Formula 1 cost cap breach

[MontyB1]

If anyone wants to look at the accounts the links are below. What’s interesting though is that Redbull is late or at least they appear to be. So if the headlines do hit tomorrow, the it’s hard to cross examine them; unless that is why they have been tweaking them right up to the last minute to fit a narrative I wonder…..

Mercedes F1 Accounts Filling

RedBull Racing accounts Filling

By all means have a look at the partnering engine accounts, didn’t Check if RedBull are late on those as well.

[GuidoK]

I don't see any spending numbers from this year.
Toto's claims were about this year weren't they?
Normally the figures are presented after the year has passed.
So I think these links are of no use?

[MontyB1]

The figures for publish accounts are always for the last financial year so the issue and these accounts relate to 2021 and the 21 championship. The certificates being discussed are all related to the 2021 season. Toto and Christian have all talked about last year. Can’t see last years RedBull numbers as they aren’t publish yet which is a bit late….

We will have the same debate this time next year for this year / championship.

[MontyB1]

Well the news is in and....

Redbull and Aston Martin have breached F1 cost cap rules of the 2021 season

No news on any sanctions and they aren't stating by how much. Rebulls account are now officially late and they will get a fine for that but its very minor in cost terms but does make it hard to see by how much they 'might' have overspent that is very convenient of the.

2021 / 2022 seasons tainted?

[3798j]

So do we need another asterisk?...and was Horner given misinformation by RB accounting...or did he give the misinformation on his own? More questions than answers.

[HeelToeShift]

Originally Posted by MontyB1

Well the news is in and....

Redbull and Aston Martin have breached F1 cost cap rules of the 2021 season

No news on any sanctions and they aren't stating by how much. Rebulls account are now officially late and they will get a fine for that but its very minor in cost terms but does make it hard to see by how much they 'might' have overspent that is very convenient of the.

2021 / 2022 seasons tainted?

Nothing tainted at all - minor breach is just that, minor. - last I read was that RB was over by $150,000 If anything, it was quite smart and would say well done strategy for RB. Lord knows MB needed to spend ~$500+MM (10s of millions more than RB or Ferrari) to win in previous years and are just mad they can't spent their way anymore and their years of buying off the FIA seem to be outnumbered too.

The FIA writes rules that are often ambiguous and obtuse. If they don't want to give teams a buffer on their budget they should not allow for up to 5% variance on the "budget".

[3798j]

"If anything, it was quite smart and would say well done strategy for RB."

Now we have "fans" applauding the tactic.
Can't help but think back to when Pro Wrestling admitted matches were "fixed"...the "sport" actually gained in popularity.

[MontyB1]

Originally Posted by HeelToeShift

Nothing tainted at all - minor breach is just that, minor. - last I read was that RB was over by $150,000 If anything, it was quite smart and would say well done strategy for RB. Lord knows MB needed to spend ~$500+MM (10s of millions more than RB or Ferrari) to win in previous years and are just mad they can't spent their way anymore and their years of buying off the FIA seem to be outnumbered too.

The FIA writes rules that are often ambiguous and obtuse. If they don't want to give teams a buffer on their budget they should not allow for up to 5% variance on the "budget".

Was 54 pages of detail on how to comply with the cost cap not enough for Redbull to follow then is that what you are saying? But most other teams managed fine, OK then.

[HeelToeShift]

Originally Posted by MontyB1

Was 54 pages of detail on how to comply with the cost cap not enough for Redbull to follow then is that what you are saying? But most other teams managed fine, OK then.

My background is accounting/finance/strategy/analytics (both undergraduate and graduate degrees) and when I was running a tip to tail $100MM budget, if there was not a strict limit and I had the lateral ability to use more funding without penalty to advance a north star goal or push some initiative to the left, I absolutely would. Typically when we rolled up financials, we rounded to the next million so going over by hundred's of thousands (and in cases several %) did not even raise a single question.
Again, no one knows what amount RB may have spent...but last I read was $150,000.

[lens]

Everyone is complaining for no reason.

FIA said both AM and RBR minor breached the cap which is under 5% of budget cap.


Aston Martin Aramco Cognizant Formula One Team is considered to be in Procedural Breach of the Financial Regulations;
Oracle Red Bull Racing is considered to be in Procedural and Minor Overspend Breaches of the Financial Regulations



Both will get a fine if they agree, which RBR will not, as they said they will appeal the decision.

Apparently RBR said sick leave and catering is supposed to be excluded from the budget cap which is what put them over.

Let's not forget how Mercedes destroyed their cars 3 times.



Either way, it's going to be a minor fine, haters can cry more.

Originally Posted by Jiren

Horner was bullshitting as usual. Funny how all the red bull fans and merc haters are so silent all of a sudden. BY their own standards Horner and max should be punished and docked wdc and wcc points. Anything less would be a disgrace by the FIA, in a season full of disgraces

Cry more, minor overspend is a fine.


Procedural Breaches can result in Financial Penalties and/or Minor Sporting Penalties (in case of aggravating factors) as detailed in the Financial Regulation. Minor Overspend breach (<5% Cost Cap) can result in Financial Penalties and/or Minor Sporting Penalties. Only a Material Overspend breach (>5% Cost Cap) if confirmed before the Cost Cap Adjudication Panel will result in a mandatory Constructors’ Championship points deductions and can result in additional Financial Penalties and/or Material Sporting Penalties.

Off the FIA website.

It's going to be a fine.

[3798j]

Well, I'm feeling better now that we're hearing from someone with credentials that the tactic many view as deceptive is actually considered procedural accounting. No hating here.

