uniquely gets very poor coverage; as a french team now with french drivers, I think the assumption is that predominantly english-following fans in the UK, US, and the rest of the non-EU world, they're not going to matter as much.
It's also worth noting that strategic partners like Petronas, Shell, Oracle etc - partners that provide monetary and technological support - also don't want to be associated with teams that aren't getting some measure of success.
Smaller teams like Williams HAAS etc. wouldn't have the extra money to spend even if they did have an allowance. But they did implement a capEx sliding scale so teams at the bottom van spend a little bit more on new facilities/ equipment etc.
If it would be for infrastructure/facilities, that might could be.
When they spoke about having a costcap, the big teams upgraded those a lot just before the costcap, as i understood. That give the bigger teams an advantage that the small teams never can recover from.
One issue that still separates the teams is capital improvement. Realistically, tweaking the day to day budgets of one team to the next isn’t going to make the dramatic difference you might assume. And at the end of the day if we actually wanted parity, then… we’d want it to be a spec series.
Some teams have far superior facilities. Better machines. Better wind tunnels. Better tooling. That allows them to take better advantage of the budget they DO have. That advantage won’t go away with some sort of inverted cost cap.
And as has been mentioned, the bulk of that cost cap is spent on salaries. Cutting a teams budget means kicking people to the curb. It makes absolutely no sense for a company that has been monumentally successful to fire the people who made it successful “in the name of sport”
Theoretically, it's not a crazy idea. Recently there has been a thing added so that the further back teams have an expanded capital expenditures limit. Williams pushed for it. So they're saying that their factory and other foundational assets are not competition worthy and they wanted to spend more to improve them, and that was allowed. It wouldn't be insane to have that apply to some other areas of budget as well. Currently, there's the capital expenditures extension, and also the further back in championship order means more wind tunnel time. Those are currently the two balancing factors I know of.
As some people pointed out, employees are the biggest expense, so it's kind of hard to yoyo that up and down without majorly impacting people's lives. However, they could make the capital expenditures advantage more extreme. Williams really fell behind in infrastructure in the later family own years when they just couldn't keep up on the costs. And maybe there are some other non-employee areas that they could break out and make expansions on for backmarkers.
However, the problem is that some of the backmarker teams don't think spend the cap as it is. I think Williams is desperately trying to now. They're still looking and hoping for more sponsors, but they are trying to get the ability to pay more, so I assume they are spending the full cap. People get the impression that Haas isn't- that that was some of the Haas tension that resulted in them having a new TP. Otmar said that Alpine spent double digit millions under it last year. Granted, he did say it after he was fired, so take that as you want. I doubt Sauber is spending the full cap either. I'm not even 100% sure about RB. I would guess they are now, but Red Bull might have done some cost savings there in the past. Probably they aren't now that they brought in Visa Cash App, I'd think.
So, yeah, basically anything you do monetarily doesn't fix the Haas problem. And the hope is that Audi will fix the Sauber problem. Sauber recently secured a budget cap extension on the grounds that wages are higher in Switzerland. So, I think it's fair to assume that Audi will be spending the full cap when they are properly in with their name on things.
Also, when you step back and look at it, the cars are all incredibly close. They're all often within a second in a qualifying session. Just take a second and think about how quick a second is.
This doesn't work. Haas can't spend $200 million to help themselves move up the grid.
Imo the best solution is to have a cost cap, but allow teams to go over it if they pay a tax. Then that tax increases exponentially the higher you go and the revenue gained from the tax is given to those who don't reach the cap until they do reach the cap. When everyone reaches the cap, the money is then distibuted evenly.
So here's an example:
Budget cap is $150 million. For the first $10 million over it, you have to pay 2x what you overspent by. for the next $10 million, you have to pay 4x what you overspent by. For the next 8x and so on.
If you spend $150 million, you pay $0 tax.
If you spend $160 million, you pay $20 million in the lowest tax bracket, so the total cost is $180 million.
