2021 Cost Cap Rumours and Speculation

[LM10]

It regardless has created ripples already and don't take the 2 million seriously as that is just an arbitery number. Question is, if that is indeed a problem, does Red Bull have someone else that is being paid in a couple of millions, who is currently not part of top 3 paid. If yes, then they can readjust their top 3, rework the reports and resubmit. Then take Newey's payment into cost cap and they should be fine. They will be liable for procedural beach. I know this sounds naive.

I don't think it will be that simple for them and nor should it be. If they spent the money on the car because they off-booked a major salary then that can't be unspent just by changing an employment title.

It appears to have been a deliberate move and thus should be dealt with properly i.e. punished.

Oh you can rework the expense invoices and resubmit. It's part of process in many countries. If they have already shown invoices, reclassifying them isn't a problem. There is no "unspent" here. You absorb Newey's salary into cost cap and as one of the top 3 paid is now open, move one if the highest paid up to fill the spot.

Yea, well, that would be a freak show. And I don’t think other teams will be naive to not look into this and in case this works out for RedBull, go protest.

[Mogster]

Best thing on Internet today.

Fantastic

[Just_a_fan]

I wonder what Mr Neweys salary is then......

Up to 5% of the budget cap?

Or five dollars over. Nothing has been stated about the magnitude of the breach, except that it is within 5%. Nor has it been stated that it's indeed Newey's salary that is an issue. All rumours and speculation,thanks to the FIA not actually communicating what is going on.

If they are talking about Newey's salary, or even a reasonable portion thereof, being the sticking point, then we're not talking $5. To be honest, if the team could prove it was just $5, I'd expect the FIA to just allow it and issue the compliance certificate and I doubt the other teams would be in disagreement with that approach.

[mendis]

I don't think it will be that simple for them and nor should it be. If they spent the money on the car because they off-booked a major salary then that can't be unspent just by changing an employment title.

It appears to have been a deliberate move and thus should be dealt with properly i.e. punished.

Oh you can rework the expense invoices and resubmit. It's part of process in many countries. If they have already shown invoices, reclassifying them isn't a problem. There is no "unspent" here. You absorb Newey's salary into cost cap and as one of the top 3 paid is now open, move one if the highest paid up to fill the spot.

Reworking expenses might be allowed by taxation authorities but is it allowed in the budget cap?

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. S'funny, but I'm sure RBR must have more people working for them than 59. No doubt the rest are off-book. If so, that allows the team to say "they're not a cost under the budget cap" according to RBR's logic shown with Newey's salary.

That opens an interesting question: if a team gets rid of all its employees and then buys their expertise in as contractors, can they then spend the entire $145m on the car each year? Now that would be a heck of a spend, wouldn't it?

We can't debate a number of assumptions of various departments. I am specifically talking of the case in point. With regards more employees working, that could be true for all the teams. My understanding is, all contracting work is part of Cost Cap and that is why Newey, who according to FIA is a consultant, has to have his payment under cost cap. Can they underpay the contracting company? I guess that you cannot monitor.

[mendis]

I don't think it will be that simple for them and nor should it be. If they spent the money on the car because they off-booked a major salary then that can't be unspent just by changing an employment title.

It appears to have been a deliberate move and thus should be dealt with properly i.e. punished.

Oh you can rework the expense invoices and resubmit. It's part of process in many countries. If they have already shown invoices, reclassifying them isn't a problem. There is no "unspent" here. You absorb Newey's salary into cost cap and as one of the top 3 paid is now open, move one if the highest paid up to fill the spot.

Yea, well, that would be a freak show. And I don’t think other teams will be naive to not look into this and in case this works out for RedBull, go protest.

The problem is, no one can protest this as per the rules!

[Just_a_fan]

Best thing on Internet today.

Brilliant!

[DChemTech]

Up to 5% of the budget cap?

Or five dollars over. Nothing has been stated about the magnitude of the breach, except that it is within 5%. Nor has it been stated that it's indeed Newey's salary that is an issue. All rumours and speculation,thanks to the FIA not actually communicating what is going on.

If they are talking about Newey's salary, or even a reasonable portion thereof, being the sticking point, then we're not talking $5. To be honest, if the team could prove it was just $5, I'd expect the FIA to just allow it and issue the compliance certificate and I doubt the other teams would be in disagreement with that approach.

Why not? The matter is not what the salary of Newey is, the matter is how much is above the cap. He can perfectly well have a 3 million salary, of which 2.999.995 is in the cap (or 5000, or 50.000 - the point less than 5% doesn't mean close to 5% necessarily, it can be much less.). We don't know. We don't have the information about magnitude or origin, so all that happens now is speculation, and all preemptive outrage about the penalty being too low is equally based on speculation. All we can do is wait or speculate.