[M5Rick]

Originally Posted by 3798j

Well, I'm feeling better now that we're hearing from someone with credentials that the tactic many view as deceptive is actually considered procedural accounting. No hating here.

So you'd consider the guillotine for someone who overspends a few quid on sandwiches

[3798j]

Originally Posted by M5Rick

So you consider the guillotine for someone who overspends a few quid on sandwiches

Don't know about that, but I do know Max will someday have a WDC that will be indisputable.

[HeelToeShift]

Originally Posted by 3798j

Don't know about that, but I do know Max will someday have a WDC that will be indisputable.

Hamilton's first WDC was something the mob would have put together. And the fact that MB started developing their engine years (5 years of dev) before anyone else...in my eyes if we are going to go by those rules, anything Ham "won" was based on the genesis of cheating and really has 0 undisputed WDCs by that logic.

[3798j]

Originally Posted by HeelToeShift

Hamilton's first WDC was something the mob would have put together. And the fact that MB started developing their engine years (5 years of dev) before anyone else...in my eyes if we are going to go by those rules, anything Ham "won" was based on the genesis of cheating and really has 0 undisputed WDCs by that logic.

I look forward to the day both Lewis and Max are not in Formula 1....Why?...Their fans.

[lens]

Originally Posted by 3798j

I look forward to the day both Lewis and Max are not in Formula 1....Why?...Their fans.

Nah, just Lewis retiring will make it better.


You can see how Max vibes with Charles and Russell and Saintz up there.

[3798j]

Originally Posted by chaungo

Nah, just Lewis retiring will make it better.


You can see how Max vibes with Charles and Russell and Saintz up there.

You don't understand...it's his fans. They're the problem.

[Artemis]

And here's the message posted on the FIA website:
"FIA completes review under the 2021 FIA Formula 1 Financial Regulations"
https://www.fia.com/news/fia-complet...al-regulations

F1 Financial Regulations:
https://www.fia.com/sites/default/fi...ons_iss.12.pdf

F1 website:
"FIA announces 2021 Cost Cap breaches by two F1 teams"
https://www.formula1.com/en/latest/a...sOO3Mx0A2.html

Red Bull Racing initial reaction:

[MontyB1]

Just for record Redbull still haven’t filled their 2021 accounts. This is very frowned upon in the UK from an accounting prospective. Unless that is they are trying to hide something.

All the other team have checked that operate in the UK have filed except RedBull. If they have nothing to hide and it’s only a minor breach then why not publish. Very very odd behaviour indeed.

[TheBingoBalls]

The penalty for both teams is probably going to be so minor that's it's going to fail to set any precedent of breaching the cost cap. If so, I expect teams to fully exercise the "minor" breach and spend the entire 1% for 2022 for "an additional $1.4 million and take whatever minor penalty handed and explain that it's a rounding issue or was used on staff.

That's the problem with the FIA. Can't set proper rules and are afraid to enforce them with strict penalties.

[lens]

Originally Posted by TheBingoBalls

The penalty for both teams is probably going to be so minor that's it's going to fail to set any precedent of breaching the cost cap. If so, I expect teams to fully exercise the "minor" breach and spend the entire 1% for 2022 for "an additional $1.4 million and take whatever minor penalty handed and explain that it's a rounding issue or was used on staff.

That's the problem with the FIA. Can't set proper rules and are afraid to enforce them with strict penalties.

That's how F1 has always been, bend the rules in the grey zone and keep using the loopholes until the FIA cracks down on it. It makes the sport for the better.

Originally Posted by MontyB1

Just for record Redbull still haven’t filled their 2021 accounts. This is very frowned upon in the UK from an accounting prospective. Unless that is they are trying to hide something.

All the other team have checked that operate in the UK have filed except RedBull. If they have nothing to hide and it’s only a minor breach then why not publish. Very very odd behaviour indeed.

They're not hiding anything, there are certain things that are in the grey zone that the FIA considers part of the budget cap that Redbull says it shouldn't be included as they interpreted it a different way. Sick leave and catering for example, as it was COVID year, I can imagine the amount of paid sick leave used for their employees.

[MontyB1]

Originally Posted by TheBingoBalls

The penalty for both teams is probably going to be so minor that's it's going to fail to set any precedent of breaching the cost cap. If so, I expect teams to fully exercise the "minor" breach and spend the entire 1% for 2022 for "an additional $1.4 million and take whatever minor penalty handed and explain that it's a rounding issue or was used on staff.

That's the problem with the FIA. Can't set proper rules and are afraid to enforce them with strict penalties.

Yeah that’s the issue isn’t it. Ross Brawn said the FIA have teeth and ANY overspend will be dealt with severely. But in the last paragraph they have said they have not made a formal investigation. So what have they done with so much at stake.

For me they have said this for two potential reasons.

• That they want to say this year it’s not a big deal but next year it will be let’s go hard next year. Strange if that is the reason but possible.
• Or is it that Deloitte the auditors don’t agree with what Redbull is telling them and thus what the FIA is doing about it isn’t sitting right with them and they want their name kept away. Auditors like to be pretty straight laced and these accounts will become public at some point. At that point ever accountant or auditor can look over what really happened and give their own view which could be damaging to Deloitte if anyone feels this has been fudged. Lots and lots to shake out on this.

I’m sure it will wash away to nothing the FIA and Redbull don’t want even more taken away from last years championship if it was another team then I think they might make an example of them. As for teeth, I bet they have false ones for this year.