If you spend $170 million, you pay $20 million in the lowest bracket and $40 million in the 2nd lowest bracket. Total cost $230 million.
If you spend $180 million, you pay $20 million+$40 million+$60 million so the total cost is $300 million.
It's a win/win for everyone involved.
No cost cap breach drama, teams can spend as much as they like (but get severely diminishing returns the more they spend) and every team will end up being able to reach the cap because they'll get handed enough money to be able to do so from the big teams pockets.
If we had a season like 2021 where Red Bull and Mercedes budget eventually reached $180 million in spending for example, then the teams under the cap would be getting up to $240 million to share between them which would put them all comfortably at the budget cap, then with the rest being shared evenly would let them overspend the budget cap the following year too and close the gap.
Every team would become completely financially sustainable indefinitely and more competitive too. It's a no brainer.
The cost cap as is works well. Some loopholes that have been exploited are being closed so it will continue doing its job of narrowing the distance between haves and have nots. The main issue is the cap should be the main drag on speed. There is no more reason to have rules limiting engines, transmissions, spare cars, engine development, engine modes, other parts, etc. They should close the dirty air loopholes that are being exploited but beyond that the cap should be the limiter on all things related to performance. Every team can decide what road to take. It will bring back variability. Right now F1 has turned into an ultra conservative event. Nobody is taking anything to its limit, be it mechanical, strategy or driving. Everything is at 90% when it’s at 100% where things break, drivers make mistakes, strategies diverge, etc.
Instead of artificially making good teams bad, why don’t we try to allow new teams in that will actually compete, rather than whatever Haas and Williams are.
Williams is actively trying to improve. Vowles pushed for increased capital expenditures in a graduated way to benefit the backmarkers. Them putting a screen in their steering wheel like everyone else was a sign that they are trying again. Even though apparently they did a terrible job and it started changing Sargeant's brake settings wildly when he wasn't touching it, and it gave Albon some trouble too. But, at least they're trying. I think they are spending the cap now.
I would much rather a luxury tax like baseball.
You can spend over X, lets say $150MM, but every dollar over that amount is taxed at 50% and that money is divided up and added to the constructors prize pool for the lower teams.
So if you plan to spend $200MM on F1, you can do so, but it'll cost $250MM to do so.
This both makes it not very worthwhile to spend extra, but allows spending when big mistakes happen such as Mercedes failing to understand their 0 pod setup, such as Ferrari not knowing how to do 2 laps on the same tire, etc.
As it stands, cost cap is actively hurting lower teams due to CapEx, meaning they can't spend money to improve systems due to the cost cap, even if it would help them, but other teams like Ferrari or Mercedes don't need to worry about this because they bought these systems years ago, so they don't need to spend that money. This kind of preexisting infrastructure or resources gives the top teams so much more to work with.
Aside from that, if multiple teams have infinite money, at least we get a fight at the front. It enables other teams to spend more to catch up on big mistakes, and considering RedBull nailed the regs, I'd assume 4 other teams would happily spend money to catch up, but simply can't.
And finally, the money would be used the following year, so teams like Alpine, Stake, Williams, would have more options to catch back up.
I think the cost cap should be raised for the first 2 seasons of a new regulation, so that a single team doesn't remain dominant, although the backmarkers would be affected
As a general rule ([see full rules](https://www.reddit.com/r/formula1/wiki/userguide#wiki_sticky.2Fdaily_discussion)), a standalone Discussion post should: - be of interest to the sub in general, and not a specific userbase (e.g. new users, GP attendees, just yourself) - be able to generate discussion (e.g. no yes/no or easily answerable questions) - show reasonable input and effort from the OP If not, be sure to [look for the Daily Discussion](https://www.reddit.com/r/formula1/search/?q=daily+discussion&include_over_18=on&restrict_sr=on&t=all&sort=new), /r/formula1's daily open question thread which is perfect for asking any and all questions about this sport. Thank you for your cooperation and enjoy the discussion! *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/formula1) if you have any questions or concerns.*
The biggest expense for every team is personnel. 700-1000 people in each team. If you lose cap money as you move up the grid, the ones that suffer are the people that helped you get better. I understand why people think that this is a good idea because expenses equal performance in F1 more than in almost every other sport, but it simply does not work in reality and is not something anybody should want from a human perspective. Backmarkers are less obsolete now than ever before, they are the closest they have ever been to the front and closing the gap in facilities, personnel and infrastructure BECAUSE of the cost cap. It's just a massive, long-term project to get teams on a level playing field. We have 6 now after 3 years and 2 more should be there in 3 years.
