2021 Cost Cap Rumours and Speculation

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Wouter
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Re: 2021 Cost Cap Rumours and Speculation

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yamahasho wrote:
28 Oct 2022, 16:27
chrisc90 wrote:
28 Oct 2022, 16:16
10% reduction in development for a 0.37% overspend.

Fairly hefty
Come on Chris, you have to give in now, Red Bull cheated, I thought it was just minor like $100k over, but $2 million over, that's crazy, they cheated. Where's the garden leave in the FIA report? no where?
Horner, Newey and Max Vestappen are all cheaters and I hope someone puts the wiki championship page as they cheated. Red Bull probably have 2023 and 2024 locked up as well.
.
From the FIA document:
ummary of ABA terms and sanctions
In accordance with the findings of the Cost Cap Administration, RBR has acknowledged that the Reporting
Documentation submitted by it included the following incorrectly excluded and/or adjusted costs:
1. Overstated excluded costs pursuant to Article 3.1(a) of the Financial Regulations (concerning
catering services);
2. Costs pursuant to Article 3.1(w) of the Financial Regulations (concerning consideration and
associated employer’s social security contributions);
3. Costs pursuant to Article 3.1(h)(i) of the Financial Regulations (in respect of Non-F1 Activities), as
those costs had already been offset within Total Costs of the Reporting Group;
4. Costs pursuant to Article 3.1(k) of the Financial Regulations (in respect of bonus and associated
employer’s social security contributions);
5. Understatement of Relevant Costs in respect of a gain on disposal of fixed assets by failing to make
the necessary upwards adjustment;
6. Costs pursuant to Article 3.1(q) of the Financial Regulations (concerning apprenticeship levies);
7. Costs pursuant to Article 3.1(h)(ii)(i) of the Financial Regulations (concerning consideration and
associated employer’s social security contributions);
8. Understatement of Relevant Costs in respect of provisions set forth by Article 4.1(a)(i) of the
Financial Regulations (concerning the cost of use of Power Units);
9. Costs pursuant to Article 3.1(h) (i) of the Financial Regulations (concerning consideration and
associated employer’s social security contributions);
10. Understatement of Relevant Costs in respect of provisions set forth by Article 4.1(f)(i)(B) of the
Financial Regulations (concerning use of inventories);
11. Clerical error in respect of RBR’s calculation of certain costs re-charged to it by Red Bull Power Trains
Limited;
12. Certain travel costs pursuant to Article 3.1(r) of the Financial Regulations;
13. Costs of maintenance pursuant to Article 3.1(i) of the Financial Regulations.
and further that consequently its Relevant Costs for the 2021 Reporting Period exceeded the 2021 Cost
Cap by £1,864,000 (1.6%). RBR has therefore accepted that it has breached: (i) Article 8.2(e) of the
Financial Regulations due to its failure to file accurate Full Year Reporting Documentation in respect of
the 2021 Full Year Reporting Period, and (ii) Article 8.10(b) of the Financial Regulations due to its failure
to keep its Relevant Costs under the 2021 Cost Cap.

The FIA acknowledges that had RBR applied the correct treatment within its Full Year Reporting
Documentation of RBR’s Notional Tax Credit within its 2021 submission of a value of £1,431,348, it would
have been considered by the Cost Cap Administration to be in compliance with Article 4.1(b) of the
Regulations and therefore RBR’s Relevant Costs for the 2021 Reporting Period would have in fact
exceeded the 2021 Cost Cap by £432,652 (0.37%).


On that basis, RBR has accepted the imposition of the following sanctions:
a) RBR must pay a Financial Penalty of USD 7,000,000 to the FIA within 30 days of the date of
execution of the ABA (Article 9.5 of the Financial Regulations);
b) RBR receives a Minor Sporting Penalty in the form of a limitation of RBR’s ability to conduct
aerodynamic Testing during a period of 12 months from the date of execution of the ABA
through the application of a reduction of 10% of the Coefficient C used to calculate the
individual Restricted Wind Tunnel Testing (RWTT) and Restricted Computational Fluid
Dynamics (RCFD) limits applicable to each Team as set out in Article 6 of Appendix 7 to the
FIA Formula 1 Sporting Regulations. For example, if the Coefficient C, based on RBR’s
championship position is 70%, the effective new value of C will be: CNEW=70% x (1-0.10) =
63.0%; and
c) RBR bears the costs incurred by the Cost Cap Administration in connection with the
preparation of the ABA.
The decision of the Cost Cap Administration to enter into the ABA constitutes its final decision resolving
this matter and is not subject to appeal. Non-compliance by RBR with any terms of the ABA will result in
a further Procedural Breach under Articles 6.30 and 8.2(f) of the Financial Regulations and automatic
referral to the Cost Cap Adjudication Panel.
Last edited by Wouter on 28 Oct 2022, 16:51, edited 1 time in total.
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InsaneX_Badger
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Joined: 04 Mar 2021, 16:03

