2021 Cost Cap Rumours and Speculation

[chrisc90]

It amazes me how many posters are devising ways for Redbull to cheat the cost cap.

I dont think anyone is devising ways how they can beat the cap. Lets face it, the people at RB, their accountants, legal team will all know much more than ANYONE posting in this thread how the caps could be 'cheated' and how best to structure their business in order to reduce any taxes, maximise profit and whatever other benefits come with having multiple companies doing different areas in our overall business.

People in here are just looking at possible avenues of what could have happened. Theres a high chance the normal guy like you or me arent going to know the full story until a report is released, probably in many months to come.

Your comments are purely to snipe at people who are bringing a positive contribution to the thread, other than that, they simply serve no meaning or purpose to the nature of the threads discussion.

[Wouter]

It's interesting to look at Red Bull's accounts. For the year ending 31 December 2020, they had 59 employees. 2 in administration, 57 in racing and production. With a wage bill of just under £10m.

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Could you tell me where I can find those figures? I've googled, but can't find them. Do you have a link?

https://find-and-update.company-informa ... y/03120645

You can also go back to the companies house main page and find infomation on any company or person in charge of any company. for example Christian horner, Adrian Newey etc etc

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Thank you Chris, but I can't find the figures just-a-fan mentioned. I only found this, just 3 people.

https://find-and-update.company-informa ... 5/officers

[chrisc90]

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Could you tell me where I can find those figures? I've googled, but can't find them. Do you have a link?

https://find-and-update.company-informa ... y/03120645

You can also go back to the companies house main page and find infomation on any company or person in charge of any company. for example Christian horner, Adrian Newey etc etc

.
Thank you Chris, but I can't find the figures just-a-fan mentioned. I only found this, just 3 people.

https://find-and-update.company-informa ... 5/officers

Filing history, full accounts made up to 31st December 2021. Employee numbers and wage is on Page 18 of the same document. Hope that helps.

[Shakeman]

Presumably so they can claim they are a 'new' engine manufacturer and make use of the extra benefits associated with that.

I don't think it works like that. The FIA define the new manufacturer and that area is written pretty well. No loopholes and in their total discretion.

Who knows, there must be some reason for it. Effectively they will be a new manufacturer come the new era of engines, which is why there is probably a separate company for it. Or they want to throw tonnes of money at the '26 engine.

There will be a very good reason, same way you have the advanced technologies department too, which I guess is research and development into the carbon manufacturing process.

These big companies arent stupid. All of it could be done under the 1 'roof' or company brand, but there will be a lot of benefits etc that come with multiple companies. Just about every big corporation will do the same. And its perfectly legal to do so in the UK business world.

Its wayyyy more complicated than your average person off the streets will understand(and more than likely the FIA too) how these companies are set up and the benefits of having different sub-companies associated with it. I mean look how likes of star bucks, google etc all pay next to no tax in the UK....

I employed a builder to do some renovation work, over the course of the month I had about 5 different company vans parked outside. These companies were all satellite companies owned by the main builder. Tax efficiency I was told.

[dans79]

These big companies arent stupid. All of it could be done under the 1 'roof' or company brand, but there will be a lot of benefits etc that come with multiple companies. Just about every big corporation will do the same. And its perfectly legal to do so in the UK business world.

The issue is that doesn't mean anything when you sign up run a team in f1. You must abide by the rules that you signed up for and follow them even if you think the are wrong, or you will face the penalties of violating them.

for example yesterday someone suggested (here i believe) that red-bull might just clinch the championship and then set out the rest of the season to ensure they are under budget this year. I'm pretty sure they can't do that, because they are contracted to run the entire season.

This is old, but I'm pretty sure this still applies.
https://www.motorsportweek.com/2015/03/16/10014/

Meanwhile, their non-participation could have wider implications. Although the FIA deemed their explanation reasonable enough not to warrant punishment, Ecclestone may see it differently.

As each team is allowed to miss three events during the length of their contract, if deemed not to have taken part, it would be Manor’s fourth missed race which could see their £34 million ($50m) prize money withdrawn.

[chrisc90]

These big companies arent stupid. All of it could be done under the 1 'roof' or company brand, but there will be a lot of benefits etc that come with multiple companies. Just about every big corporation will do the same. And its perfectly legal to do so in the UK business world.

The issue is that doesn't mean anything when you sign up run a team in f1. You must abide by the rules that you signed up for and follow them even if you think the are wrong, or you will face the penalties of violating them.

for example yesterday someone suggested (here i believe) that red-bull might just clinch the championship and then set out the rest of the season to ensure they are under budget this year. I'm pretty sure they can't do that, because they are contracted to run the entire season.

This is old, but I'm pretty sure this still applies.
https://www.motorsportweek.com/2015/03/16/10014/

Meanwhile, their non-participation could have wider implications. Although the FIA deemed their explanation reasonable enough not to warrant punishment, Ecclestone may see it differently.

