2021 Cost Cap Rumours and Speculation

[chrisc90]

Red Bull say they submitted their books and it was under the cost-cap. So something happened during the review process that converted their numbers into being above the cost cap. You do agree to this point, do you not?
So what forces and pressures, method of accounting, or calculation of spend, would have resulted in this discrepancy?

This is their official line:

"Our 2021 submission was below the cost cap limit, so we need to carefully review the FIA's findings as our belief remains that the relevant costs are under the 2021 cost cap amount."

What Redbull "belive" and what the FIA find to be "just and proper" are two differnt things.

Thats the next line of the FIA sitting down with the Team and working through it.


6.10 Once the Reporting Documentation has been reviewed, the Cost Cap Administration shall
conclude either:
(a) that an F1 Team has complied with these Financial Regulations, in which case the Cost
Cap Administration shall issue a compliance certificate to the applicable F1 Team; or
(b) that an F1 Team has not complied with these Financial Regulations, in which case the
Cost Cap Administration shall either:
(i) enter into an ABA pursuant to the terms of Article 6.28 below with the F1
Team concerned; or
(ii) refer the case to the Cost Cap Adjudication Panel for a hearing.
6.11 There shall be no right of appeal against any decision by the Cost Cap Administration to issue
a compliance certificate to an F1 Team.

Which then leads onto:

Accepted Breach Agreement
6.28 If the Cost Cap Administration determines that an F1 Team has committed a Procedural
Breach or a Minor Overspend Breach, the Cost Cap Administration may enter into an accepted
breach agreement (an "ABA") with the relevant F1 Team. There shall be no right of appeal in
respect of any decision by the Cost Cap Administration as to whether to enter into an ABA or
not.
6.29 An ABA may:
(a) set out certain obligations or conditions to be fulfilled or satisfied by the relevant F1
Team, either within a specified timeframe or on an ongoing basis; and/or
(b) provide for enhanced monitoring procedures to be put in place in respect of the F1
Team; and/or
(c) impose any Financial Penalty or Minor Sporting Penalties that would be available to
the Cost Cap Adjudication Panel pursuant to Article 9 in respect of the relevant type
of breach, save that the Cost Cap Administration shall not be entitled to impose the
Minor Sporting Penaltiesspecified in Articles 9.1(b)(ii), 9.1(b)(iii) and 9.1(b)(vi); and/or
(d) set out details of the costs to be borne by the F1 Team, calculated by reference to the
reasonable costs incurred by the Cost Cap Administration in connection with any
investigations into that F1 Team’s compliance with these Financial Regulations and/or
the preparation of an ABA


Still plenty more hoops to jump through before you even get to the penalty parts IMHO

[littlebigcat]

I was thinking that. Dont think it would go down well for Perez though. But they could just send 1 car there.

Teams are contractually obliged to attend races and are fined if they do not turn up to run both cars.

It was mentioned by Horner as a possibility in relationship to inflation issues: https://www.racefans.net/2022/05/26/red ... ay-rivals/

And as what we've seen today, what Horner says doesn't always resemble the truth.

[mendis]

Teams are contractually obliged to attend races and are fined if they do not turn up to run both cars.

It was mentioned by Horner as a possibility in relationship to inflation issues: https://www.racefans.net/2022/05/26/red ... ay-rivals/

And as what we've seen today, what Horner says doesn't always resemble the truth.

They are two different matters.

[RZS10]

Just got one question, so now its proven its just a minor breach so what will be the punishment that RB will be looking at? Less tunnel time etc or just some financial penalty.

"Just a minor breach" can carry the same penalties as a major one apart from a disqualification, it's not automatically just a fine as some suggested here, if the possible penalties did not include the removal of points for a 'minor' breach then they surely would not be listed.

viewtopic.php?p=1092393#p1092393

Red Bull say they submitted their books and it was under the cost-cap. So something happened during the review process that converted their numbers into being above the cost cap. You do agree to this point, do you not?
So what forces and pressures, method of accounting, or calculation of spend, would have resulted in this discrepancy?

This is their official line:

"Our 2021 submission was below the cost cap limit, so we need to carefully review the FIA's findings as our belief remains that the relevant costs are under the 2021 cost cap amount."

What Redbull "belive" and what the FIA find to be "just and proper" are two differnt things.

The most simple analogy i can come up with is a pupil solving a math problem, submitting the result thinking it's correct but in reality they're off because they did not include a few decimals - they might disagree and believe the result was right but the teacher and/or textbook will say otherwise, question is how far the result is off and whether the pupil can still get a passing grade after a discussion with the teacher.

[Unc1eM0nty]

Will we ever find out just how much the breach is (likely not); this would be short-sighted on the part of the FIA not to disclose publicly.

Surely they will have to confirm the amount of overspend, otherwise how can anyone be sure the punishment fits the crime ?

[07Patches]

Will we ever find out just how much the breach is (likely not); this would be short-sighted on the part of the FIA not to disclose publicly.

Surely they will have to confirm the amount of overspend, otherwise how can anyone be sure the punishment fits the crime ?

They should, unless they are to make an example of the 2 teams that broke the budget and punish them severely paling the figure into insignificance

[mafeotul]

Not claiming to be a financial specialist, nor a math genius. Most of talk is indeed speculative. We can’t know yet what actually happened. I suspect like many other things in the last two seasons, nothing will happen to RedBull, why would it? The love child protected of the FIA cannot do wrong it seems.
As a lover of this sport, most of my displeasure, disgust and frustration has been recently born because of one team. Two years in a row, this team has won, with either, human error, miscalculation, slight rule bending here, slight change to fit them there, “oh we didn’t understand the rules the same”.

