Red Bull “crafty salary trick” to avoid budget overspend

This week the FIA finally revealed which Formula one teams had complied with the 2021 regulated spending limit of $145m. F1’s governing body were due to report in June the results of their audit of the 10 teams however given financial regulations are new to the FIA they appear to have underestimated the resource they required to undertake this action.

As Ferrari boss Mattia Binotto explained the FIA will take time to find its way in policing the cost cap.


Cost Cap regulations early days

“It needs to be policed and monitored. I fully trust the FIA, but the financial regulations are completely new regulations.

“And if you look at the technical or sporting [regulations], it’s many years it’s in place. Yes, you are retuning, changing a bit the chassis, but still [the budget cap] an unknown field, both from the FIA and the teams.

“We know exactly where things can be done, where it needs to be policed. That is why the financial regulations are completely new regulations for both the teams and the FIA.

“And it will take the time for the FIA, for the teams, to know it, to interpret it and clarify it, police it and monitor it,” Binotto told Autosport



Toto Wolff uproar storm in a tea cup

So the uproar expressed particularly by Mercedes boss Toto Wolff over what the FIA has defined as a ‘minor breach’ by Red Bull is clearly a storm in a tea cup.

Wolff claimed in Singapore Red Bull had “massively” overspent and Lewis Hamilton claimed just $300,000 more spend from Mercedes in 2021 would have seen him win more races – and presumably the championship.

Yet it appears Wolff’s claim was overstated and FIA Vice President Robert Reid appears to imply the Red Bull overspend has been overhyped.

“Monday will come and go, and I’m sure we’ll quickly move on to the next year’s analysis,” said Reid at the Japanese GP.



Red Bull breach a salary allocation dispute

Red Bull’s overspend appears to be one based upon an incorrect categorisation of salary. Red Bull Racing own other companies such as Red Bull Technologies and the newly developed Powertrain division. Certain staff work part time across different companies and their salaries have to be apportioned accordingly.

The same situation exists at Ferrari, Mercedes, Alpine and McLaren who all have other automotive divisions beside the racing team.

The cost cap regulations allow the F1 teams to exclude their top 3 earners from the restricted spending limit and bow German publication AMuS claims the Red Bull overspend disagreement with the FIA boils down to salary apportionment.



Newey not employed by Red Bull Racing

Despite his reported $9m income a year from the Red Bull Group, AMuS claim Red Bull have not categorised Newey as one of their top three earners.

Newey has been working on other projects besides the F1 team such as an America’s cup challenger and the Aston Martin Valkyrie supercar.

These projects are likely to be Red Bull Technology activities and Newey may well sit within this payroll.

AMuS claims Newey has then been subcontracted to Red Bull Racing for there design of the 2022 RB18 so only his salary related to Formula One activities for Red Bull are included.



FIA challenge Red Bull salary apportionment

It appears the FIA have objected to the way Red Bull have made this apportionment and it is this ‘craft salary trick as AMuS describes it that has seen Red Bull’s F1 spending submission revised up by the FIA.

The problem for the FIA is they have way too few staff attempting to complete the audit of the F1 teams’ annual spending.

Mattia Binotto revealed when the first deadline was missed by the FIA to reveal their findings on the 2021 budget cap.

“If I look at how big is the team on the FIA, the financial monitors of the situation… three, four, five people, compared to the tens they have on the technical [side], I’m expecting that maybe in a few years’ time it could be tens of people financially monitoring what’s going on with the budget,” he argued.



FIA audit team of 5 grossly inadequate

In the UK an audit of a company that had a combined spend in excess of $1.45bn – which is the F1 budget cap multiplied by ten teams – would consist of scores of auditors.

So Binotto is right in his belief the FIA are vastly understaffed to properly complete the Cost Cap audit reviews and certainly to do this within three months of the teams submissions.

If the Red bull overspend is in fact a salary categorisation dispute between the FIA and Red Bull then it will be argued this is all part of the learning curve for the new regulations.

Red Bull will receive a relative slap on the wrist and as FIA Vice Chairman Robert Reid suggests, F1 will move on to the next controversy.

READ MORE: Mercedes blow way more than Red Bull cost cap breach

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