| The season of 2008 has witnessed astounding | | | | times, the first thing organizations cut back on is |
| growth in Formula 1 auto racing. With the addition | | | | advertising. Ad revenue represents 80-85% of |
| of two new circuits including Valencia, Spain and | | | | the teams’ total income and when that is |
| Singapore, we have seen a tight championship | | | | pared down, the teams may struggle to come up |
| being fought by talented young drivers. For those | | | | with enough resources to maintain current |
| of you not familiar with the format of F1, there | | | | spending. |
| are currently ten teams consisting of two drivers | | | | The budget cap’s economic benefit, of |
| each. Each team also contains engineers, | | | | course, is to cut down on costs. This is going to |
| designers, test drivers, principles, pit crews, and | | | | create a greater opportunity for the sport to |
| many other staff members who make it possible | | | | innovate and come up with cost saving measures |
| to bring the teams together every couple of | | | | while maintaining performance. For example, a |
| weeks from March to November. | | | | major part of a team’s budget is the engine. |
| Now that Lewis Hamilton has snatched the crown | | | | In 2008, teams were required to use an engine |
| from the hands of Felipe Massa, teams and fans | | | | for two race weekends in a row; if they switch |
| are looking towards next season; a whole new | | | | out an engine against regulations, they must take |
| batch of regulations and a couple of new faces. | | | | a penalty. The regulation is revised in 2009 so |
| One regulation seems to be more and more | | | | that engines must be used for three weekends in |
| common is sporting these days, and that is the | | | | a row. BMW Sauber says “this change to the |
| idea of budget caps. | | | | regulations is intended to reduce costs in Formula |
| In order to compete in this sport, there needs to | | | | One. On the other hand, the FIA wants to |
| be A LOT of money behind each team. When I | | | | challenge and promote technical reliability among |
| say “A LOT,” I mean these ten teams | | | | the teams.” |
| have well over $3 billion in resources at their | | | | Teams will be challenged to come up with new |
| disposal! The stats also indicate that the more | | | | technology and even more reliable components |
| money a team has, the better the team will | | | | for their cars. |
| perform. | | | | An addition already in effect is the standardization |
| However, with a proposed budget cap and the | | | | of electronic control units which controls the |
| top teams sharing notes, how will the | | | | components of the engine. ECUs are |
| championship look in 2009? | | | | manufactured by an FIA approved supplier and |
| 2008 ended with Ferrari retaining the | | | | can only be used with approved software. Since |
| Constructors championship receiving 171 points. | | | | teams are provided with ECUs and don’t |
| McLaren-Mercedes was the runner up (151 points) | | | | have to develop their own, the expenditure has |
| and BMW Sauber came in third (135 points). | | | | been greatly reduced. Gearboxes have also been |
| These three teams alone account for 65% of the | | | | provided in the same fashion, decreasing those |
| total constructor points distributed. These teams, | | | | team costs as well. |
| incidentally, have a massive amount of resources | | | | In this time of uncertainty, the FIA as well as the |
| established with a combined 40% of the total of | | | | teams would be acting prudently by instituting |
| the 10 teams. In 2009, the goal of the budget cap | | | | budget caps and lowering costs to make the |
| should be to bring more competition to the sport | | | | sport more competitive. More competition is good |
| and allow for the lesser financed teams to | | | | for the sport because it could allow for more |
| compete for the championship as well. | | | | teams to enter the sport and bring in a larger fan |
| Also, let us not forget that the world is in a global | | | | base. I was quite disappointed when the United |
| economic crisis. A sponsor may spend up to $50 | | | | States Grand Prix was removed from the |
| million to put their name on a top ranking Formula | | | | Formula 1 calendar, but with lower costs, it may |
| 1 car but it may be difficult for some | | | | be possible for more teams to enter the sport |
| organizations to spare the cash. During volatile | | | | and bring it back to America. |