2021 Cost Cap Rumours and Speculation

[mendis]

You didn’t answer my question but thank you for admitting Red Bull has breached, that’s the first step.

I did. You didn't read well. Its not for me or anyone else to 'admit'. It's a fact.

No, you didn’t read well, is racingnews365 a reliable news source?

Did the news outlet just make up the $4 million number?

Is racingnes365 reliable? No. No one is in this matter, other than FIA.

Did news outlets made up the number? Yes. If FIA didn't publish, then it's made up.

[yamahasho]

I did. You didn't read well. Its not for me or anyone else to 'admit'. It's a fact.

No, you didn’t read well, is racingnews365 a reliable news source?

Did the news outlet just make up the $4 million number?

Is racingnes365 reliable? No. No one is in this matter, other than FIA.

Did news outlets made up the number? Yes. If FIA didn't publish, then it's made up.

Thank you, I’ll think twice before quoting anything from racingnews365.

Back to the topic, so 9 out of 10 teams were within the budget, Williams has already settled. Poor Red Bull.

Or maybe they’re brilliant. If no severe penalties are coming, then Red Bull will think overspending was a perfect idea. And so will the others. If any breach and settlement is done post season and settled then the budget cap is worthless.

[Mosin123]

No, you didn’t read well, is racingnews365 a reliable news source?

Did the news outlet just make up the $4 million number?

Is racingnes365 reliable? No. No one is in this matter, other than FIA.

Did news outlets made up the number? Yes. If FIA didn't publish, then it's made up.

Thank you, I’ll think twice before quoting anything from racingnews365.

Back to the topic, so 9 out of 10 teams were within the budget, Williams has already settled. Poor Red Bull.

Or maybe they’re brilliant. If no severe penalties are coming, then Red Bull will think overspending was a perfect idea. And so will the others.

That. cant be doing this every single year, either the penalty will be enough to put them all off, or it wont and we might as well just scrap it now.

[yamahasho]

FIA should remove the whole minor and major breach clause. Cheating is cheating.

Sucks for us fans, were just fighting for nothing, thanks FIA.

[DChemTech]

FIA should remove the whole minor and major breach clause. Cheating is cheating.

Sucks for us fans, were just fighting for nothing, thanks FIA.

and as elaborately stated before, a cost cap breach does not equal cheating per se. Cheating is a specific crime that implies malicious intent, and that has not been established (or at least not been publicly communicated) so far. It's just like killing someone does not instantly mean that someone committed premeditated murder - the conditions and circumstances matter and need to be weighted in to the establishment of the punishment.

The only fact that has been established so far is that the cap has been breached according to the rules as set up and interpreted by the FIA (and that RB does not agree with that interpretation, and has declined a first proposed settlement). No more, no less. All else is speculation, and should be treated as such.

[mwillems]

Watched the whole thing ... some interesting bits

The rules say the teams have to ask for clarification if something is not clear, Zak Brown said they asked a lot of questions and found the process very manageable and ended up right at the limit of the cap, Horner on the other hand says that the rules are so complicated that it's almost impossible to get it right and that within the regulations there's a duty for the FIA to guide the teams to have effective compliance.

Horner did not deny the 1.8 million but was adamant that it did not bring them any performance or advantage, he later said "we're talking probably what is in contention with the FIA of a couple of hundred dollars" - so maybe the 1.8m is not correct.

He repeated the claim that they were significantly under the budget cap with their initial submission but that they "expected certain things to be potentially challenged" after they had professional third party accountants go through the regulations.

He hopes it will get resolved, ideally during this weekend, if not it might go to the panel, next to the ICA, drawing out the process for another 6-9 months.

An issue he sees with the clarification for the heritage stock, which he believes to be a retrospective rule change, is that they could not change their submission after the fact, which they would have done otherwise.

