The news that Christian Horner of Red Bull had been the first team principal to speak out against the proposed $200 million budget cap was not really a surprise. My first reaction was along the lines of Mandy Rice Davies’ famous quote, ‘well he would, wouldn’t he?’ but on reading further I realised that he might actually have a point.
One of his objections was that it would hinder the bigger teams, but would not give any advantage to the smaller teams who could not realistically get anywhere near the spending limit. This would be akin to making Premier League teams only field eight players in FA Cup matches, while the lower divisions could still play with full squads. While this might restore some sort of balance in results, it would not really be a fair way of doing so, however much the thought might appeal to the darker side of our natures.
The previously mooted idea of allowing teams to choose to either have an unlimited budget but with technical restrictions, or keep to a budget cap but have technical freedom, also floundered back in 2010, partly because it would have effectively turned every F1 race into two separate races, between two separate groups of teams, that just happened to be on the same race track at the same time.
Maybe the answer instead would be to look at how other sports deal with the challenge of maintaining competition in a free market, and an idea from American sport might be worth considering; rather than a budget cap, a ‘competitive balance tax’, commonly known as a luxury tax, found in Major League Baseball.
The way this works is that there is a spending threshold which is set by MLB, but unlike a spending cap, teams are allowed to go over that threshold if they wish. However, if they do, they then have to pay a percentage of that additional overspend to the organising body, which then uses that money for various expenses within the sport. If we combine this competitive balance tax with another idea from baseball – that of revenue sharing, where a percentage of the income of the biggest teams is redistributed to the lower income teams – we just might get something that could work in F1.
So, in short the idea is this; there is a budget threshold, rather than a cap. Red Bull, Ferrari, Mercedes, et al, are all free to spend more than that if they wish, but for every dollar spent over the threshold a percentage is paid into a central source, which then redistributes it to the smaller budget teams. The further behind the front you are, the bigger the percentage you get.
You allow the top teams to spend as much as they like, providing they are willing to pay a little extra for it, and you help boost the competitiveness of the smaller teams at the same time.
Now, doesn’t that sound fairer? What do you think, Mr Horner?