2021 Cost Cap Rumours and Speculation

[dans79]

Here is something for the conspiracy theorists!

https://thejudge13.com/2022/10/20/horne ... the-event/

Further Red Bull allege that the FIA changed the interpretation on the cost of “unused parts” on June 16 this season. Red Bull clearly produced parts they didn’t;t use and believe they should not be part of their budget allocation.

nterestingly the change in interpretation of unused parts came just 2 weeks following Shaila-Ann Rao leaving Mercedes as a legal advisor and joining the FIA.

Mercedes had recruited ex-Red Bull employees from 2021 and the suggestion is Rao knew of allegations made by them about their former team and influenced the financial regulations process.

[dans79]

I should add that if it is some form of whistleblower, the public may never learn who it was.

From article 6.18 of the financial regulations.

These Immunity Conditions are repeated in the document granting immunity. The person
benefiting from the immunity may, depending on the circumstances, be permitted to testify
in a manner which safeguards their anonymity.

[codetower]

Here is something for the conspiracy theorists!

https://thejudge13.com/2022/10/20/horne ... the-event/

Further Red Bull allege that the FIA changed the interpretation on the cost of “unused parts” on June 16 this season. Red Bull clearly produced parts they didn’t;t use and believe they should not be part of their budget allocation.

Can those parts be used the following year? If I recall, there were rumors of RB introducing a lighter chassis this year as well, but decided against using it. Can this be introduced next year and NOT count towards the budget cap?

I should add that if it is some form of whistleblower, the public may never learn who it was.

To be honest, no one outside of RB will care who the whistleblower is. No one cared who blew the whistle on Ferrari regarding fuel-gate.

[chrisc90]

I think changing the rules on un-used parts through the season is a bit shady to be fair. Something like that should wait until the next set of regulations. If of course there is truth in that statement.

[Wil992]

I think changing the rules on un-used parts through the season is a bit shady to be fair. Something like that should wait until the next set of regulations. If of course there is truth in that statement.

In general I’d agree with this, you set the rules for the season. I’d imagine if this is the case then it wasn’t framed by the fia as a “change”, but as a clarification, which muddies the waters a bit.

[littlebigcat]

Here is something for the conspiracy theorists!

https://thejudge13.com/2022/10/20/horne ... the-event/

Further Red Bull allege that the FIA changed the interpretation on the cost of “unused parts” on June 16 this season. Red Bull clearly produced parts they didn’t;t use and believe they should not be part of their budget allocation.

But its about sick pay...no catering...no Adrian Newey...no wait unused parts.

[littlebigcat]

Amendment to the definition of "Current Cars":
"Current Cars" means cars which were designed and built in order to comply with the Technical Regulations either in force during the applicable Reporting Period or in force during the Championship season immediately following the applicable Reporting Period.

I forgot to reply to this because the topic was locked at the time, the Amendment only applies to the reporting period starting next season. So they cannot stockpile this season for next.

[Zynerji]

I think changing the rules on un-used parts through the season is a bit shady to be fair. Something like that should wait until the next set of regulations. If of course there is truth in that statement.

In general I’d agree with this, you set the rules for the season. I’d imagine if this is the case then it wasn’t framed by the fia as a “change”, but as a clarification, which muddies the waters a bit.

The entire cost-cap concept was muddy from the beginning.

They could have just capped R&D, utilities cost, and left production and labor alone.

Unless you are going to put a draft of talent in place, you cannot include labor costs.

I would say the best way to track labor would be to not hire people on salary, but comissions. IE: engineer 1 negotiates a salary of 0.015% of the teams WCC earnings. Teams then pay a 12 month draw (weekly salary) with a final settle up check at the end of the season. Obviously the draw would be calculated to not incur a charge back (smaller weekly pay), and pay out the difference at the end in one large check. I personally use this model for my own work.

[Zynerji]

Amendment to the definition of "Current Cars":
"Current Cars" means cars which were designed and built in order to comply with the Technical Regulations either in force during the applicable Reporting Period or in force during the Championship season immediately following the applicable Reporting Period.

I forgot to reply to this because the topic was locked at the time, the Amendment only applies to the reporting period starting next season. So they cannot stockpile this season for next.