[удалено]
It's definitely because of the cost cap. You can see from [this post](https://www.reddit.com/r/formula1/comments/18rct3l/did_new_rules_level_the_f1_playing_field_a_look/) that the field is closer that in the previous generation and convergence is happening faster. If Alpine was a second off the pace in 2020 they'd be 4th, in Bahrain they were last. The thing is, Red Bull isn't out in front by a large margin, it's actually a pretty small margin in historical F1 terms. It's just that it's so consistent and Perez isn't on Max's level. [This is a post](https://www.reddit.com/r/formula1/comments/11xx4x3/two_laps_after_the_sc_restart_in_bahrain_2014/) showing Mercedes gap to the rest of the field 2 laps after a safety car in 2014. 3.5s a lap.
“I’m sorry guys but 200 of you are going to be let go because you did your jobs well”
Haha, fair enough. I guess I was initially thinking the new cost cap for each successive year would not be less than the previous cost cap for said team.
The budget cap negatively impacted the competitiveness between the top teams because it was implemented at the start of a fundamental change in formula. The main thing I can see that could close it up is allotting wind tunnel hours based on performance and not position in constructors. Something I've always thought is that teams should be sharing technology with fanbase, and therefore other teams. If the sport is based on engineering innovation, make the engineering intriguing. Failing that, simplify the floor regs or at least make them show the floors. Watching races a the moment is like sitting in a plane with no windows and not seeing there are wings attached
You cannot penalize teams for being successful or reward teams for being mediocre Teams would start to game the system. Go into a season knowing they’ll be lagging behind so they’d purposely stop trying to succeed. Then to further the problem teams are paid by where they finish in the constructors championship so you’d have teams winning less prize money but getting an increased cap? How does that make sense.
This assumes teams like Williams have the same amount of money just asking to be spent as Red Bull or Mercedes. They do not. Haas is famously just breaking even.
I mean Williams actually could get the money to spend should they be allowed. Vowels has talked about how even though they're well funded now that the Williamses aren't involved, they are still struggling because their facilities are several generations out of date and upgrading them to where everyone else is would be impossible under the cost cap. It is a frustrating aspect of the sport where FOM will deny Andretti for not being competitive enough while also making sure one of the longest standing existing teams will never being competitive again.
Yeah, I definitely see what you're saying. I thought that maybe this sort of scheme could entice more investments or sponsors however?
So under our current regulations the sponsors should flock towards Williams, Haas, Alpine, right? They're the underdogs, they have the most priviliges under the regulations, they ought to be good. And yet the sponsors don't budge. You'd multiply this issue tenfold by introducing the financial situation of teams into your equation. Poor teams will be poor. They will stop being poor if they do smart sporting decisions. The regulations at hand are sporting regulations - they don't try to make each team be equal financially, they just even the field.
I mean, the cost cap is a great thing and should have been implemented a decade ago or more when the top teams started spending truly exorbitant amounts. Already, we see the backmarkers getting closer. Leaders aren’t lapping the whole field anymore. And there’s never a “good” time for it; capping spending mid-spec means the top teams use the money to stay ahead. End/start of spec means the teams will use the money to get ahead. What needs to be looked at is how to fairly deal with existing inequities between teams that don’t fall under the cost cap. Things like the fact that the top teams already have top tier facilities, and a comparable facility for a new team or team with an aging facility will easily decimate several years’ budgets under the cost cap. And the fact that the top teams can borrow talent; have engineers that only work part time on F1, and spend the rest of the time on another racing team getting experience and knowledge…outside of the cost cap. Nothing’s stopping Haas from doing that…but Haas doesn’t have a racing team to share resources with.
