Liberty Media Toying with Budget-Cap Idea

If a Massive Manufacturer like Mercedes or Ferrari can’t use their resources to beat teams like Sauber and Manor on-track, then there is no point competing in Formula One and the big names will look at other Motorsport options.

This is the danger of the budget-cap, it creates a more even playing field and would make the big brands of the sport appear less competent, even if we partially know it’s a case of excessive spending that keeps them ahead in the first place.

CREDIT: Autosport
CREDIT: Autosport

There is a thinking that suggests that the largely skewed financial playing field allows the likes of Mercedes and Ferrari to spend copious amounts of cash on being innovative, but smaller teams are denied the same extent of innovation because the wallet doesn’t permit it. The argument is that the heavy advantage that some big teams have actually gives a falsified account of innovation and performance because they are financially free to create hundreds of components, but we only see the ones that work.

An unnamed senior source close to Liberty Media’s plans said,

“It makes no sense to have teams spending the better part of $400m. That money is not doing anything good for fans. It is just wasted on competing on technology.

That has not been driven by logic and it has created a two-class society in terms of what is spent on teams. You should have an opportunity for the underdog to win.”

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Liberty Media’s predecessors CVC have to shoulder blame on the evolution of this two-tier landscape, given that extracting the largest profit from the sport was their primary objective over their lengthy free reign of the sport. They could have poured a percentage of the money they extracted into a fairer system for teams, but yet again, sport and the air of competition lost to the fattest cats in town.

Dear CVC, Merry Christmas From the F1 Community
Dear CVC,
Merry Christmas
From the F1 Community

Budget caps were proposed in 2009 and Ferrari and Red Bull threatened to quit. Is this competitive behaviour or anti-competitive? If these teams genuinely believe they have the best personnel and the most competent people designing and working on their cars, then why the hesitance to give the smaller budget teams more financial freedom? If anything, the big team vetoes on proposed budget caps only show a lack of confidence. Yes, a budget cap would see them lose some of their advantage, but it would make any victories under a fairer system more undisputed.

If Formula One continues to be a spending war, interest will wane as true sporting competition dies. The sport used to be naturally more even with privateer teams and minnows sometimes able to achieve the unlikely solely on merit, with budgetary gaps smaller due to the purely mechanical aspect of the sport. Now, it’s data, Research and Development, Hybrid Engine Development and fine-tuning every aerodynamic detail on the car – for the teams that can afford it.

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Next season will see spending through the roof with an open engine development system. But remember, it won’t be a case of the most naturally competitive team evolving the quickest – just the wealthiest.