FIA in a no-win situation, regardless of F1 cost cap rumours

Henry Valantine
Max Verstappen, Red Bull, during the Italian Grand Prix. FIA Monza, September 2022.

Rumours surrounding overspending have put the FIA in a tough spot, simply because this has never had to be policed before.

Red Bull and Aston Martin are reported to be under threat of having potentially breached the budget cap for the 2021 season, and there are multiple penalties available to the FIA based on the degree of any overspending.

Reports have since emerged that Red Bull in particular are thought to have come in under, or are at least closer to the spending limit than what had been rumoured – with Mercedes and Ferrari having been vocal about the possibility, Toto Wolff in particular calling it a “heavyweight issue” in the sport.

Red Bull team principal Christian Horner has vehemently denied the allegations of his team having overspent in 2021, hinting that the team could take legal action if the ‘defamatory’ claims are found to be untrue – while Aston Martin boss Mike Krack says the rumours are “upsetting” for the Silverstone team.

The FIA’s Cost Cap Administration’s budgetary reports are due to be complete by Wednesday, with certificates of compliance set to follow afterwards. But if any breaches are found, what do they do next?

Ferrari sporting director Laurent Mekies probably said it best in Singapore regarding the impending report, because what the governing body does first will most likely decide its future in budget cap enforcement.

“This is pretty much one of the main reason why we are banging [on] about transparency and severity because if it is… if it turns out to be something that a team can bet on in order to gain a competitive advantage, then the whole system collapses,” he said.

“And this is why especially in the framework of the very first instance of the budget cap being challenged, you need that amount of severity.”

There are multiple punishments available to the FIA in both Minor and Material overspends of cost cap limits during the Reporting Period (the 2021 season in this case), with Material overspends carrying more stringent penalties.

The full ramifications are listed in full in our handy guide, but here is a brief summary:

Minor Overspend Breach (budget cap overspend of 5% or lower)

– Public reprimand

– Deduction of Constructors’ Championship points awarded

– Deduction of Drivers’ Championship points awarded

– Suspension from one or more stages of a Competition or Competitions

– Limitations on ability to conduct aerodynamic or other testing; and/or reduction of the Cost Cap provided that the reduction specified shall only be applied with respect to the year following the punishment being handed out

Material Overspend Breaches (budget cap overspend >5%):

– Deduction of Constructors’ Championship points awarded

– Deduction of Drivers’ Championship points awarded

– Suspension from one or more stages of a Competition or Competitions, excluding for the avoidance of doubt the race itself

– Limitations on the ability to conduct aerodynamic or other testing

– Suspension from an entire Competition or Competitions

– Exclusion from the Championship

– Reduction of the Cost Cap provided that the reduction specified shall only be applied with respect to the year following the punishment being handed out

You will notice above that many of these punishments overlap, with the theory of Minor Overspend Breaches carrying less of a penalty than their Material Overspend equivalents, though these penalties may take the same form.

Even if everything is confirmed as being above board for the 2021 accounts, as and when a team does break the rules in the future, there is an important precedent which will be set by the governing body.

And where 2021 specifically plays a big part in this boils down to one thing: The Drivers’ Championship.

We all know how it ended by now, with eight points between Max Verstappen and Lewis Hamilton come the chequered flag in Abu Dhabi. And while reports now say it is unlikely Red Bull have been in major breach of the cost cap, any overspend could theoretically have improved their performance, thus helping Verstappen get over the line last year.

From that sense, if the FIA’s rules were to be tested, this would be the worst possible time for the first infringements to have occurred – as they could have had title-changing consequences if circumstances went that way.

It’s at this moment where we could argue that the governing body may have spread themselves too thinly regarding the penalties they can give, especially in the Minor Overspend category.

Award a Drivers’ Championship points penalty? They’ll be appealed against in case the team can get away with a cost cap reduction instead, and if they do get fined, would the prize have been worth the penalty?

Then on the other side, if anyone could profit from a points downgrade, they’d then likely push back against the FIA and try to get the offending team penalised in the way that most helps them.

Paddock politics will always play a part in things, but given the unknowns of Formula 1 in the budget cap era, the FIA will have to be iron-clad in their decision-making when breaches do happen, as well as crystal clear in their reasoning behind the punishments they do give, even if that is not the case this year.

Whatever happens, be it in 2022, 2023 or beyond, the FIA must treat any breaches with the punishments they deserve, whichever ones they may be. They will probably just have to brace themselves for a host of appeals to follow afterwards.

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