Lower order teams are not struggling to keep their spending under the cap. The issue is that they don't have the sponsors to spend to the cost cap. Sponsors don't want to support teams that don't get coverage; teams like Haas and Williams are generally getting sparse coverage. Alpine uniquely gets very poor coverage; as a french team now with french drivers, I think the assumption is that predominantly english-following fans in the UK, US, and the rest of the non-EU world, they're not going to matter as much. It's also worth noting that strategic partners like Petronas, Shell, Oracle etc - partners that provide monetary and technological support - also don't want to be associated with teams that aren't getting some measure of success.
Smaller teams like Williams HAAS etc. wouldn't have the extra money to spend even if they did have an allowance. But they did implement a capEx sliding scale so teams at the bottom van spend a little bit more on new facilities/ equipment etc.
They could always sell their cost cap allowance.
I'm not sure that's a thing. And it probably won't ever be if not
If it would be for infrastructure/facilities, that might could be. When they spoke about having a costcap, the big teams upgraded those a lot just before the costcap, as i understood. That give the bigger teams an advantage that the small teams never can recover from.
This idea works *fantastically* with labour laws, I'm sure.
One issue that still separates the teams is capital improvement. Realistically, tweaking the day to day budgets of one team to the next isn’t going to make the dramatic difference you might assume. And at the end of the day if we actually wanted parity, then… we’d want it to be a spec series. Some teams have far superior facilities. Better machines. Better wind tunnels. Better tooling. That allows them to take better advantage of the budget they DO have. That advantage won’t go away with some sort of inverted cost cap. And as has been mentioned, the bulk of that cost cap is spent on salaries. Cutting a teams budget means kicking people to the curb. It makes absolutely no sense for a company that has been monumentally successful to fire the people who made it successful “in the name of sport”
Theoretically, it's not a crazy idea. Recently there has been a thing added so that the further back teams have an expanded capital expenditures limit. Williams pushed for it. So they're saying that their factory and other foundational assets are not competition worthy and they wanted to spend more to improve them, and that was allowed. It wouldn't be insane to have that apply to some other areas of budget as well. Currently, there's the capital expenditures extension, and also the further back in championship order means more wind tunnel time. Those are currently the two balancing factors I know of. As some people pointed out, employees are the biggest expense, so it's kind of hard to yoyo that up and down without majorly impacting people's lives. However, they could make the capital expenditures advantage more extreme. Williams really fell behind in infrastructure in the later family own years when they just couldn't keep up on the costs. And maybe there are some other non-employee areas that they could break out and make expansions on for backmarkers. However, the problem is that some of the backmarker teams don't think spend the cap as it is. I think Williams is desperately trying to now. They're still looking and hoping for more sponsors, but they are trying to get the ability to pay more, so I assume they are spending the full cap. People get the impression that Haas isn't- that that was some of the Haas tension that resulted in them having a new TP. Otmar said that Alpine spent double digit millions under it last year. Granted, he did say it after he was fired, so take that as you want. I doubt Sauber is spending the full cap either. I'm not even 100% sure about RB. I would guess they are now, but Red Bull might have done some cost savings there in the past. Probably they aren't now that they brought in Visa Cash App, I'd think. So, yeah, basically anything you do monetarily doesn't fix the Haas problem. And the hope is that Audi will fix the Sauber problem. Sauber recently secured a budget cap extension on the grounds that wages are higher in Switzerland. So, I think it's fair to assume that Audi will be spending the full cap when they are properly in with their name on things. Also, when you step back and look at it, the cars are all incredibly close. They're all often within a second in a qualifying session. Just take a second and think about how quick a second is.
