The FIA announced today that Aston Martin and Red Bull were in breach of the cost-cap regulations for the 2021 audit just completed. The statement read:
“The FIA Cost Cap Administration is currently determining the appropriate course of action to be taken under the Financial Regulations with respect to Aston Martin and Red Bull and further information will be communicated in compliance with the Regulations.
“Procedural Breaches can result in Financial Penalties and/or Minor Sporting Penalties (in case of aggravating factors) as detailed in the Financial Regulation. “Minor Overspend breach (<5% Cost Cap) can result in Financial Penalties and/or Minor Sporting Penalties”
This means that Red Bull spent more than the allotted $145 million limit for 2021. It also stated that all teams had been certified except for Aston Martin, Red Bull and Williams. It seems Williams was late in submitting their documents and the team were fined for that infraction.
According to Jonathan Noble over at Motorsport, Aston Martin and Williams were deemed to have had a procedural breach of the regulations while Red Bull had a breach in both procedure and spend. Aston Martin ere very keen to point out that they did not overspend as alleged by some in the paddock last week.
The penalties for a breach under 5% are a fine, limiting of aero testing, a possible deduction of driver’s or constructor’s points, exclusion from events or a public reprimand according to Noble’s article.
This will no doubt lead to calls for exclusion from last year’s championship or a points deduction which would give Mercedes and Lewis Hamilton the driver’s title for 2021. There will be scrutiny on how the FIA handles this situation and the timing isn’t good given the recent debacle at the Japanese Grand Prix and the heavy criticism the FIA is facing for it’s missteps in 2022.
Should the FIA apply stiff penalties for a sub-five percent breach, some will consider the harsh given the cost-cap regulations are brand new and the sport is trying to get its first audit and process completed.
Others will feel that severity for breaches is the only way to make these regulations work regardless of if it was under 5% or not. If the penalty is light, teams will opt to overspend up to 5%. Or that might be the thinking at least.
Team bosses Toto Wolff of Mercedes and Mattia Binotto of Ferrari have been very vocal that even slight over-spending can lead to car performance increases that are now homologated for the next several seasons. I argued a similar situation with the 2014 engine regulation changes that were heavily in Mercedes favor as it was a baked-in advantage for 8 years running. Could that be similar for Red Bull with a car that is better than the rest in terms of weight, aero or performance? It seems Binotto and Wolff certainly believe so.
Much of that could depend on what the overspend was for and if that is evident in the audit. Toto argued that Red Bull would try to suggest they overspent on sandwiches and he wasn’t buying it. That will be an important element in regards to the penalty.
Many will call for transparency of the audit and where Red Bull spent its money and how much. Fair enough but I am more interested in how Toto Wolff knew that Aston Martin or Red Bull had overspent as he called it an “open paddock secret”.
If we are calling for transparency, I’d like to know who is leaking this information to Toto or the media? That, to me, is a bigger issue than the overspend in many ways because it came from the very organization that is supposed to be the arbiter of the regulations, the auditor and regulator of the races. This adds more egg on the face of the FIA who is currently having a bit of a PR crisis at the moment with its nose stud debate, tractors on track, inconsistent penalties, penalty review delays and much more.
This is most likely a no-win situation for the FIA who are under serious pressure already and no matter how they adjudicate this issue, they will take incoming fire over their decision. Other teams will go after this issue like vultures at a kill trying to devour Red Bull and its pace advantage in 2022.
For the record, I have never been a fan of the cost-cap regulation, I didn’t see how it could be managed effectively, I didn’t feel the teams would welcome independent auditors plowing through the financials of a private company and in the end, what happened is exactly what I feared and stated several years ago when the ideas was being crafted.
These teams are independent, private companies and 3rd party audits that then leak information is a death blow to the sport. You cannot have internal people leaking information about how or where Ferrari might spend on their racing program. It would erode all credibility in the sport if Aston Martin was told what Mercedes were doing with their P&L or what accounting procedures they were using.
There was also the question I had back then about how manufacturer teams could bury R&D costs in their road car divisions and I warned that business process is business intelligence and that is intellectual property of each team. Having the FIA plow through this in a ham-fisted manner and then leak findings to other teams is the very reason I would suggest they cancel the cost cap regulations and design a more elegant solution to the problem.
