2021 Cost Cap Rumours and Speculation

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Big Tea
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Joined: 24 Dec 2017, 20:57

Re: 2021 Cost Cap Rumours and Speculation

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djones wrote:
16 Oct 2022, 10:49
mendis wrote:
16 Oct 2022, 09:12
I am surprised this thread is opened again. There are no latest official developments and I am sure we will see posters fighting here once again, repeating exact same content. It would be wise to keep this locked until FIA publishes new information.
You have a choice to not open the topic until you feel it’s worth coming back in to. Nobody is forcing you to come here. Others should equally have a choice to post their opinions or discussions.

Anyway….

I was thinking about this subject over the weekend and I do wonder if we will see a team leave the sport. If Redbull are severely punished they may threaten to leave. Equally if they are not severely punished the likes of Mercedes’ may threaten to leave too. I think the situation this cost cap breach has caused is actually even more serious than it first looked.
While I have no wish to see Red Bull punished, and in particular see Max lose his title (which would be considered worthless to Hamilton anyway), looking at past events such as Tyrrol and BAR, and considering what gain they probably
had and how much RBR could have, it would probably be greater. Depending on the amount of course, but assuming it is not trivial, it would look like a real problem for them.
When arguing with a fool, be sure the other person is not doing the same thing.

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chrisc90
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Re: 2021 Cost Cap Rumours and Speculation

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Is there a chance that the confusion could have come from staffing or parts development that were due to be for the next season/era of cars?

For example could RB have moved staff onto the 2023 car and development, or used budget to start making parts etc and the FIA is thinking they are for the 2021 season? Or a staff member working on the rb18 for 6 months, so 6 months is allocated to one car and 6 months to the other.

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InsaneX_Badger
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Re: 2021 Cost Cap Rumours and Speculation

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chrisc90 wrote:
16 Oct 2022, 12:34
Is there a chance that the confusion could have come from staffing or parts development that were due to be for the next season/era of cars?

For example could RB have moved staff onto the 2023 car and development, or used budget to start making parts etc and the FIA is thinking they are for the 2021 season? Or a staff member working on the rb18 for 6 months, so 6 months is allocated to one car and 6 months to the other.
It is possible, but every other constructor would have more than likely have done the same, and also have fallen under the cost cap.

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InsaneX_Badger
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Re: 2021 Cost Cap Rumours and Speculation

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I just feel like everyone when it's the right time should be told how much they went over, and what exactly is being contested between the FIA and RB. Obviously it's extremely sensitive at the moment, but silence is deafening.

littlebigcat
littlebigcat
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Re: 2021 Cost Cap Rumours and Speculation

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djones wrote:
16 Oct 2022, 10:49
I was thinking about this subject over the weekend and I do wonder if we will see a team leave the sport. If Redbull are severely punished they may threaten to leave. Equally if they are not severely punished the likes of Mercedes’ may threaten to leave too. I think the situation this cost cap breach has caused is actually even more serious than it first looked.
Short answer no. Mercedes got the equivalent of $1b marketing expenditure while making a £86m profit. Mercedes leaving the sport makes no sense.

Arguably the same would be for Red Bull. And they've had no issues with cheating, being caught and admitting it before.

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henry
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Location: England

Re: 2021 Cost Cap Rumours and Speculation

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chrisc90 wrote:
16 Oct 2022, 12:34
Is there a chance that the confusion could have come from staffing or parts development that were due to be for the next season/era of cars?

For example could RB have moved staff onto the 2023 car and development, or used budget to start making parts etc and the FIA is thinking they are for the 2021 season? Or a staff member working on the rb18 for 6 months, so 6 months is allocated to one car and 6 months to the other.
The budget cap is not related to the output, this years car or next, only the expenditure on cars in general during 21

RB are using this fact to suggest that they spent more on the 21 car than their rivals by delaying spending on the 22 car. This spikes arguments that RB brought more updates than their rivals.
Fortune favours the prepared; she has no favourites and takes no sides.
Truth is confirmed by inspection and delay; falsehood by haste and uncertainty : Tacitus

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RZS10
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Joined: 07 Dec 2013, 01:23

Re: 2021 Cost Cap Rumours and Speculation

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You beat me to it.

Page 2:
These Financial Regulations introduce a Cost Cap that limits certain costs that may be incurred by or on behalf of an F1 Team in each Full Year Reporting Period, while leaving that F1 Team free to decide how to allocate resources within that Cost Cap.
Page 46:
"Full Year Reporting Period" means a 12-month financial reporting period commencing on 1 January and ending on 31 December.

