2021 Cost Cap Rumours and Speculation

[e30ernest]

More leaks?
Max Verstappen 'keeps F1 title from Lewis Hamilton' as Red Bull 'learn FIA penalty'
https://www.msn.com/en-au/sport/motorsp ... r-AA12CFmp

Max Verstappen will not be stripped of the 2021 Formula One title despite Red Bull breaking F1 rules in a massive blow to Mercedes and Lewis Hamilton. That is according to journalist Alexandre Braeckman, per F1i, who claims the FIA initially found Red Bull to have exceeded the budget cap allowance by a massive £10.5million ($12million) but have since found the alleged breach to be significantly less serious than that. However, the FIA insist their findings will not be released until next Monday (October 10).

After an appeal and a further review, their overspend is claimed to now be just £131,000 ($150,000), per F1i. This constitutes only a minor breach of the regulations meaning Red Bull will not face the more severe sanctions such as losing championship points.

It is reported that the FIA have instead fined Red Bull £22,000 ($25,000) for breaking the budget cap guidelines. The error was because costs incurred by powertrain development were initially included in the submission to the FIA.

The apparent FIA press release added: "The FIA is satisfied, that under the 2021 regulations when powertrain development was not frozen, that this development could also include wind tunnel testing as well as research and development into floor technology which was not required as part of the submission... continued at link

That is based off the fake press release posted here as well.

[GrizzleBoy]

Crazy that some news outlets actually ran with that.

[Wil992]

The deadline for the announcement was set by the fia, who presumably have hired a team of accountants from some large consultancy firm (PWC/KPMG/whatever) to do the the analysis. Having worked for those kinds of firms for many years, I’m pretty sure they won’t have been late delivering such a high profile task, they rarely are.
So, by far the most likely explanation for the last minute delay is that irregularities have been uncovered. The thing I guess none of us know is what happens then? Do the FIA go back to the team(s) in question and ask for clarification? Is there some kind of behind closed doors appeal process where you can argue that xyz expense should be excluded? Are we now in the middle of the financial equivalent of teams badgering the race director?
Anyone got any idea at all what the process is after all the numbers have been added up?

[Just_a_fan]

How many seconds is $1million worth? How many seconds of development did it take to keep in front? The punishment must be harsher than the gain you say.

I think 1M$ is like .03 points of downforce currently.

It has been suggested that the teams would spend $7-8m a year on the in-season development of the cars. So $1m is a big chunk of development potential.

[e30ernest]

The deadline for the announcement was set by the fia, who presumably have hired a team of accountants from some large consultancy firm (PWC/KPMG/whatever) to do the the analysis. Having worked for those kinds of firms for many years, I’m pretty sure they won’t have been late delivering such a high profile task, they rarely are.
So, by far the most likely explanation for the last minute delay is that irregularities have been uncovered. The thing I guess none of us know is what happens then? Do the FIA go back to the team(s) in question and ask for clarification? Is there some kind of behind closed doors appeal process where you can argue that xyz expense should be excluded? Are we now in the middle of the financial equivalent of teams badgering the race director?
Anyone got any idea at all what the process is after all the numbers have been added up?

This are my thoughts exactly. These firms are rarely late if a high-profile client has a set deadline. And even if they were going to be late, they would give advance notice and wouldn't wait until the last minute to inform their client. Likewise, if the FIA knew they would not make the deadline, they would have likely announced this even earlier instead of the last minute announcement they made.

This last minute change/announcement is indicative that someone was not pleased with the results. It doesn't only have to be a team going overbudget, but a it can also be a team (or teams) requesting an apparently on-budget team to be investigated further. Either way, the sudden change of deadline is a red flag IMO.

[Just_a_fan]

So a few questions, where did the info that the FIA was going to release the certificates yesterday come from? Was it from the FIA? Was it a set date the teams knew? Or was it all a media rumor?

If it wasn't a media rumor (if it was officially a date the FIA set, or a date the FIA informed the teams informally about), then why was the delay last minute? Even with much less complex tasks you'd know if you won't meet a deadline. The issue would have been a lot less of an issue had they said they won't be releasing the info until Monday a day before the rumored deadline.

Right now, it all looks last minute hence the suspicion from among a big chunk of the fanbase.

The FIA have given a number of dates for the compliance certificates to be issued. And each one has slipped. This is another example of that, although it does feel like they are trying to avoid making any announcements ahead of the Japanese GP. I'd be amazed if they are actually doing any of the analysis over the weekend.

[Just_a_fan]

It is interesting to look back to earlier in the year when Horner was making a lot of noise about the budget cap and that he thought half of the grid would exceed the cap this year, etc.. I wouldn't be surprised if he knew back then that they were going to have an issue such as the one that is currently the subject of rumours and paddock gossip.

