The FIA find themselves in a bind following the revelations yesterday that the cost cap for the Formula One 2021 season was breached by Red Bull Racing. The overspend has been classified as ‘minor’ which means it is within a 5% variance of the $145m limit set.
However, if the overspend was up to the full 5% this would mean Red Bull had an extra $7.25m in their budget which is huge.
As Martin Brundle noted on Any Driven Monday, that sort of extra cash, “that’s a massive upgrade on a car, or even a B-Spec [car] for some teams.”
FIA range of minor overspend too large
Further the implications go way beyond the year of the budget cap breach.
“Other teams are saying ‘look this gives you a head start for 2022, the cars are carried over for 2023, so this is a big advantage’,” added the Sky commentator.
The reason the FIA are in a bind is because the ‘minor overspend’ range of actual dollars is way too large and the range of penalties runs from a reprimand, reduction in CFD/wind tunnel time, cut to following years budget and even to driver and manufacturer points deduction.
But how much overspend deserves a reprimand? Then what is the next penalty to be applied?
F1 sporting or financial penalty
The lack of clarity as to whether overspend should be a sporting regulations penalty or a financial one has not served the FIA well.
Lewis Hamilton has claimed had Mercedes spent another $300,000 he would have won the championship. The fact he and Mercedes decided – for performance reasons only – to fit a new power unit at round 19 in Brazil, winning there and the next two races at a cost of around $7m is neither here nor there.
The next question for the FIA is did the overspend actually affect the 2021 season or was it allocated to the 2022 car development?
FIA and Red Bull to agree penalty
Because if a sporting penalty like a points deduction is to be applied then it should fall where the benefit of the illegal spend was made. Otherwise penalties become arbitrary and lose the respect of the paddock.
For this very reason the FIA have created a process where now Red Bull Racing and they will meet. They will try to agree a settlement.
Red Bull may wish some of the alleged overspend recategorising and the FIA would prefer them to accept a penalty quickly. If the matter can’t be resolved at this stage, panels of Judges get involved and possibly even the FIA International Court of Arbitration.
FIA deduct points the following year
The first decision to be made and will set a precedent is whether the Red Bull sanction is of a sporting nature, financial nature or both.
Gary Anderson, ex team chief designer, believes he has a pathway the FIA can use to plot how to apply penalties based upon existing financial arrangements between the FIA and the teams.
If a race season is cut short by one race, the teams’ budget is cut by $1.2m. This is the value the FIA places upon the points the teams can score in a race argues Anderson.
“So use that $1.2m per race cost when penalising an overspend. For every $1.2m a team has overspent by, that’s one race it can’t score in,” says Anderson. This of course also solves the conundrum of whether it is the manufacturer or driver points that should be deducted. Both suffer.
F1 Finacial and Sporting penalty
The FIA have a regulation about team’s missing races, so a team being banned from scoring in a race would still need to attend to avoid further sanctions.
Anderson further argues the overspend should be removed fro the following seasons budget.
“As an example, an overspend of say $6m in 2021 means you remove the points from the team and drivers for the last five races ($1.2m per race) of 2022,” Gary continues.
“With the cost cap for that team in 2022 also reduced by $6million so a cost cap for that team of $134m this year.”
No rewriting F1 history
The any overspend in 2022 would see the process repeated in 2023. This of course prevent s F1 having to continually rewrite the history books and crown new champions 9 months after the FIA gala where the seasons prizes are presented.
“So it becomes more of a forward problem – which gives them an opportunity to do something about it rather than a past problem for the team committing the offence,” Anderson concludes.
The original audits for the 2021 season were due to be completed by June 2022. Whether you believes the FIA has dithered or just been finding its way, with just 4 races to go Anderson’s example would not work on a $6m overspend. There are too few races left.
Yet as the FIA audit process improves, this solution provides both a financial and sporting penalty for a team in breach, and they get advance notice of where the penalty will fall rather than a retrospective decision which may feel unpalatable all round.
Below is why Red Bull want Colton Herta….
— Motorsports on NBC (@MotorsportsNBC) October 10, 2022