The World Motor Sport Council of the International Automobile Federation
(FIA), the sanctioning body of Formula One, announced in Paris on
Thursday its regulations for cost cutting in the sport. The Council
imposed a spending cap of ?40 million ($58.9 million), ?10 million
($14.8 million) more than the
amount originally proposed. The figure was arrived at through a cost
analysis that determined 70 per cent of competitors could show a profit
on that budget.
 |
|
Max Mosley, FIA President. Photo by xpb.cc.
|
 |
A report commissioned by global financial services firm Allianz a few
years ago put Formula One fourth on the list of biggest-spending sports,
behind the Olympic Games, the FIFA World Cup soccer tournament, and
America's Cup yachting. None of those contests is held on an annual
basis, making F1 the spendiest sport running every year. The series
contests 17 races this year.
The cap, to be in effect from 2010, doesn't cover marketing and hospitality,
driver salaries or driver development schemes, FIA fines or penalties,
engine costs -- for 2010 only -- costs that can be shown not to affect
performance, or dividends, including tax, paid from profits relating
to championship participation. Formula One stages championships for
constructors and for drivers.
The spending cap is optional. Teams can elect each year whether to
participate.
Teams choosing to abide by the cap will be allowed greater technical
freedom, primarily use of movable front and rear wings, and unlimited
engine revolutions. They also will be allowed unlimited out-of-season
testing and wind tunnel use. Engines currently are limited to 18,000
rpm. Cosworth, which dropped out of F1 in 2006, is said to have an
affordable engine available that could generate 20,000 rpm.
All teams intending to compete in 2010 are subject to a refueling ban,
which is intended to cut costs and promote better fuel mileage. All
teams are also subject to a tire-warmer ban.
The Council will name a three-member commission to monitor spending of
teams choosing the budget cap. Commissioners will be independent of
teams. Teams working under the cap will bear equally the cost of the
commission.
A spending cap is seen as particularly beneficial to independent teams,
which are thought to lack the funding available to factory-conected
teams. A global fall-off in automobile sales, which in part forced Honda
out of the sport in December, has hurt factory-backed teams. Toyota and
Renault cut F1 budgets. Mercedes parent Daimler this week announced a
loss of nearly $2 billion for the quarter ending in March.
The Formula One Teams Association formed last season to influence the
FIA in the matter of a budget cap. They agreed a series of cost-cutting
measures and will meet next week in London to consider today's
announcement.
"Williams has supported the introduction of a budget cap since the idea
was first put forward early in 2008," said independent team owner Frank
Williams. "Since then, FOTA has made tremendous steps forward on costs,
but the rationale for a budget cap has also grown even stronger. We
would like to see all the teams operating to one set of regulations
and under a budget cap in 2010, and that is the position we will be
advocating within FOTA when we meet next week. We understand that this
will represent a serious challenge for some of the teams, but we expect
that FOTA will work together to find a unified and constructive way to
take the FIA's initiative forward."
The Council also opened competition to as many as 13 teams or 26 cars,
a number not seen in the sport for 15 years. Ten teams currently put 20
cars on race grids. The FIA will take applications for the 2010 season
between May 22 and 29, at which time teams must state if they choose to
work under the budget cap. The list of accepted cars and drivers will
be published June 12. In addition to a United States-based team that
earlier this year announced an intention to compete next year, Lola
and iSport have been hinting at an interest in entering the series.
|
 |
|
Bernie Ecclestone. Photo by xpb.cc.
|
Bernie Ecclestone's Formula One Management, which manages the sport's commercial rights,
will include new teams among participation and expense payees. This
includes an annual payment of $10 million. FOM also provides each team
shipping to non-European races of two chassis and 22,000 pounds of gear,
and 20 economy-class air tickets. Teams eligible for FOM consideration
must be considered constructors and must prove their capability to
produce, finance and run a team.
In other action, the Council announced a change to a previously approved
World Rally Championship calendar. Indonesia and Russia did not pass
inspection and are not approved to run in 2010. Rally Monte Carlo may
ask to rejoin in 2011 instead of 2010. Proven events will take the
places of dropped races to fill the calendar.
In Formula Two, the
Council approved a scheme for drivers to drop scores from two races.