“a possible deduction of driver’s or constructor’s points” And there it is, as far as millions of entertainment in sport fans are concerned. So here it comes, you can alomost hear the outcry, the horror: Some will say Verstappen didn’t win last year, some will say this applies to this year, some will say it applies to Red Bull staff, some will start a version of “budget-break” gossip that will be never-ending. No matter to outcome of actual facts, F1 will have a tarnished image and, I expect, at the very least asterisks next to champion’s and team’s names for… Read more »
Indeed. They brought this on themselves and before all the explosive growth so new fans will be like, “what the heck?”. They also have the mobocracy attacking everything the FIA does, team bosses dog-whistling agendas, hints, innuendos and allegations. What a circus. This is a perfect example of why I choose prudence over pragmatism.
I agree. Part of the problem, I feel, is that the FIA is actually a non-expert club “244 motoring and motor sport club members in 146 countries”. I mean, come on, most FIA members are appointed by kings, sheiks and motosports clubs – diplomatic or jobs-for-the-pals appointments. The ones from the UK are part of the authomobile rescue companies (RAC, AA)… The USA member George Silbermann at least was involved with the business of motorsports (IMSA and NASCAR).
I would even go so far as to say that their “non-expert” status goes to the heart of a problem: A private organization isn’t quite as good as a governmental agency. In this case, It would have to be an international agency backed by the United Nations. Give it at least the color of law so that everyone understands that there’s no messing around here, and make sure that all regulations are tight and exacting. Then, have the guts to enforce it, even for the slightest infraction, even if it were unintentional (that’s usually warranting of a much lesser punishment).… Read more »
The only way that you would ever see this, is with a return of the original power couple. Situations like this is where (for all their public issues) Mosley and Ecclestone came into their own. They ruled the sport with an iron fist that no team would want to feel the wrath of. McLaren and spygate come to mind. Under the current administration, it would probably have been swept under the carpet like the Ferrari engine issue a couple of years back.
FIA was still a motoring and motorsport club back then but Max M. was a different breed of cat. So was Balestre. They need to expand the org with professional groups for stewarding, marshaling and more.The FIA has to rise to the occasion with more professionalism and better business strategy.
Stewarding has always been a contentious issue that the FIA has failed to resolve. It has never been more than a mates club job to keep local motoring organisations voting the right way for the person at the top. Marshalling on the other hand, sems to depend mainly on the country where they’re racing. Some circuits have fantastic marshals. Normally in countries where they have lots of motorsport, but even then, you can still have mistakes.
Agreed. We’ve said for years that the days of motoring clubs and the FIA in this kind of pay-to-play process is woefully short of the premier motorsport series. F1 needs to discuss this with the FIA or the FIA needs to become much more professional in their approach.
Agreed.
Well, then you tell me: How would you design a system so that richer folks don’t get an unfair advantage? It’s not enough to say what the problem is. You also have to present a detailed solution or you become part of the problem. I recall this Biblical passage of how Abraham was found sleeping naked in a tent. This guy Ham who found him there told Abraham’s sons. They immediately got a sheet and covered up Abraham. Ham got cursed and the sons were blessed. So, you tell me: Who committed the greater sin here? The person who says something about a problem or the person who… Read more »
Deploy the wisdom of Solomon. Split the baby. ;)
I’d say that Williams didn’t get their monies worth.
Let’s say Red Bull just gets a fine for this. If I was Mercedes, knowing Red Bull has already won this year, I’d breach the cost cap now and pay the fine tomorrow to help me with next years car….what stops them from doing that?
Yeah, there is a lot to be said about setting a precedent or tone. If spending under the 5% mark get a fine, then other teams would do it too. I suspect it be limited aero, fines but you never know.
Applying some common sense (maybe)…..how is it that one of the largest and well resourced teams on the grid has ended up in this position? It’s not like some mid-grid team has been caught cheating its way up the championship table in way that would lead to some massive penalty or exclusion. I don’t believe RB honestly thought they would get away with any obvious infringement knowing they would be under equal if not more scrutiny than others due their high level of spending vs. the lower grid teams. My theory is that this is related to the way RB… Read more »
I agree Glenn, I thin before we rush the castle and hang the staff and demand incarceration and the dissolution of the Red Bull company as a whole, we need to wait and see what comes out in the details. I suspect you are much closer to the reality than the mobocracy on social media. If I had to bet, I would say that Red Bull interpreted the regulations one way in terms of accounting procedure and what is and isn’t included and the FIA interpreted it differently. The FIA included something that Red Bull are convinced shouldn’t be included.… Read more »