2021 Cost Cap Rumours and Speculation

[Alvareth]

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.

Not excessive enough in my opinion. If the punishment is not harsh then it was not only worth it, it will be worth it for other teams too.

10-15% reduction in their cost cap for 2023 and 2024 in exchange for certainly one, maybe two championships? Cheap at twice the price.

Cost cap reduction (9b vi) is not possible in an ABA agreement, it is excluded as an option, just like driver (9b ii) and constructor point reduction (9b iii).

So to get these penalties the ABA has not been accepted, or the Cost Cap Administration did not start the ABA procedure…

Quote: “save that the Cost Cap Administration shall not be entitled to impose the Minor Sporting Penalties specified in Articles 9.1(b)(ii), 9.1(b)(iii) and 9.1(b)(vi);”

[mwillems]

If the punishment has no teeth, then all the other teams will decide a minor breach is required to compete

The FIA could easily say that now everyone knows, no more chances - this one was a marker. I wouldn't assume what is possible.

That would be entirely unacceptable because any overspend during 2021 will have had a beneficial effect on the development of the 2022 car and thus also give a head start on subsequent cars that are developed from it.

There can be no "that was just a first go and doesn't count" approach. Not unless the FIA wants to see themselves either in court or facing several other teams saying "we're not going to pay any attention to you any more and will also spend over the limit in order to catch up".

I'm not suggesting there will be no punishment, just that there could be no teeth from the FIA and a pointless penalty, partly on the basis that this was everyones first go. but if this happens again to anyone then the punishments will become more serious.

From your response I fear you have more faith in the FIA than I do, I think this will be whitewashed.

[mwillems]

Well, the results are in & those named in the rumours are the ones that have fallen foul of the auditing process. One looks as though they are preparing to appeal.

The punishment should be suitable to the extent of the breach, but if the findings are upheld at the appeal the punishment should be increased substantially.

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.

These budget rules need to be enforced, but the FIA also really needs to get a grip on information leakage.

How long does the current Concorde Agreement have left to run?

It certainly wouldn't be short sighted if it ignited the subject of the 2021 drivers champion again, I suspect that the FIA will today take any hit they need to to ensure they do not go back over that any more than they have to. And given how accurate the rumours were, one wonders if the final numbers were massaged down to avoid any need to answer the question of the 21 champion.

I do hope the numbers are leaked, it's about time there was some oversight and transparency at the FIA, even if it came through non authorised channels.

The whole cost cap is a farce anyway... and transparency??
Replacement ICE are not in the cap and 1st engine is a 10 place grid penalty and every additional ICE is just a 5 place grid penalty. Mercedes just casually replaced Hamilton's ICE last season with reliability woes excuse, but they suddenly ran 10s/lap (exaggerated of course) quicker than RBR and Ferrari. They spend millions more on ICE replacements than RBR overspent the cap.
And how do you explain Mercedes complaining about porpoising and literally 1 day after the FIA allowed a floor change, Mercedes comes with an upgraded floor! (Canada this year).

It's all a --- joke...

All teams have been using the engine reliability rules to bring updates over the past few years, as for the spend on the engines they haven't broken any rules by it either. All teams push the limits for sure, problem for me is the RB have always pushed the limits harder and in my opinion gone too far, both the team and the driver.

[Just_a_fan]

The FIA could easily say that now everyone knows, no more chances - this one was a marker. I wouldn't assume what is possible.

That would be entirely unacceptable because any overspend during 2021 will have had a beneficial effect on the development of the 2022 car and thus also give a head start on subsequent cars that are developed from it.

There can be no "that was just a first go and doesn't count" approach. Not unless the FIA wants to see themselves either in court or facing several other teams saying "we're not going to pay any attention to you any more and will also spend over the limit in order to catch up".

I'm not suggesting there will be no punishment, just that there could be no teeth from the FIA and a pointless penalty, partly on the basis that this was everyones first go. but if this happens again to anyone then the punishments will become more serious.

From your response I fear you have more faith in the FIA than I do, I think this will be whitewashed.

Oh, no, I think Red Bull will get away with a minor slap on the wrists and will carry the benefit of their overspend in to the next season or even two.

[Oleo]

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

The penalty can be applied to 2021. I don't see the justification reducing their cost cap by 15% in two years.
At most 2021 and 2022 can be punished. 2022 I feel can be mostly symbolic. Because the team can push to win the last set of races in preparation to take the blow of being disqualified from a few races in 2022. Max should still be able to keep his 2022 championship and redbull their constructors.
But the FIA cannot understate the intent to cheat. I think that stands out more than anything. The team literally intended to have a car designed beyond the limits of the regulations to compete with cars that were within the rules. This is a massive sporting and ethical tragedy. It cannot be overlooked.
Nonetheless the team should not be punished beyond 2022 I feel. It will really damage their reputation if we hear about this team being punished in 2024. My opinion anyway.