This one i'll just quote since i'm not sure what he's getting at:
"There are significant challenges within 2022 when you look at the amount of crash damage some of the teams are having, some of the upgrade levels that are going on, the precedents that will be set from 2021 will have to apply [... with ?...] consistency in 2022."

edit: maybe an addition: the procedural breach for Williams was due to a third party not submitting their docs on time

But what I don't fully like the sound of is the reliance on the interpretation of the rules from their expensive 3rd party accountants, when the FIA would have clarified those rules for free and without billing hours....

I get that saying that 3rd party accountants gave their view, but that was never the point, the FIA were fully engaged and helpful as all three panellists confirmed, so why are they falling back to the opinion of anyone other than the FIA to justify the interpretation of the complex rules? If Marvel wrote this, it would be a huge plot hole....

I would like to have asked specifically if RB had asked for clarification around unused parts from the FIA, and then what they did look for clarification around.

Horner did a very good job in this but there are still a lot of questions that weren't really answered. Zak tried to slide his ass back to a more neutral position but still made the point, Mclaren came right to the limit and it was done with the help from the FIA. In fact the line "I've been managing budgets all my life and none of this is foreign to me" was a total dig to say "You have no excuses here".

But kudos to all parties, they kept it constructive and made their points. That said, whilst I'm sure the RB employees kids might be getting hassle, to put this all on one letter when everyone has been openly questioning RB I found extremely distasteful and was somewhat like using a human shield. In fact distasteful doesn't cover my opinion of that remark.

[yamahasho]

The fact that we don’t have actual values for the amount over the cap and the fact that RedBull is fighting so hard to deny it, and there has been no quick agreement on the settlement offer, the breach doesn’t appear minor. Williams settled fast.

RedBull needs to settle before actual numbers start coming out.

[mwillems]

The fact that we don’t have actual values for the amount over the cap and the fact that RedBull is fighting so hard to deny it, and there has been no quick agreement on the settlement offer, the breach doesn’t appear minor. Williams settled fast.

RedBull needs to settle before actual numbers start coming out.

Perhaps RB want the numbers to come out, perhaps they will settle in every situation but are trying to negotiate the numbers down and play a PR game in the process to portray the image of the team that would have been "open" if the rules didn't stop them.

I do not trust Horner in particular and do not believe yet that he does want to open the numbers up, just that he is a canny PR manager from a team who's image always came first.

Edit: Despite my opinion I'm open to being shown wrong, we don't know the numbers still, my opinions are just on what has been presented to us so far in terms of facts.

[littlebigcat]

It would be nice if someone can check my thinking here.

Issue 9 has the Transitional Carry Over rule and Issue 10 is where it was first removed. Both versions have this clause

1.2 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.

The definition of Cost Cap changes between these versions of the regulations.

2.3 The amount of the "Cost Cap" shall be as follows, in each case adjusted (if applicable) for Indexation:

• (a) in the Full Year Reporting Period ending on 31 December 2021:

2.3 The amount of the "Cost Cap" shall be as follows, in each case adjusted (if applicable) for Indexation:

• (a) in the Full Year Reporting Period ending on 31 December 2022:

I'm presuming because April is after the submission date for the 2021 report and there is no longer the need to include rules for that initial year. Therefore the rules in Issue 10 do not apply to the report for 2021

Horner's statement that these rules and subsequent rules shouldn't be applied to their 2021 would be correct. However we have no confirmation from the FIA that they and the auditors did in fact use Issue 10 or later to audit RBR's 2021 cost cap report. We likely won't find out if they did or they didn't until they release the ABA or there is a panel judgement.

However there is something key in what Horner has said regarding the removal of Transitional Carry Over, he has said they have fallen foul of it being removed. That's the defence, the definition has been removed. However the use of a part as Transitional Carry Over requires a Determination from the FIA to inform the team it may use a part as Transitional Carry Over.

If the FIA had communicated to RBR that a part could be considered Transitional Carry Over and were saying retrospectively no its not, then that is a different defence and certainly isn't the one we are hearing from Horner.

It really reads to me Horner is openly playing politics to discredit the process enough to force the FIA into an lesser punishment. He is looking for a meaningless punishment rather than a meaningful one.