[Hoffman900]

I don't think it will be that simple for them and nor should it be. If they spent the money on the car because they off-booked a major salary then that can't be unspent just by changing an employment title.

It appears to have been a deliberate move and thus should be dealt with properly i.e. punished.

Oh you can rework the expense invoices and resubmit. It's part of process in many countries. If they have already shown invoices, reclassifying them isn't a problem. There is no "unspent" here. You absorb Newey's salary into cost cap and as one of the top 3 paid is now open, move one if the highest paid up to fill the spot.

Reworking expenses might be allowed by taxation authorities but is it allowed in the budget cap?

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. S'funny, but I'm sure RBR must have more people working for them than 59. No doubt the rest are off-book. If so, that allows the team to say "they're not a cost under the budget cap" according to RBR's logic shown with Newey's salary.

That opens an interesting question: if a team gets rid of all its employees and then buys their expertise in as contractors, can they then spend the entire $145m on the car each year? Now that would be a heck of a spend, wouldn't it?

Just reclassify the engineers as chefs and tell them are are engineering recipes.

As I said, this cost cap is going to lead to offshoring, automation, and/or the use of contractors that aren’t counted as overhead.

[CMSMJ1]

Looking at it from afar - it's a bloody mess isn't it?

I'm not bothered by the outcomes of the resulting fines/penalties - but that there should have been extreme rigour applied to these measures and it's all gone to cock*

Embarassing for both FIA/F1 and for Red Bull who really ought to have managed to come under cap as per all the other teams.

The man on the street isn't going to care about the technicalities - but the optics here for the parties involved are just terrible.



*it is a mess (a bloody mess indeed)

[ispano6]

What about James Allison? Is he still in Mercedes 2021 cost-cap even though he stepped back in July 2021?

Allison revealed he thought he would have to leave the Mercedes entirely having reached his decision to step away as technical director, only for team boss Toto Wolff to come up with a new role for him.

“When I felt that this was the right thing for me and the best thing for the team to step away, I very much thought that I would be stepping away to my sofa to cheer the team from the sidelines as a punter,” he explained.

“I didn’t imagine that there would be a space for me in the team, having relinquished this brilliant job. Happily, Toto saw it a little differently. And between us we worked on the manner in which I could contribute to the team.”

[Stu]

I wonder what Mr Neweys salary is then......

“Enough”, I would imagine…

[Big Tea]

I seem to recall some while back (so may not be so now) that AN was 'Employer by the Group' not by Red Bull F1.
Could this be a part of the discrepancy? FIA want to include hit total expense and RBR saying 'No, only this bit is ours)

Edit, it was also a huge amount, far more than 5 mil even 'back then' when ever that was

[Just_a_fan]

What about James Allison? Is he still in Mercedes 2021 cost-cap even though he stepped back in July 2021?

Unlike Red Bull, Mercedes have been given a clean bill of health.

You can try all the whataboutism you like, try to make up stuff about Mercedes, etc., but the fact is that only one team is in breach of the cap and that is Red Bull.

[ispano6]

What about James Allison? Is he still in Mercedes 2021 cost-cap even though he stepped back in July 2021?

Unlike Red Bull, Mercedes have been given a clean bill of health.

You can try all the whataboutism you like, try to make up stuff about Mercedes, etc., but the fact is that only one team is in breach of the cap and that is Red Bull.

Allison revealed he thought he would have to leave the Mercedes entirely having reached his decision to step away as technical director, only for team boss Toto Wolff to come up with a new role for him.

“When I felt that this was the right thing for me and the best thing for the team to step away, I very much thought that I would be stepping away to my sofa to cheer the team from the sidelines as a punter,” he explained.

“I didn’t imagine that there would be a space for me in the team, having relinquished this brilliant job. Happily, Toto saw it a little differently. And between us we worked on the manner in which I could contribute to the team.”

It's a legitimate question. Just because Mercedes hasn't been "caught" doesn't mean something behind the scenes is happening.

[Stu]

Looking at it from afar - it's a bloody mess isn't it?

I'm not bothered by the outcomes of the resulting fines/penalties - but that there should have been extreme rigour applied to these measures and it's all gone to cock*

Embarassing for both FIA/F1 and for Red Bull who really ought to have managed to come under cap as per all the other teams.

The man on the street isn't going to care about the technicalities - but the optics here for the parties involved are just terrible.



*it is a mess (a bloody mess indeed)

Totally agree, no-one is going to come out of this well. It’s like a ----sandwich, and will leave a bitter taste for all concerned.