The FIA is poised to present a package of radical technical restrictions for 2010 designed to get the cost of competing in Formula 1 down to as little as €50 million a season.

In a white paper seen by itv.com/f1 and due to be presented to the teams, the governing body’s blueprint outlines how much bigger cost cuts can be made than the savings already agreed with the teams at the end of last year.

The proposals call for a relatively small list of defined areas where technical competition between the teams will be allowed, with all others areas to be designated 'non-compete', as is currently the case with engines.

Other areas in which the FIA will push to end technical competition will include gearboxes and the wheel/brake/suspension elements, with the aim being to permit competition only in those areas which are most easily identifiable by fans.

Furthermore, should manufacturer teams decide to compete in an area of technical development then they will be required to provide the technology they design at a capped price to teams that choose not to compete in that area.

By setting out an agenda for deeper cost cuts and technical restrictions now, the FIA believes it may be easier to tempt interested parties into buying Honda with major savings in F1 on the horizon, while also ensuring other manufacturers remain committed to the sport.

Analysis

The FIA believes it should be possible for all Formula 1 teams to operate on a budget of €50 million a season – roughly a quarter of what top teams spent last year – and is poised to present a package of technical restrictions for 2010 to achieve that.

Against a backdrop of mounting gloom in the automotive industry, with plummeting sales and mounting redundancies, the FIA feels it must urgently identify and specify areas of the cars where teams will not be allowed to compete technically with each other.

By doing this it hopes to send out a message to the boardrooms of the manufacturers and to potential buyers of Honda that the cost of competing is going to be radically reduced for 2010.

The objective is to shore up the existing manufacturers and attract new entrants.

F1 currently has two of its 12 franchises unfilled and if Honda is not sold, there will be three vacancies.

Engines are one area where technical competition has been eliminated; the FIA now wants to add many more ‘non-compete’ items, including gearboxes and the corner of the car (wheels, brakes and suspensions).

Indeed, rather than say which areas are non-compete the package due to be released to the teams will specify the areas in which teams are allowed to compete.

The idea is to drive costs down now, at the height of the economic downturn, when savings are most needed.

Then once the economy picks up, the FIA will reintroduce areas of technical competition.

“When we see that things are picking up and there is more money in multi-nationals for discretionary spend, then we can start reintroducing a wider technical competition,” said Tony Purnell, technical consultant to the FIA and author of the white paper on cost containment seen by itv.com/f1.

“But we’ll keep to a central philosophy that engineers work on things that are relevant to society, like fuel economy and efficiency.”

To address concerns that the measures will ‘dumb down’ F1, Purnell’s response is that F1 must maintain it’s aura of ‘awesome technology’ and ensure that this is made more obvious to the fans, rather than devote millions of pounds to refining brake ducts or suspension uprights which no one ever sees.

He cites the example of seat belts, which should cost in the hundreds of pounds but through the use of lightweight exotic materials have risen to tens of thousands of pounds.

The FIA envisages teams operating on €50 million per season, where €30 million is for fixed costs such as factory, wages, travel and going racing, while €20 million will be the cost of the car build, once the non-competitive areas have been defined.

This would be funded by income of €40 million from the TV fund and €10 million form sponsorship.

FOTA argues that the TV pot should be bigger and is working to try to increase the teams’ share.

But for the time being, with the revenue set at the level it is, the target budgets are based on 2009 TV income.

The big teams earn more from the TV fund (up to €70 million for the championship winner) and attract more sponsorship.

They will be allowed to spend money if they wish to in the areas of design freedom, but the important caveat in the white paper is that if they decide to compete in an area of technology they must be prepared to supply the technology they develop at a capped price to the teams who choose not to compete – in the same way that FOTA agreed that engines will be made available to independents at just €5m a season.

Although likely to be unpopular with the top teams, this measure would help the smaller teams to challenge the most competitive cars and reduce both the opportunity and the incentive for manufacturers to embark on a spending ‘arms race’.

The Formula One Teams’ Association met yesterday to discuss a wide-ranging agenda including cost-cutting.

FOTA has not been presented with the FIA’s new package yet and it is likely to prove more radical and far-reaching than it is comfortable with.

Ferrari president Luca di Montezemolo has called for a phased approach to reducing costs, saying recently: “We’ve done extraordinary work on costs for 2009 and will go on in a systematic way for 2010 and 2011.”

Meanwhile Ron Dennis suggested to the Financial Times that ramping up the number of non-compete areas on the car was not the way to go.

“F1 should not be a prescriptive formula where engines and a large group of components should be standard,” he said.

“That places total emphasis on the driver, and if you went down that route the drivers would be the key ingredient and that is where the money would be spent.”

Renault’s Flavio Briatore has always been at the other end of the scale from Dennis in terms of wanting to drive down costs and focus on improving the show.

Renault is thought to be one of the manufacturers most likely to review its participation in the sport with redundancies and salary cuts already taking place at the team’s Enstone HQ.

Briatore believes that a more gradual reduction of 25% for next year is right.

“We believe that it is possible to cut budgets by 60% by 2012,” he says.

“We want a sport which is for the fans, not for the engineers.”

The white paper suggests maintaining the "technical awe" that makes F1 unique, but in tightly defined areas only, and to make that technology more obvious to the fans and more affordable for the competing teams.

Having examined and rejected the idea of budget-capping and standardised parts, the idea of introducing areas of ‘non-compete’ seems to be welcomed by all parties as the right way to contain costs.

The problem may be that the FIA wants to prescribe more areas, more quickly than FOTA is prepared to accept.

source[www.itv-f1.com]