[yamahasho]

Horner stated it could probably amount to a few hundred dollars. Kind of an admission, sucks for the RedBull image. Perfect season, perfect driver, perfect race strategy and perfect 2nd driver, all now with a big asterisk.

[mendis]

Horner stated it could probably amount to a few hundred dollars. Kind of an admission, sucks for the RedBull image. Perfect season, perfect driver, perfect race strategy and perfect 2nd driver, all now with a big asterisk.

The way I read is, Horner isn't admitting to anything. He is saying, their contention is for a sum that is around a couple of hundred thousand dollars.

“The ranging suite of penalties is totally subjective and I think this is what is contributing to a concerted campaign for there to be a draconian penalty on Red Bull for what at the end of the day is in contention with the FIA for a couple of hundred thousand dollars.

“I’ll explain later why we have a different opinion within that submission of what our position was versus another.

[mwillems]

It would be nice if someone can check my thinking here.

Issue 9 has the Transitional Carry Over rule and Issue 10 is where it was first removed. Both versions have this clause

1.2 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.

The definition of Cost Cap changes between these versions of the regulations.

2.3 The amount of the "Cost Cap" shall be as follows, in each case adjusted (if applicable) for Indexation:

• (a) in the Full Year Reporting Period ending on 31 December 2021:

2.3 The amount of the "Cost Cap" shall be as follows, in each case adjusted (if applicable) for Indexation:

• (a) in the Full Year Reporting Period ending on 31 December 2022:

I'm presuming because April is after the submission date for the 2021 report and there is no longer the need to include rules for that initial year. Therefore the rules in Issue 10 do not apply to the report for 2021

Horner's statement that these rules and subsequent rules shouldn't be applied to their 2021 would be correct. However we have no confirmation from the FIA that they and the auditors did in fact use Issue 10 or later to audit RBR's 2021 cost cap report. We likely won't find out if they did or they didn't until they release the ABA or there is a panel judgement.

However there is something key in what Horner has said regarding the removal of Transitional Carry Over, he has said they have fallen foul of it being removed. That's the defence, the definition has been removed. However the use of a part as Transitional Carry Over requires a Determination from the FIA to inform the team it may use a part as Transitional Carry Over.

If the FIA had communicated to RBR that a part could be considered Transitional Carry Over and were saying retrospectively no its not, then that is a different defence and certainly isn't the one we are hearing from Horner.

It really reads to me Horner is openly playing politics to discredit the process enough to force the FIA into an lesser punishment. He is looking for a meaningless punishment rather than a meaningful one.

That is a damn good point. Was the clarification just a clarification for the new Financial Year?

Because if so the issue is that the older rules expected the teams to ask specifically about the items being carried over and RB didn't, and the real defence is that there were 75000 line items....

[yamahasho]

We’ll they already accepted the breach so now it’s all a matter of what the punishment will be, if any.

I don’t think they should of entered into the Accepted Breach Agreement. Looks like damage control now.

https://www.motorsport.com/f1/news/red- ... 87108/amp/

“In effect, an ABA means that the team admits to breaking the rules with its 2021 spending, and accepts the punishment levied.”

[mwillems]

We’ll they already accepted the breach so now it’s all a matter of what the punishment will be, if any.

Link?

[Wouter]

Horner stated it could probably amount to a few hundred dollars.
Kind of an admission, sucks for the RedBull image. Perfect season, perfect driver, perfect race strategy and perfect 2nd driver, all now with a big asterisk.

.
This is wrong. A few hundred thousand.
.

Red Bull will hope that the matter will be resolved quickly, especially now that the constructors' title can also be won tomorrow. If there is a deal with the FIA, the team will be open.
Then the team wants to show how it is possible that it is about $4 million below the cap when it submits figures in March,
and now about 1.8 million above it.
1.4 million of that is possible tax refund. That's why Horner spoke today about 'a few hundred thousand dollars above cap'

.
It seems that they have come to an agreement last night, but this will be announced a few days later in connection with the death of Dietrich Mateschitz, according to AMuS.