Coincidence makes it they are walking the grid, making the most noise, and have continuous heavily biased decisions towards them. The sport has lost a lot since AD21 and will continue to do so until the big boys action this with the heavy duty arm that we all know they can.

If they don’t then congrats RedBull for winning the next 5,6 titles, because it isn’t about the best engineering feats, and drivers, its about who generates the most money through interactions and social media. Disgusting. And the fanboys will continue to support a cheating organisation, who has now won two in a row, despite the rules and regulations which have stood at the foundation of this sport before RedBull was a drink.

[Hoffman900]

I'm still shocked the FIA agree on 5% as a minor breach. $7.25mil is not insignificant.

That said, it's clear there is a difference in option between folks that worked as project managers in engineering, IT, accounting, etc. and those here who don't. Figuring out from the other side that RB was over spending isn't hard if you are Merc or Ferrari.

[ringo]

As it relates to libel by Ferrari and Mercedes, I suppose they are the ones now who do not have to worry.
For the individuals who came up with conspiracies on insider information etc, who have now shifted to trying to interpret how the FIA conducts audits and if they need to do over their math.. I think now that we have official communication, we do not resort to conspiracy theories.
Mercedes and Ferrari have nothing to do with Redbull's troubles.
The results were clearly delayed to allowed the team to focus on winning in Japan and to end this year's episode of F-1.
When the curtains have closed, then the sport will resume being a sport and apply its regulations as intended.

The breach is considerable, over 7 million, and an apt punishment must be meted out for it.

It will not be financial punishment, nor future handicaps. It's likely to be applied to the year in which the breach occurred, which is normal for most sports.

Constructors points will not impact redbull, as they have already stated it was not their goal. Their target was the driver's championship, and this also may have been their motivation to attempt to spend more than allowed and try to be smart about it by classifying the spends outside of what is policed.

It's anyone's guess how 7 million more can add performance to the car or operations. But the FIA may not even try to get into that detail as accountants can classify and juggle figures around. Even things like pit crew efficiency and design of wheel change equipment giving those 0.5 second advantages in pitstops was a material advantage that paid dividend repeatedly.

[Roo]

It seems two issues we're aware of aiding RB in 2021-2022 towards MV getting title 1 that the FIA were proactively controlling or monitoring. The longstanding damage is unknown.

As a child I once went to a circus to see a show, as an adult I understand the fake show.

[mwillems]

My prediction: A fine, say 10-20 million, and a 200 point dock in constructor points for last year and this year. FIA says "we punished" in order to save face, but not severely enough to change any outcome. RB still 2nd last year, and with this year being already 165 points ahead, and a fast car, they could realistically still win it this year.

I suspect they will just fine RB and the fine will be paid from next years budget, in the same way that Ferrari lost only future performance for their engine shenanigans. I expect the fine will be something along the lines of twice the overspend, once to cover the spend and once to claw back any advantage, but I think everyone knows it would have tipped them over the edge in the championship so they will not care.

Just enough to not harm anyone or too much but enough to say they did something and try to keep some of the sports reputation.

That's IF the fine comes out the 2022 budget. Which I dont think it is from looking at the sanctions list. As only a reduction of the cap can be carried over.

It's too late to take it from the 22 budget and not feasible, I was suggesting next year.

[djones]

Like the 2021 championship for Max didn't already have a huge asterisk next to it. Now it turns out to be powered by cheating the budget too.

Cheating that also helps in 2022 and 2023 as well.

That said if there are no retrospective disqualifications more fool on the other teams for not doing the same. Without disqualification or points deductions in 2021, it was basically a crime with zero punishment. Up to 7.5 million is ultra-significant in car development and unquestionably was enough to swing a close championship where your competitors are sticking to the rules.

[chrisc90]

I suspect they will just fine RB and the fine will be paid from next years budget, in the same way that Ferrari lost only future performance for their engine shenanigans. I expect the fine will be something along the lines of twice the overspend, once to cover the spend and once to claw back any advantage, but I think everyone knows it would have tipped them over the edge in the championship so they will not care.

Just enough to not harm anyone or too much but enough to say they did something and try to keep some of the sports reputation.

That's IF the fine comes out the 2022 budget. Which I dont think it is from looking at the sanctions list. As only a reduction of the cap can be carried over.

It's too late to take it from the 22 budget and not feasible, I was suggesting next year.

(vi) reduction of the Cost Cap,
provided that the penalty specified in Article 9.1(b)(vi) shall only be applied with
respect to the Full Year Reporting Period immediately following the date of the
imposition of the sanction (and subsequent Full Year Reporting Periods, where
applicable).

Yeah, think a 2023 budget drop is feasible as it would be the year after the sanction....which is in 2022.

[BlueCheetah66]

Realistically, I think the penalty should be a 10-15% reduction in the cost cap for 2 extra year, 2023 and 2024, and if they breach it in either of those years they are thrown out of the championship

[chrisc90]

Realistically, I think the penalty should be a 10-15% reduction in the cost cap for 2 extra year, 2023 and 2024, and if they breach it in either of those years they are thrown out of the championship

Probably a bit excessive.

It'll likely be a sliding scale of proportion.