You could introduce an updated 2022 chassis on the 2022 budget. Then use that for 2023 at zero cost to 2023 budget.

I suggested this month's ago as to a way for backmarkers to catch up in other areas for 2023.

[dans79]

here are the 2 relevant versions of the cost cap rules.

April 29th, 2022 (issue 10)
https://www.fia.com/sites/default/files ... -04-29.pdf

July 19th 2022 (issue 11)
https://www.fia.com/sites/default/files ... iss.11.pdf


the word "unused" only shows up twice in each document, and everything around them was identical as far as i can tell.

[littlebigcat]

You could introduce an updated 2022 chassis on the 2022 budget. Then use that for 2023 at zero cost to 2023 budget.

I suggested this month's ago as to a way for backmarkers to catch up in other areas for 2023.

Yes only if you use it in the 2022 period.

[littlebigcat]

here are the 2 relevant versions of the cost cap rules.

April 29th, 2022 (issue 10)
https://www.fia.com/sites/default/files ... -04-29.pdf

July 19th 2022 (issue 11)
https://www.fia.com/sites/default/files ... iss.11.pdf


the word "unused" only shows up twice in each document, and everything around them was identical as far as i can tell.

I think 2021 regs would be relevant.

April 30th 2021 (Issue 5)
https://www.fia.com/sites/default/files ... -04-30.pdf

June 28th 2021 (Issue 6)
https://www.fia.com/sites/default/files ... -06-28.pdf

[dans79]

You could introduce an updated 2022 chassis on the 2022 budget. Then use that for 2023 at zero cost to 2023 budget.

I suggested this month's ago as to a way for backmarkers to catch up in other areas for 2023.

Having had time to dig through the financial rules that's not correct.

article 4.1 f

If the accounting treatment of Inventories within Total Costs of the Reporting
Group varies from the following requirements, the F1 Team must make an
adjustment in the calculation of Relevant Costs to reflect these requirements:

(i) the cost of an item of Used Inventories must be recognised in full as
an expense in the Full Year Reporting Period in which it was first used
in respect of the F1 Team’s F1 Cars;

(ii) the cost of an item of Unused Inventories must not be recognised in
the Reporting Period; and

(iii) the cost of an item of Redundant Inventories (which has not been
recognised in a previous Full Year Reporting Period pursuant to any
other provision of this Article 4.1(f)(i)) must be recognised in full as an
expense in the Reporting Period. Where practicable, the identification
of Redundant Inventories must be carried out on an item-by-item
basis. Otherwise, groups of similar items may be considered together

[dans79]

I think 2021 regs would be relevant.

April 30th 2021 (Issue 5)
https://www.fia.com/sites/default/files ... -04-30.pdf

June 28th 2021 (Issue 6)
https://www.fia.com/sites/default/files ... -06-28.pdf

They still look the same to me!

[Zynerji]

You could introduce an updated 2022 chassis on the 2022 budget. Then use that for 2023 at zero cost to 2023 budget.

I suggested this month's ago as to a way for backmarkers to catch up in other areas for 2023.

Having had time to dig through the financial rules that's not correct.

article 4.1 f

If the accounting treatment of Inventories within Total Costs of the Reporting
Group varies from the following requirements, the F1 Team must make an
adjustment in the calculation of Relevant Costs to reflect these requirements:

(i) the cost of an item of Used Inventories must be recognised in full as
an expense in the Full Year Reporting Period in which it was first used
in respect of the F1 Team’s F1 Cars;

(ii) the cost of an item of Unused Inventories must not be recognised in
the Reporting Period; and

(iii) the cost of an item of Redundant Inventories (which has not been
recognised in a previous Full Year Reporting Period pursuant to any
other provision of this Article 4.1(f)(i)) must be recognised in full as an
expense in the Reporting Period. Where practicable, the identification
of Redundant Inventories must be carried out on an item-by-item
basis. Otherwise, groups of similar items may be considered together

That reads that if they brought an updated chassis to both cars in the last race of 2022, and count it on 2022 budgets, at least the cost of the 2 single race-used chassis would not be counted in 2023. That can save like 1m off the top.