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chrisc90
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Re: 2021 Cost Cap Rumours and Speculation

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Cheers to those who clarified my question about what project the staff could be allocated to.

McL-H
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Re: 2021 Cost Cap Rumours and Speculation

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Stu wrote:
16 Oct 2022, 11:40
McL-H wrote:
16 Oct 2022, 10:08
This sport has seen cars be disqualified for wings that were a mm too wide, for having too much fuel flow for only 1 second during a whole race.

If Red Bull is not disqualified after this, F1 cannot be taken seriously anymore. Not only would it be unfair to any team that was previously punished for slight rule breaches. They would give fiat for just breaching any rule out there in the future.

If the FIA is serious about the cost cap this is the time to prove it and set a very very clear precedent.
The difference is that the things in your first paragraph could be classed as categorically pre-meditated.
RedBull (and any team in the future that breaks any of the caps - budget, wind-tunnel/Tera-flops, testing, engine use), require a fitting punishment. All of those except the budget cap would be premeditated, to plan to exceed the budget cap would be the same; whereas discovering that it has been breached by a misinterpretation/differing interpretation is questionable as far as premeditation is concerned.
Maybe teams should be compelled to submit a budget forecast ahead of the season (this could remain sealed until the full accounts are submitted and reviewed).
I understand your point but I don’t think that I agree that motive should play a role in the penalty’s that are given out. And while a mm too large wing could indeed be classified as pre-meditated, the race Renault was disqualified for one of their cars going over a bump at Singapore that offset the fuel flow leading to a short increase in power, was not pre-meditated. But they were disqualified regardless. Very harsh, but very clear as well.

I don’t believe having teams hand in their financial forecast at the start of the season and keeping it sealed would make it possible to detect any pre-meditated breach of the budget cap. You would just hand in a 145M forecast and later explain it ended up being 152M due to unforeseen circumstances. I work as Controller in the public sector, and in fact that’s how most public organisations operate. We need to have our budget plans audited and accepted by government oversight. But budget plans in the public sector are often entirely fictional, having low correlation to actual realisation, year-in, year-out. However, since public entities mostly undercut the budget instead of overcutting it, nobody seems to care. That is different in F1, but method would end up being the same in what you proposed.

I believe the only way to enforce the budget cap is by enforcing it in a very strict manner with pre-determined consequences. You could include in the rules an acceptable percentage error to the budget cap in case teams go slightly over it by mistake (maybe 1,0 to 1,5%). But any above that should lead to very harsh penalties and in my perception, disqualification is the only suitable penalty. Why? Because that’s the penalty that’s given for any breach of technical regulations as well. And more lenient repercussions would only lead to teams searching up the boundaries more.

Because when you say: “we have a budget cap of 145M. But if you go over it up until 7,5 million, that’s a minor penalty. And if you go over it with up to 20 million, that’s a medium penalty. And going above that is disqualification.” the top teams would just exploit this, taking light penalties for granted and still building their lead over smaller teams that have less funding. And that is not a good idea.

Now that I’m discussing this, I realise and have to admit I don’t have a thorough understanding of the regulations surrounding F1’s budget cap, other than what I’ve read on here. But it makes me intrigued to read more into it and will do so! :)

littlebigcat
littlebigcat
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Re: 2021 Cost Cap Rumours and Speculation

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henry wrote:
16 Oct 2022, 13:01
chrisc90 wrote:
16 Oct 2022, 12:34
Is there a chance that the confusion could have come from staffing or parts development that were due to be for the next season/era of cars?

For example could RB have moved staff onto the 2023 car and development, or used budget to start making parts etc and the FIA is thinking they are for the 2021 season? Or a staff member working on the rb18 for 6 months, so 6 months is allocated to one car and 6 months to the other.
The budget cap is not related to the output, this years car or next, only the expenditure on cars in general during 21

RB are using this fact to suggest that they spent more on the 21 car than their rivals by delaying spending on the 22 car. This spikes arguments that RB brought more updates than their rivals.
No if you manufacture a 2023 part in 2022 its part of the cost cap in which year its first used. The R&D cost of this part is included in the year the R&D happened, this includes the staff cost. Only the manufacturing and material cost can be deferred to the next season.

Given this is applicable to every other team, I do not think the FIA would have made any mistake here

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chrisc90
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Joined: 23 Feb 2022, 21:22

Re: 2021 Cost Cap Rumours and Speculation

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littlebigcat wrote:
16 Oct 2022, 13:29
henry wrote:
16 Oct 2022, 13:01
chrisc90 wrote:
16 Oct 2022, 12:34
Is there a chance that the confusion could have come from staffing or parts development that were due to be for the next season/era of cars?

