Supercars teams hit with salary cap
By Robert Grant
09dec06
V8 Supercar teams will be liable for sanctions of up to $1 million for breaches of a salary cap to be introduced next year.
Two-car teams will have a total of $6.75million to spend under the Total Racing Expenditure Cap introduced to make the series more competitive.
The difference between corporate-backed teams and the independent outfits will narrow further when the cap is reduced in 2008.
The operating fund will cover everything from driver salaries to the cost of running a racing operation, but it will not apply to spending on promotion and marketing.
Fines for exceeding the limit can range from $1million to starting from the back of the grid for an entire season or starting an endurance race two laps down on the field.
The cap was designed by the Touring Car Entrants Group (TEGA) commission that includes former AFL boss Ross Oakley and former Federal Opposition leader John Hewson.
The group was formed after approaches from several Supercar teams worried about the continuing viability in an environment of spiralling costs.
TEGA chairman Kelvin O'Reilly said the commission would appoint an investigations officer to oversea the cap, and teams would have to maintain an accurate record of their spending.
"We don't believe that we'll ever have to apply the most severe of sanctions because the teams have all expressed a desire and a need for the championship to embrace the cost elements," O'Reilly said.
Teams would still be free to pay drivers whatever salary they wanted, but they might have to cut back in other areas such as technology or parts, O'Reilly said.
Oakley said the $6.75million figure was decided after talks with all the teams about their current budgets.
An examination of the team's costs found the gap between the spending power of the smallest and largest teams was too great, he said.
The biggest teams were understoof to have spent up to $12 million a year, including promotion and marketing - four times that of the budget of smaller teams, Oakley said.
"That spread is just too much to be sustainable," he said.
"What it tended to do was the teams on the lowest budget would strive to match it with the best teams...and they would eventually go out of business - or they would continue to operate at their capacity and continue to be at the back of the grid."
Bigger teams would be given about two years to downsize their operations in line with the new limit, Oakley said.
Veteran team manager Tom Walkinshaw, the race program operator for the Holden Dealer Team and the Toll HSV team, said he was still examining the new rules.
"We've just been informed about this so we will digest it all and work out how to comply with the rules," Walkinshaw said.
