Red Bull broke the rules to win Verstappen's title.  A penalty can make or break F1's golden era

Red Bull broke the rules to win Verstappen’s title. A penalty can make or break F1’s golden era

More than 10 days of heated speculation were finally put to rest this week when the FIA ​​published the findings of its audit of the 10 Formula 1 teams’ spending over last season.

Only eight teams were found to be operating under the cost cap.

Red Bull Racing and Aston Martin were found to be in breach of the rules.

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Aston Martin’s transgression was procedural – meaning some of the budget cap processes were incorrect, but crucially it stayed within the $145 million (AU$232 million; sport operates in US dollars) limit. Accounting and reporting protocols are said to be the core of the crime.

However, Red Bull Racing – despite protests that it was under the limit and implicit threats from Christian Horner to consider suing Toto Wolff for defamation over the matter – was found to have exceeded the cost limit when propelling Max Verstappen to last year’s championship. . It was also found that there was a violation of procedural law.

With one wave of speculation finally over, another will now begin, with what will be the next FIA event firmly in the spotlight.

Race winner and 2022 F1 World Champion Max Verstappen of the Netherlands and Oracle Red Bull Racing celebrates with his team after the F1 Japanese Grand Prix at Suzuka International Racing Course on October 9, 2022 in Suzuka, Japan. (Photo by Mark Thompson/Getty Images)Source: Getty Images

WHAT DID RED BULL RACING DO?

The FIA ​​found that Red Bull Racing had committed a “minor” breach of the cost cap of less than 5 percent – up to US$7.25 million (A$11.6 million).

It did not disclose how much the team spent despite proclamations that for the first time it would apply maximum transparency in enforcing these rules.

For the sake of rules integrity, we have to assume that the governing body will eventually disclose how much Red Bull Racing spent over and above costs – whether it was $20 million or $7.249 million.

Furthermore, it is unclear whether the FIA ​​would be able to identify a specific area in which additional money was spent if there is no baseline amount of expenditure on any given item.

This is a crucial point as Red Bull Racing appears to have reported last week that its overspending was related to ancillary staff costs such as meals and not performance-related expenses such as car development.

It is possible that there was some dispute about certain categories of expenditure, but it is impossible to separate, say, canteen expenditure from expenditure on new aerodynamic components, because it all comes from the same pot.

For example, if employee meal costs were $X, the team could save that money by not developing new auto parts. Otherwise, the team was able to spend more money on the car because they didn’t take into account how expensive it was to buy sandwiches.

Red Bull Racing may have made a legitimate mistake in how they accounted for their expenses, but a cap is a cap regardless of the excuse for breaking it.

Max Verstappen after winning the 2021 World Championship. (Photo by Bryn Lennon/Getty Images)Source: Getty Images

IS A MINOR VIOLATION SO SERIOUS?

A “minor violation” of up to 5 percent doesn’t sound like much, but $7.25 million is a lot of money at the end of development.

“I think the word (‘minor’) is probably not the right word because if you spend $5 million more and still break minor rules, it still has an impact on the championship,” Mercedes boss Toto Wolff said. the allegations were first made public in Singapore.

“We know for a fact that we spend $3.5 million a year on the parts we bring to the car. Then you can say what a difference spending an extra $500,000 makes. It would make a big difference.

“Every higher spend has a performance advantage.”

Lewis Hamilton said in Japan that even $1 million would bring a significant amount of performance.

“I remember Silverstone. [last year] we have the latest update. I remember it was almost 0.3 seconds… and I’m pretty sure it cost less than $1 million,” he said.

“It’s such an integral part of the development plant.” If we had to spend another half a million, we would be in a different position than some of the following plants.”

Both Wolff and Hamilton appear to be referring to manufacturing costs rather than charging for parts research and development, but they illustrate how significant a “minor” breach could be.

In other words, Ferrari compared a 5% cost overrun to the equivalent of the labor costs for an additional 70 engineers.

“Seventy engineers will give you a lot of lap time,” said Ferrari race director Laurent Mekies.

“Therefore, we are very much looking forward to a transparent and rigorous approach.”

Verstappen’s anti-climactic championship! | 00:35

WHAT HAPPENS NEXT?

Red Bull Racing stands by its protestations that it had no idea it had been found in breach despite widespread rumors and numerous delays in releasing FIA certification data after regular consultations with all teams’ financial officers.

“We are surprised and disappointed to note the FIA’s finding of a ‘minor breach of financial regulations in excessive spending’,” the statement said. “Our submission for 2021 was below the cost cap limit, so we need to carefully review the FIA’s findings as we still believe the relevant costs are below the 2021 cap.

“Despite the conjecture and the attitudes of others, there is of course a regulatory process with the FIA ​​which we will respectfully follow while we consider all the options available to us.”

This process involves several different paths forward.

One of them is that the Red Bull Racing cops who overdid it and accepted a penalty from the FIA. It has been suggested that if the team were so inclined, this week’s announcement of the breach would have been accompanied by a penalty and an admission of guilt.

If Red Bull Racing intends to stick to its guns, that its accounting was correct and that it came under the cost cap last year, it can take the matter to a specially created tribunal, which will then decide.

If it disagrees with the tribunal’s findings, it can take the matter to the FIA’s International Court of Appeal, motorsport’s highest appellate body. The matter could then move to the Court of Arbitration for Sport.

The same applies to Aston Martin, although procedural breaches are punishable by fines, so the team is unlikely to pursue the matter further.

As Red Bull Racing only committed a “minor” infringement rather than a “serious” one, it cannot be kicked out of the championship or banned from racing and will not be subject to any mandatory penalty.

However, the FIA ​​can still dock constructors’ or drivers’ championship points from the previous season. With Max Verstappen beating Lewis Hamilton to the title by just eight points, a reversal of the title result is still a live possibility, although considered unlikely.

The team may also be hit with a reduced cost cap and development allowance for future seasons to try to redress the advantage they gained from overspending last year, which has been reflected in the development of this year’s car.

It could also be imposed by a fine or a simple reprimand, but neither option would satisfy the sport, as both would be ridiculously lenient for a team backed by the financial might of energy drink company Red Bull.

It would also set a precedent where teams only charge the fine as a cost of doing business, giving the green light for the wealthiest teams in particular to go over the cap on a regular basis.

Such a weak penalty would immediately cause the cost cap consensus to collapse and plunge the sport back into its bad old days of financial instability and an arms race.

But deciding on a penalty that potentially extends into one of the most contested championships in generations – and just after Verstappen won his second title – will not be easy.

The most important thing the FIA ​​needs to do is make the process transparent. Confidence in the cost cap and its management is absolutely critical to its success. Being seen as anything less than entirely promising can be fatal.

It’s a test not only for the rules but also for the governing body itself, and Formula 1 must pass both.

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