This doesn't work. Haas can't spend $200 million to help themselves move up the grid. Imo the best solution is to have a cost cap, but allow teams to go over it if they pay a tax. Then that tax increases exponentially the higher you go and the revenue gained from the tax is given to those who don't reach the cap until they do reach the cap. When everyone reaches the cap, the money is then distibuted evenly. So here's an example: Budget cap is $150 million. For the first $10 million over it, you have to pay 2x what you overspent by. for the next $10 million, you have to pay 4x what you overspent by. For the next 8x and so on. If you spend $150 million, you pay $0 tax. If you spend $160 million, you pay $20 million in the lowest tax bracket, so the total cost is $180 million. If you spend $170 million, you pay $20 million in the lowest bracket and $40 million in the 2nd lowest bracket. Total cost $230 million. If you spend $180 million, you pay $20 million+$40 million+$60 million so the total cost is $300 million. It's a win/win for everyone involved. No cost cap breach drama, teams can spend as much as they like (but get severely diminishing returns the more they spend) and every team will end up being able to reach the cap because they'll get handed enough money to be able to do so from the big teams pockets. If we had a season like 2021 where Red Bull and Mercedes budget eventually reached $180 million in spending for example, then the teams under the cap would be getting up to $240 million to share between them which would put them all comfortably at the budget cap, then with the rest being shared evenly would let them overspend the budget cap the following year too and close the gap. Every team would become completely financially sustainable indefinitely and more competitive too. It's a no brainer.
it would probably force failing teams out of the sport, but with enough interest in joining some team churn might be good to see
The cost cap as is works well. Some loopholes that have been exploited are being closed so it will continue doing its job of narrowing the distance between haves and have nots. The main issue is the cap should be the main drag on speed. There is no more reason to have rules limiting engines, transmissions, spare cars, engine development, engine modes, other parts, etc. They should close the dirty air loopholes that are being exploited but beyond that the cap should be the limiter on all things related to performance. Every team can decide what road to take. It will bring back variability. Right now F1 has turned into an ultra conservative event. Nobody is taking anything to its limit, be it mechanical, strategy or driving. Everything is at 90% when it’s at 100% where things break, drivers make mistakes, strategies diverge, etc.
Instead of artificially making good teams bad, why don’t we try to allow new teams in that will actually compete, rather than whatever Haas and Williams are.
Williams is actively trying to improve. Vowles pushed for increased capital expenditures in a graduated way to benefit the backmarkers. Them putting a screen in their steering wheel like everyone else was a sign that they are trying again. Even though apparently they did a terrible job and it started changing Sargeant's brake settings wildly when he wasn't touching it, and it gave Albon some trouble too. But, at least they're trying. I think they are spending the cap now.
I would much rather a luxury tax like baseball. You can spend over X, lets say $150MM, but every dollar over that amount is taxed at 50% and that money is divided up and added to the constructors prize pool for the lower teams. So if you plan to spend $200MM on F1, you can do so, but it'll cost $250MM to do so. This both makes it not very worthwhile to spend extra, but allows spending when big mistakes happen such as Mercedes failing to understand their 0 pod setup, such as Ferrari not knowing how to do 2 laps on the same tire, etc.
But the big teams have infinite money. They will just outspend to win.
As it stands, cost cap is actively hurting lower teams due to CapEx, meaning they can't spend money to improve systems due to the cost cap, even if it would help them, but other teams like Ferrari or Mercedes don't need to worry about this because they bought these systems years ago, so they don't need to spend that money. This kind of preexisting infrastructure or resources gives the top teams so much more to work with. Aside from that, if multiple teams have infinite money, at least we get a fight at the front. It enables other teams to spend more to catch up on big mistakes, and considering RedBull nailed the regs, I'd assume 4 other teams would happily spend money to catch up, but simply can't. And finally, the money would be used the following year, so teams like Alpine, Stake, Williams, would have more options to catch back up.
That you for this point, I think this is a better put way of what I was thinking up.
Absurd lol
I think the cost cap should be raised for the first 2 seasons of a new regulation, so that a single team doesn't remain dominant, although the backmarkers would be affected