Red Bull have been given a $7m (£6.05m) fine and a 10% reduction in aerodynamic testing for breaching the 2021 cost cap. The FIA’s decision was issued on Friday having concluded an agreed breach agreement with Red Bull and stated that the team had exceeded the £114m cap by £1.86m, what is considered under the regulations as a “minor” breach.
After weeks of speculation the decision, following an agreed breach agreement between the team and the FIA, was announced before the teams took to the track for this weekend’s Mexican Grand Prix. Red Bull have yet to comment but are set to hold a press conference later on Friday.
The financial penalty is a one-off payment, not a reduction in the team’s future budget cap and the aero restriction is a 10% reduction in time they can spend on wind tunnel or computational fluid dynamics work on their car.
The FIA said: “There is no accusation or evidence that RBR [Red Bull Racing] has sought at any time to act in bad faith, dishonestly or in fraudulent manner, nor has it wilfully concealed any information from the cost cap administration.”
The FIA cited costs including catering, social security, the new power unit wing of the team, fixed costs, apprenticeships, unused parts bonuses, travel costs and non F1-activities as the areas where the overspend had occurred.
The decision is not likely to be well-received by other teams who had remained within the cap including Mercedes, Ferrari and McLaren. All had been outspoken in their calls for strong sanctions with McLaren’s team principal, Zak Brown, having stated any breach of the cap was effectively “cheating”.
The issue has overshadowed F1 for several weeks now, with the teams that met the cap adamant that the FIA had to act with resolution to ensure the integrity of the process and avoid undermining the principle of the budget cap for fears it could be manipulated in the future.
Last week Mercedes’s Lewis Hamilton had warned that an insufficient punishment could render the budget cap meaningless. “Only having a slap on the wrist is not going to be great for the sport,” he said. “They might as well not have a cost cap in the future.”
The financial punishment not being applied as a sporting sanction to their budget cap will be seen as a relatively minor penalty for one of the top teams used to dealing with budgets in the hundreds of millions. Equally the only sporting penalty is not the restriction that would have been expected given other teams believe the advantage Red Bull may have gained could pay off across several years.
There will also be short shrift with the areas identified as where the overspend occurred. Other teams have already argued that any overspend in any area allows greater financial resources to be put into car performance.
The entire process is under scrutiny and will attract criticism. There has been a lack of transparency and unease at apparent negotiations taking place between Red Bull and the FIA over the terms of the breach agreement, not least in meetings which took place between the Red Bull team principal, Christian Horner, and the president of the FIA Mohammed Ben Sulayem, lending the process once more the suggestion of a deal done behind closed doors.
By concluding the accepted breach agreement with the FIA the team conceded they were over the cap and agree to the penalties the FIA impose. In so doing they limited the potential scale of punishments they might have received. They could have rejected the FIA decision in favour of presenting their case to an independent adjudication committee. However if the latter agreed with the FIA’s assessment Red Bull would have faced more severe sanction, including points deductions from team or drivers.
Both the FIA and Red Bull will hope to draw a line under the issue which has dominated F1 since the FIA first announced Red Bull’s overspend only a day after their driver Max Verstappen had secured his second title at the Japanese GP three weeks ago.
Since then Red Bull had insisted they believed their submission to the FIA had been within the budget cap, stating they were “surprised and disappointed” with the FIA’s assessment at the time.
Given that the breach was considered minor by the FIA – below 5% of the cap – it was understood that the FIA were not going to impose a penalty that would have affected the outcome of the 2021 world championship which Verstappen won by just eight points from Hamilton at the last round of the season
F1 introduced the budget cap in an effort to level the playing field between the teams. Its success very much depends on it being seen to be policeable and enforceable with effective penalties as a deterrent to further overspending. The FIA’s stance on the issue is the most important it has faced since its much-derided report into the controversial events of last year’s season finale in Abu Dhabi.