Realistically they probably were within their budget near the end of 2021 according to their accounting, realised they were and spent money appropiately up to the budget limit on next years car in the closing months. Now 11 months later it turns out they spent a little bit more then they thought, either because they thought some costs didnt apply to budget when they did or for whatever reason. So with hindsight they should have spent a little less on 2022. There is a very low chance that the slight overspending had any influence on the 2021 outcome. If they'd realise in 2021, they were about to go over budget, they probably would have spent less on 2022.

Point reduction in 2021 would be silly, but sure if they have 2 million overspent, deduct 2/114 million % in points from both drivers and fine their 2022 budget with double the amount they overspent.

[Quantum]

He didn't say anything that you have mentioned there in the video that you quoted.

Ok Mendis, are you saying he didn't say those words?
Or just in that particular video?

I am saying, Horner/Red Bull have maintained their position. He didn't lie. If he/RB are maintaining their position of underspend, then he is right to feel hurt about others trying to malign Red Bull's reputation. I haven't see his statement, threatening legal action, unless you are quoting some other statement of his outside of that video.

I am primarily a Ferrari/Leclerc fan, who also happens to like RB/Max and Lewis. I hate Mercedes particularly for this year. This is a very intriguing case for me to keep debating on. I am looking at facts, rationality and where the lose ends are. Also how the rumours/hate has muddled it so distastefully.

He actually is quoted as saying what I wrote.
If you defend yourself against unfounded nonsense using honest statements you have grounds to say what Horner said.

If however you have cheated and start casting aspersions to your rivals answers to journalists questions, and are then found to have cheated, I'm afraid that's just untenable dishonesty.

Defend all you like, it's indefensible in my view.

[chrisc90]

I feel they will keep the punishments in 2021 and apply a very light slap for 2022.

By grey areas do you mean the fiscal ones or technical related to work on the car?

.....

Fiscal grey areas I presume that Horner was referencing in his interviews. There is reports of him mentioning there being clarifications issued after the reporting deadline. So there is clearly a LOT of area that is grey in the rules.

Likely it will be investigated where budget was spent. Teams will go this is what we spent in the areas that was clearly defined, and this is what was spent in the grey area section, or areas that were clarified after the submission of the reports.
Its going to come down to grey areas and what areas that money was spent on that could well of been interpreted as outside the budget. At present, there's no guarantees that any 'extra' money was spent on the car or staffing use to develop the car.

[chrisc90]

Ok Mendis, are you saying he didn't say those words?
Or just in that particular video?

I am saying, Horner/Red Bull have maintained their position. He didn't lie. If he/RB are maintaining their position of underspend, then he is right to feel hurt about others trying to malign Red Bull's reputation. I haven't see his statement, threatening legal action, unless you are quoting some other statement of his outside of that video.

I am primarily a Ferrari/Leclerc fan, who also happens to like RB/Max and Lewis. I hate Mercedes particularly for this year. This is a very intriguing case for me to keep debating on. I am looking at facts, rationality and where the lose ends are. Also how the rumours/hate has muddled it so distastefully.

He actually is quoted as saying what I wrote.
If you defend yourself against unfounded nonsense using honest statements you have grounds to say what Horner said.

If however you have cheated and start casting aspersions to your rivals answers to journalists questions, and are then found to have cheated, I'm afraid that's just untenable dishonesty.

Defend all you like, it's indefensible in my view.

Its totally defensible if that overspend is related to a interpretation of the rules or a grey area that isnt set out in paper in the rule book, or has been previously clarified and distributed to all teams.

Realistically, this is what its going to boil down to...a grey area in the rule book, which is why RB submitted a document under the cap, but has been flagged as being overbudget. That points to a grey area/interpretation of the rules in my opinion.

All RB need to do is prove that their outcome isnt defined in the rules, or the FIA dont allow it then its a grey area....and what can you do about a grey area in the rule book.

[ringo]

The FIA could easily say that now everyone knows, no more chances - this one was a marker. I wouldn't assume what is possible.

That would be entirely unacceptable because any overspend during 2021 will have had a beneficial effect on the development of the 2022 car and thus also give a head start on subsequent cars that are developed from it.

There can be no "that was just a first go and doesn't count" approach. Not unless the FIA wants to see themselves either in court or facing several other teams saying "we're not going to pay any attention to you any more and will also spend over the limit in order to catch up".

I'm not suggesting there will be no punishment, just that there could be no teeth from the FIA and a pointless penalty, partly on the basis that this was everyones first go. but if this happens again to anyone then the punishments will become more serious.

From your response I fear you have more faith in the FIA than I do, I think this will be whitewashed.

Was 2020 the first budget cap year and not 2021?

[langedweil]

That would be entirely unacceptable because any overspend during 2021 will have had a beneficial effect on the development of the 2022 car and thus also give a head start on subsequent cars that are developed from it.