For example could RB have moved staff onto the 2023 car and development, or used budget to start making parts etc and the FIA is thinking they are for the 2021 season? Or a staff member working on the rb18 for 6 months, so 6 months is allocated to one car and 6 months to the other.
The budget cap is not related to the output, this years car or next, only the expenditure on cars in general during 21

RB are using this fact to suggest that they spent more on the 21 car than their rivals by delaying spending on the 22 car. This spikes arguments that RB brought more updates than their rivals.
No if you manufacture a 2023 part in 2022 its part of the cost cap in which year its first used. The R&D cost of this part is included in the year the R&D happened, this includes the staff cost. Only the manufacturing and material cost can be deferred to the next season.

Given this is applicable to every other team, I do not think the FIA would have made any mistake here
That adds a lot more complications to the rules if that is the case. Do you know which section of the rules that comes under?

Just to add, im sure its RB who make the wheel covers for all of the teams.

LM10
LM10
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Joined: 07 Mar 2018, 00:07

Re: 2021 Cost Cap Rumours and Speculation

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Stu wrote:
16 Oct 2022, 11:40
McL-H wrote:
16 Oct 2022, 10:08
This sport has seen cars be disqualified for wings that were a mm too wide, for having too much fuel flow for only 1 second during a whole race.

If Red Bull is not disqualified after this, F1 cannot be taken seriously anymore. Not only would it be unfair to any team that was previously punished for slight rule breaches. They would give fiat for just breaching any rule out there in the future.

If the FIA is serious about the cost cap this is the time to prove it and set a very very clear precedent.
The difference is that the things in your first paragraph could be classed as categorically pre-meditated.
RedBull (and any team in the future that breaks any of the caps - budget, wind-tunnel/Tera-flops, testing, engine use), require a fitting punishment. All of those except the budget cap would be premeditated, to plan to exceed the budget cap would be the same; whereas discovering that it has been breached by a misinterpretation/differing interpretation is questionable as far as premeditation is concerned.
Maybe teams should be compelled to submit a budget forecast ahead of the season (this could remain sealed until the full accounts are submitted and reviewed).
This argumentation does not hold and henry’s post on page 65 shows why.

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chrisc90
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Re: 2021 Cost Cap Rumours and Speculation

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littlebigcat wrote:
16 Oct 2022, 13:29

No if you manufacture a 2023 part in 2022 its part of the cost cap in which year its first used. The R&D cost of this part is included in the year the R&D happened, this includes the staff cost. Only the manufacturing and material cost can be deferred to the next season.

Given this is applicable to every other team, I do not think the FIA would have made any mistake here
I presume that comes under Transitional Carry Over Inventories, Used Inventories and Unused Inventories.

"Transitional Carry Over Inventories" means the Inventories an F1 Team has elected to treat as
Transitional Carry Over Inventories for the purposes of these Financial Regulations, the type and
quantity of such Inventories being prescribed by the Cost Cap Administration via a Determination.

"Used Inventories" means Inventories held at the end of the Reporting Period for future use in
respect of the F1 Team’s F1 Cars, that have been used in respect of the F1 Team’s F1 Cars in the
Reporting Period, excluding Transitional Carry Over Inventories.

"Unused Inventories" means Inventories held at the end of the Reporting Period for future use in
respect of the F1 Team’s F1 Cars, excluding Transitional Carry Over Inventories and Used Inventories.


Unfortunately, it doesnt look like we will know what items are included in the transitional carry over inventories, but id guess this is the likes of pit garage equipment, pitwalls and the garage furnishings required to race/operate

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RZS10
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Re: 2021 Cost Cap Rumours and Speculation

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I wonder if some of the pit equipment is excluded ... In the same section with the definitions you'll find the following, i guess used/unused expands on this:
"Inventories" means only those assets which are:

(a) finished goods purchased or produced, and held for use in respect of the F1 Team’s F1 Cars, with the exception of Pit Stop Equipment and Tyre Blankets;

(b) in the process of production for such use under paragraph (a) of this definition; and

(c) in the form of materials or supplies to be consumed in the process of production for such use under paragraph (a) of this definition.

edit:
"Pit Stop Equipment" has the meaning set out in Appendix 4 of the 2021 Technical Regulations.

from that: guns, F&R jack, gantry & electronics ... so as you wrote the pits/pitwall etc are likely to be in the transitional inventories (?)

rijtuig
rijtuig
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Re: 2021 Cost Cap Rumours and Speculation

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Is Red Bull allowed to carryover this years remaining budget to next year?

Max is already champion, you would assume they will be avoiding major upgrades.