Re: 2021 Cost Cap Rumours and Speculation

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SiLo wrote:
28 Oct 2022, 16:38
west52keep64 wrote:
28 Oct 2022, 16:29
The 10% reduction is actually only 7%, because it's calculated from the 70% they get for being WCC i.e. instead of 70% they get 63%. The fine also doesn't count towards the cost cap for this season or next, so it's an even softer penalty when you look at it that way.
This should not be how its worked out. It should be a flat 10% rate.

A top team breaching the cap now means they are punished less than a bottom team doing exactly the same thing because of how the car development percentages are worked out.

For instance, Williams doing the same thing would see a 12% reduction in wind tunnel time vs 7% for Red Bull. It should be a flat rate.
Couldn't agree more! There should never be such a penalty which would affect Williams more than RB, Ferrari, or Mercedes

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AeroDynamic
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Joined: 28 Sep 2021, 12:25
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Re: 2021 Cost Cap Rumours and Speculation

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£432,652 – more than twice the amount Horner said could be critical in deciding a championship.
Last edited by AeroDynamic on 28 Oct 2022, 16:57, edited 1 time in total.

McL-H
McL-H
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Joined: 17 May 2016, 16:18

Re: 2021 Cost Cap Rumours and Speculation

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The punishment is way too lenient. Goodbye to the cost cap!

That’s all I have left to say on this matter.

yamahasho
yamahasho
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Re: 2021 Cost Cap Rumours and Speculation

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Can they appeal?
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djones
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Re: 2021 Cost Cap Rumours and Speculation

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That punishment is too low.

I'm not saying it won them this year as they have done a good job. But it was certainly enough to make 2021 a win instead of a loss.

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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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So, back to one of the original comments I made on the early pages of this thread…
Is a small overspend worth the penalty?

Do you think we will see other teams trying similar in future years?

Incognito
Incognito
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Joined: 18 Jul 2021, 18:06

Re: 2021 Cost Cap Rumours and Speculation

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Wouter wrote:
28 Oct 2022, 16:49
The FIA acknowledges that had RBR applied the correct treatment within its Full Year Reporting
Documentation of RBR’s Notional Tax Credit within its 2021 submission of a value of £1,431,348, it would
have been considered by the Cost Cap Administration to be in compliance with Article 4.1(b) of the
Regulations and therefore RBR’s Relevant Costs for the 2021 Reporting Period would have in fact
exceeded the 2021 Cost Cap by £432,652 (0.37%).
Agreed. As you so definitively point out, they did cheat, but only by the £432,652. It's c.10% of the total upgrade budget of Ferrari, so c.10% extra of the performance gain compared to their rivals. The sort of performance gain chemical doping dreams of being able to provide.

And the case is closed. I believe there's no right of appeal for anyone other than RBR and, by admitting to their cheating, they've waived that right.

Not bad in return for 3 Championships. I wonder how much windtunnel time McLaren would be willing to give up in order to win 3 Championships? Or Alpine? Or the others? Got to be worth a handful of %, right?

I did wonder last night whether RBR might be compelled to gift each team the sum that they had overspent by and that the FIA would waive that sum being spent on cost cap items. It would level the playing field somewhat, particularly for the teams that don't have the financing to reach the cost cap anyway.