As each team is allowed to miss three events during the length of their contract, if deemed not to have taken part, it would be Manor’s fourth missed race which could see their £34 million ($50m) prize money withdrawn.

It depends how the costs are audited by the FIA and which companies, salaries, expenses etc etc fall into it. That’s exactly what RB appear to have fallen foul of here.

[Hammerfist]

They have significantly underspent if this is the case. 6 million unused would be big!

I find that highly unlikely and laughable, as that would mean huge amours of performance were left on the table!

If it was me a lot of heads would role if that much performance was left untapped!

Indeed. If we go back and examine some facts its just so unlikely they under spent.

-They brought more upgrades than any other team in 2021.
-They are still updating the car more tgan others in 2022.
-Horner has been pretty vocal this year in expressing his displeasure with the current cost cap and is effectively lobbying to have it increased.

So there is no way in hell they are spending less than other teams. Indeed a truly laughable take.

Also not including neweys salary and trying to say he had nothing to do with the car is nonsensical. The rb18 is widely seen as a newey creation. If rbr really tried to make it seem that he had nothing to do with the performance of the car then that was a dumb decision. But i dont necessarily believe that is tge case and its likely just wild speculation at this point. We need to hear the official truth.

[littlebigcat]

Just be clear, its the FIA's independent auditors who are saying that Red Bull overspent according to the rules set out, no the FIA itself.

[Just_a_fan]

Seems a weird choice though, it makes me wonder who their three nominated salary exclusions are from the cost cap?

Horner, presumably, would be one.
Marco is employed by RedBull (as opposed to RedBull F1 Team).

The company's directors are Mateschitz, Marko and Horner. On the account submitted to Companies House, that is.

[Just_a_fan]

https://find-and-update.company-informa ... y/03120645

You can also go back to the companies house main page and find infomation on any company or person in charge of any company. for example Christian horner, Adrian Newey etc etc

.
Thank you Chris, but I can't find the figures just-a-fan mentioned. I only found this, just 3 people.

https://find-and-update.company-informa ... 5/officers

Filing history, full accounts made up to 31st December 2021. Employee numbers and wage is on Page 18 of the same document. Hope that helps.

Actually it's the account up to 31 December 2020 that is visible. The one for 2021 isn't yet on there and is late being submitted to Companies House, presumably because it's being argued with the FIA - or someone didn't want it to be on public record yet. They need to be careful as they can be fined (a very, very, very small fine for a company of Red Bull's size) for late submission of accounts.

[Just_a_fan]

It amazes me how many posters are devising ways for Redbull to cheat the cost cap.

I dont think anyone is devising ways how they can beat the cap.

I bet they are. I bet every team is looking at things and trying to figure out what they can justifiably get removed from the cap and thus allow more to be spent on the car. It's no different to looking at your taxes and seeing what you are allowed to offset in order to reduce your tax liabilities. Any finance team worth their salt will be doing that every day/week/month/year.

[PlatinumZealot]

Could be that they may have come in under by $6m on purpose as a precaution so that if the FIA added Neweys salary they’d only commit a minor breach?

A safe way of testing their strategy in year 1, if it works in year 1 then going that way too for more staff from year 2 onwards and you’re onto a winner.

I would term that as utterly stupid. If FIA has made allowance for 3 top paid to be excluded, it makes absolute sense to put him in that group. Unless they have screwed his employment contract where FIA deems it a consultant position, they have done a pretty bad job of using their funds.

An easy work around is to hire newey in RedBull technologies.

[ispano6]

if he is doing any kind of design/development/management/mentoring, he is is benefiting the company.

It doesn't matter if it's direct, indirect, work that effects the near future, or work that affects the company 5 years down the rode.

Nice try but no. He was on gardening-leave. That usually means you aren't doing anything important.

[e30ernest]

if he is doing any kind of design/development/management/mentoring, he is is benefiting the company.

It doesn't matter if it's direct, indirect, work that effects the near future, or work that affects the company 5 years down the rode.

Nice try but no. He was on gardening-leave. That usually means you aren't doing anything important.

That would still be the team's issue though isn't it? They have him on employment so if they fail to utilize him (and his cost) it's their decision. However, this is done to ensure other teams don't get him right away so it is still a beneficial cost to the team.

[ispano6]

You saw his billable invoices? You’re out of your depth, chief.

Here I am adding a valid assumption and all you can say is I'm out of my depth? As another has kindly stated, as I assumed most here already knew, Fallows was moved off all involvement with the F1 team, as is typical with most gardening-leave type situations. I've pointed out that Wolff's salary is $26m but let's assume that his is Mercedes' top salary that is excluded, and given Allison's own words that Wolff found a way for him contribute to the team but not be CTO, well, I assume any team can do that. I'll add in a conspiracy theory for you though, just to make it interesting- what's Sheila-Ann Rao's involvement in all of this