Max Mosley has contended that if the FIA had waited any longer before introducing the controversial new optional budget cap into Formula 1 it could have been 'too late' and the sport 'may have lost other manufacturers or even independent teams, despite their best intentions'.

The top flight's heavily-revised sporting and technical framework - unveiled yesterday (Tuesday) following a reunion of the World Motor Sport Council (WMSC) in Paris - has provoked a good deal of debate within the grand prix paddock. Detailed regulations are due to be published 'shortly', the FIA President underlined, 'because new teams wishing to enter the 2010 championship will need to start work immediately'.

Mosley also stated that it is the FIA's intention to ask the WMSC to agree to increase the number of teams allowed to participate in the sport - currently limited to just twelve - safety permitting, and that should an eleventh and twelfth team come on-board in 2010, Bernie Ecclestone's commercial rights Formula One Management (FOM) company will pay them $10 million each in addition to the standard transport package.

The 68-year-old added that the cap had proven necessary - above and beyond the initially agreed cost-cutting in F1, to the tune of some 50 per cent by 2010 - as a result of the worsening of the global recession, and he was adamant that smaller budgets would have no bearing upon sponsors, which are becoming increasingly hard to find in the current financial climate.

"The worldwide economic crisis has worsened very significantly since December, when we met the teams in Monaco," he reasoned. "No-one can say the situation will not deteriorate further in the coming months. If this happens, we may lose other manufacturers or even independent teams, despite their best intentions.

"If we wait and things get worse, it will be too late. Conversely, if economic conditions suddenly improve, we will at least have some new blood in Formula 1. It is obviously the FIA's duty to try to plan for the worst case rather than just hope for the best.

"Sponsors will pay what the brand exposure on offer is worth to them. Competitors in sports like tennis or golf earn large sums, despite their costs being minimal compared to Formula 1. Sponsors in the current climate are more likely to be repelled by obvious profligacy than by a budget cap."

With many questioning in particular just how the budget cap will be policed, Mosley revealed that there will be strict checks in place to ensure that no competitor manages to circumvent the new measure by underhand or clandestine means. He also insisted that 'we will make sure the [technical freedom] advantages [available to those who sign up to the initiative] do no more than balance the disadvantages the cost-capped teams will have because of their very restricted budgets'.

"We went into all this very carefully some time ago," he stated. "We involved forensic accountants from Deloitte and Touche as well as financial experts from the current teams. The vast majority of payments are traceable and any benefits in-kind can be valued.

"There were a number of meetings and it became clear we could do it. The problem was getting the current teams to agree a figure. Also, the majority wanted a lot of exclusions such as land and buildings, the team principal's salary and the drivers.

"We would also need the right to carry out very intrusive audits and impose severe penalties for overspend. However, these difficulties no longer arise because each team will now be able to choose whether or not to run under the cost cap.

"[The freedoms will include] a different - but standard - under body, movable wings, no engine rev limit, no restriction on the number or type of updates, no homologation requirements, no limits on materials, testing, simulators, wind tunnels and so forth. Most of the cost-saving measures introduced over the last few years will not apply to these teams.

"However, measures to save money during the race weekend, such as the ban on refuelling and the Saturday parc ferm?, will apply to both categories of team. We are also thinking about a much bigger capacity KERS (Kinetic Energy Recovery Systems) for the cost-capped teams, but all this must be covered by the ?30 million - no exceptions and no free or subsidised outside help.

"Anything supplied by another team or an outside supplier will be included at its full commercial cost, except for items supplied to all teams at subsidised rates under the single-supplier arrangements negotiated by the FIA (e.g. for tyres), which allow all teams to benefit equally from reduced costs.

"Provided they comply with all relevant laws, rules and regulations and observe the spirit of sporting competition, there is nothing to stop some FOTA (Formula One Teams' Association) members agreeing among themselves to observe certain rules or conventions - provided these do not affect anyone else.

"We will make sure these advantages do no more than balance the disadvantages the cost-capped teams will have because of their very restricted budgets. We will balance the median performances by adjusting the cost-capped cars should this prove necessary.

"We will have a catch-all clause for the cost-capped teams enabling us to stop anything which goes against the spirit of the cost cap and allowing us to rule definitively on any unforeseen problem. The unlimited-expenditure teams, however, will benefit from absolutely stable technical rules - in return for which we understand FOTA intends to provide guarantees of continuing participation until 2012, underwritten by the major car manufacturers. The FIA has a lot of experience in performance adjustment and equivalence."



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