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dans79
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Location: USA

Re: 2021 Cost Cap Rumours and Speculation

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yamahasho wrote:
28 Oct 2022, 16:53
Can they appeal?
No, because they signed the ABA, it's in the rules you can't appeal!
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dans79
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Re: 2021 Cost Cap Rumours and Speculation

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Incognito wrote:
28 Oct 2022, 17:02
It would level the playing field somewhat, particularly for the teams that don't have the financing to reach the cost cap anyway.
according to their 2019 budgets they can all reach the cap.

https://www.racefans.net/2019/12/27/the ... -part-one/

https://www.racefans.net/2020/01/02/the ... ams-spent/
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west52keep64
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Joined: 16 Sep 2021, 00:05

Re: 2021 Cost Cap Rumours and Speculation

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Wouter wrote:
28 Oct 2022, 16:49
From the FIA document:
10. Understatement of Relevant Costs in respect of provisions set forth by Article 4.1(f)(i)(B) of the
Financial Regulations (concerning use of inventories);
So this puts to bed the narrative that changes to the financial regulations were part of the reason Red Bull went over. Article 4.1(f)(i)(B) is a reference to the regulations prior to the 19 July revision, because prior to that revision for this particular article they used letters A, B, C, D for the clauses. In later revision they simplified the regulations but also changed to i, ii, iii for the clauses. If they were referring to the "changed" regulations they would have referred to Article 4.1(f)(i)(ii) instead.

Also, that particular part of the regs didn't change in a way that would impact the cost cap for 2021, actually if anything it would have helped Red Bull had the later revision been applied:

This is this is Article 4.1(f)(i)(B) from Issue 9 dated 18 Feb:
the cost of an item of Used Inventories must be recognised in full as
an expense in the Full Year Reporting Period in which it was first used
in respect of the F1 Team’s F1 Cars, provided that where such first use
occurs prior to 1 January 2021, the cost of that item of Used
Inventories must be recognised in full as an expense in the Full Year
Reporting Period ending on 31 December 2021;
And then the revision from Issue 11 dated 19 July:
the cost of an item of Used Inventories must be recognised in full as
an expense in the Full Year Reporting Period in which it was first used
in respect of the F1 Team’s F1 Cars;
The reason for the change is because for 2021, used parts from 2020 were included in the cap because the cars weren't changed between those seasons, they wanted to ensure parts from 2020 used during the 2021 season were still included in the cost cap.

The regulations have now been updated because obviously for 2022 parts from 2020 shouldn't be included in the cost cap. If the 2021 cost cap had been applied using the most recent revision of the regulations, I imagine most teams would have saved a lot of money because I'm sure they all used 2020 parts in 2021.
Last edited by west52keep64 on 28 Oct 2022, 17:19, edited 3 times in total.

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Vanja #66
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Re: 2021 Cost Cap Rumours and Speculation

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Absolutely humiliating (non)penalties... Not that anyone expect anything remotely relevant and adequate...
And they call it a stall. A STALL!

#DwarvesAreNaturalSprinters
#BlessYouLaddie

yamahasho
yamahasho
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Re: 2021 Cost Cap Rumours and Speculation

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chrisc90 wrote:
28 Oct 2022, 17:00
So, back to one of the original comments I made on the early pages of this thread…
Is a small overspend worth the penalty?

Do you think we will see other teams trying similar in future years?
Yes if they needed an extra wheel hub or something built over a weekend, they can quickly machine the part and have it sent in for the race weekend, I think aero parts would be more difficult, you probably couldn't build a new wing as quick if one is needed and not within the budget but if the same wing is user for the following race and yours is damaged, maybe they can get it in time. I'm sure there are many parts they can build quickly and the race outcome may totally change, the points paying position would be enough to cover any fines levied.

I'm sure there are other ways to go over the budget and get an advantage. Would be good to hear anyone's idea's.
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morefirejules08
morefirejules08
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Re: 2021 Cost Cap Rumours and Speculation

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chrisc90 wrote:
28 Oct 2022, 17:00
So, back to one of the original comments I made on the early pages of this thread…
Is a small overspend worth the penalty?

Do you think we will see other teams trying similar in future years?
Yes, it appears “accidentally” spending £2m more than your competitors is worth it.

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dans79
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Re: 2021 Cost Cap Rumours and Speculation

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The real question is if they are over this year as well because they made the same "mistakes", and how much cost cutting will they need to do over the last 2 months of the physical year to ensure they get in under the cap.
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