That's as much a possibility as it is an uncertainty ..
Good luck in proving that.

[Quantum]

I am saying, Horner/Red Bull have maintained their position. He didn't lie. If he/RB are maintaining their position of underspend, then he is right to feel hurt about others trying to malign Red Bull's reputation. I haven't see his statement, threatening legal action, unless you are quoting some other statement of his outside of that video.

I am primarily a Ferrari/Leclerc fan, who also happens to like RB/Max and Lewis. I hate Mercedes particularly for this year. This is a very intriguing case for me to keep debating on. I am looking at facts, rationality and where the lose ends are. Also how the rumours/hate has muddled it so distastefully.

He actually is quoted as saying what I wrote.
If you defend yourself against unfounded nonsense using honest statements you have grounds to say what Horner said.

If however you have cheated and start casting aspersions to your rivals answers to journalists questions, and are then found to have cheated, I'm afraid that's just untenable dishonesty.

Defend all you like, it's indefensible in my view.

Its totally defensible if that overspend is related to a interpretation of the rules or a grey area that isnt set out in paper in the rule book, or has been previously clarified and distributed to all teams.

Realistically, this is what its going to boil down to...a grey area in the rule book, which is why RB submitted a document under the cap, but has been flagged as being overbudget. That points to a grey area/interpretation of the rules in my opinion.

All RB need to do is prove that their outcome isnt defined in the rules, or the FIA dont allow it then its a grey area....and what can you do about a grey area in the rule book.

If its clear as day for 9 teams to not go over the budget, with only 1 of 10 teams going over the permitted 145m, and the FIA finding wrongdoing, there is no grey area.
(Aston and Williams are procedural breaches)

That grey area exists hypothetically in a defence mechanism your employing to no avail.

The facts are the FIA have found them to have breached the rules.
If you employ a defensive strategy of what is and isn't allowed after 2 years of threshing out a deal on budgets the budget cap is dead thanks to Red bull.
Just like the RRA agreement over a decade ago. Also thanks to Red Bull.

[n_anirudh]

So, who leaked this info (the two teams which FIA allege to have breached the cost cap) to the media two weeks ago? Where did this leak come from?

[ME4ME]

IMO people are reading way waay too much into this.
This won't be settled for weeks. So just relax. We can't know for sure if RBR is quilty of anything at all until then.

Financials can be manipulated, filtered and assigned in so many different ways. It doesn't surprise me at all that a team has calcuated a different outcome than the FIA.

Now they'll have to go over it together, find the differences and let the lawyers decise what the regulations actually say, if anything at all. There might be both grey-zones, different interpertations as well as unspecified areas and complete loop-holes which might come to light.

Given it's the first time with the budget cap, I think its just as likely that the FIA has got it wrong than that Red Bull got it wrong.

[n_anirudh]

Well, they may enter into a deal with the FIA, like a certain team did in 2019 and that closed the matter.

They would have had their own auditors look at this in Feb March and then a 6 plus months of negotiation/clarification with FIA.

[ringo]

I feel they will keep the punishments in 2021 and apply a very light slap for 2022.

By grey areas do you mean the fiscal ones or technical related to work on the car?

.....

Fiscal grey areas I presume that Horner was referencing in his interviews. There is reports of him mentioning there being clarifications issued after the reporting deadline. So there is clearly a LOT of area that is grey in the rules.

Likely it will be investigated where budget was spent. Teams will go this is what we spent in the areas that was clearly defined, and this is what was spent in the grey area section, or areas that were clarified after the submission of the reports.
Its going to come down to grey areas and what areas that money was spent on that could well of been interpreted as outside the budget. At present, there's no guarantees that any 'extra' money was spent on the car or staffing use to develop the car.

I think the time for investigation was over. Once an audit has been done I am sure prior to issuing certificates those who were sampled and interviewed were questioned rigorously for clarification. This would be the post reporting deadline you speak of. That time has passed. Thereafter the auditor makes recommendations for potential infractions that can be corrected. The major ones now that cannot be corrected remain and then the official certificate is issued.

Also why Redbull may not have forgiveness to clarify is that during 2021, the teams were free to consult each and every time with the FIA that they wanted to spend on a budget item. They really have no excuse for over spending. Everything was made clear to them, and if it was not, the FIA had an open door policy to have someone meet with the team and sit down with them and guide which spend was okay and which was not okay.
So what I gather, is that the team intentionally hid some spends from the FIA and did not bother to consult during the 2021 year. The mistake they made is that the FIA had some really good auditors, possibly much more competent than the accountants and internal auditors redbull have on payroll to help them shift spends.

So to conclude, there really was no grey area. If a grey area was suspected the team had the freedom to call the FIA and make that grey area white or black. They chose not to because they felt the could walk around the regs.

What redbull may do now.. is the appeal the FIA auditors themselves and not the findings, or even try to negotiate the punishment.