If nothing else, this subject is giving people something to talk about now that the season is effectively done and dusted.

[PlatinumZealot]

How many seconds is $1million worth? How many seconds of development did it take to keep in front? The punishment must be harsher than the gain you say.

I think 1M$ is like .03 points of downforce currently.

Fred Vassuer gave a figure and it was nothing like that. Something like $220,000 for a serious upgrade, and Toto gave a figure for this year's Merc spend on updgrades of 3.5 million. So be careful not to muddle other overhead costs with actual upgrade design and production costs. 1 million is more potent than you think.

If we useVasseur's estimate RedBull had unfairly gained the use of five serious upgrades AT LEAST... That could be anywhere from 0.5 seconds to 2 seconds.

[TimW]

I still have the less conspiratory view that it is simply a complex task to review this. With the cost cap teams have been diversifying their activities to other racing series and also outside racing. How do you properly separate the developments for different activities on a technical level, and properly allocate the cost to the different activities? E.g. a suspension department can explore different suspension concepts on the F1 budget, and use the lessons learned on their LMDh project. Or they can explore concepts for the LMDh project, and for much less budget quickly arrive at an optimum for the F1 project.

Diversifying brings a lot of benefits. There is a lot of synergy in developing for multiple racing series in parallel. It adds experience to the team and knowledge will flow between series. So a bigger player, active in multiple series, will still have a benefit over the smaller team who is only active in F1, even if both are on the same F1 budget. So diversification in a way is a loophole in the budget cap, even with proper accounting.

With the introduction of the budget cap there has also been a transition, and especially in a transition it is hard to quantify, and thus police, exactly what shall be allocated to what. So for now I buy the complexity excuse used by the FIA.

[selvam_e2002]

FIA waiting for Max to become WDC in Japan then they will announce it. Max missed in SG hence it postponed to Japan. IF Max could not win here, then the result will be postponed further.

[KeiKo403]

As previously communicated, there has been significant and unsubstantiated speculation and conjecture in relation to this matter, and the FIA reiterates that until it is finalised, no further information will be provided.

Does this that there is absolutely no truth to the rumours or that the rumours could be true but they’re not saying anything official yet?

It’s a $1m question I know. No pun intended!

[GrizzleBoy]

It is interesting to look back to earlier in the year when Horner was making a lot of noise about the budget cap and that he thought half of the grid would exceed the cap this year, etc.. I wouldn't be surprised if he knew back then that they were going to have an issue such as the one that is currently the subject of rumours and paddock gossip.

If nothing else, this subject is giving people something to talk about now that the season is effectively done and dusted.

Another thing that many may have forgotten was that earlier in the year Horner was already talking about winning the championship in a court room due to the cost cap and that he believes most teams will breach the 2022 cost cap due to rising prices etc ic the capital not raised significantly.

To quote Horner, "if the cost cap fails, it'll be gone forever".

Let's see.

[Just_a_fan]

FIA waiting for Max to become WDC in Japan then they will announce it. Max missed in SG hence it postponed to Japan. IF Max could not win here, then the result will be postponed further.

It does beg the questions: if the RB18 has been designed and developed over budget, should Max be allowed to win the title? Isn't the car effectively illegal and has been so for all of the season?

Now those are the bombshell questions.

[Just_a_fan]

It is interesting to look back to earlier in the year when Horner was making a lot of noise about the budget cap and that he thought half of the grid would exceed the cap this year, etc.. I wouldn't be surprised if he knew back then that they were going to have an issue such as the one that is currently the subject of rumours and paddock gossip.

If nothing else, this subject is giving people something to talk about now that the season is effectively done and dusted.

Another thing that many may have forgotten was that earlier in the year Horner was already talking about winning the championship in a court room due to the cost cap and that he believes most teams will breach the 2022 cost cap due to rising prices etc ic the capital not raised significantly.

Indeed so. All part of his campaign regarding the budget cap earlier in the year and, looking back now, it appears to have been an attempt to forestall the current situation.

There's going to be egg on faces on way or the other once we hear from the FIA on Monday (or whenever it actually comes out).

[chrisc90]

FIA waiting for Max to become WDC in Japan then they will announce it. Max missed in SG hence it postponed to Japan. IF Max could not win here, then the result will be postponed further.

It does beg the questions: if the RB18 has been designed and developed over budget, should Max be allowed to win the title? Isn't the car effectively illegal and has been so for all of the season?

Now those are the bombshell questions.

Exceeding the cap on 2021 would have no implications on the 22 season.

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