The Formula One paddock is obsessed with this seasons biggest dispute. Red Bull Racing have been found in breach of the FIA’s financial regulations and both they and the sport’s governing body have entered a process to find a “settlement agreement”.
When the budget cap rules were designed and agreed under the latest Concorde Agreement the FIA was not given unilateral power to penalise teams found in breach of the budget cap.
In fact once a team has refused a “compliance certificate” by the FAI’s financial audit team, the conclusion of the process could take up to 6 months.
Red Bull believe FIA calculation is wrong
At present Red Bull have been informed of the amount of the breach the FIA believes they have committed, however the team is entitled to challenge the premise by which F1’s governing body has calculated their overspend.
Red Bull believe the FIA have included spending items that are outside the remit of the budget cap and having taken a firm position stating they believe their financial submission was correct and the FIA have misinterpreted the rules which finds the Milton Keynes team being accused of being in breach of the cost cap.
Rumours have circulated this week that part of the problem is the way the FIA are treating spend on parts there were never used. The FIA are accused of changing how these items are treated in June this year, so components designed and manufactured but never used by Red Bull in 2021 are now included in the FIA’s count.
The dispute could run for 6 more months
If this is the case it is likely Red Bull will hold to their position and fight the FIA all the way to the International Court of Arbitration.
This may take the dispute into the start of next season which is not ideal for the FIA who according to the BBC have made an offer to Christian Horner’s team of a penalty which if accepted closes the matter. A “Settlement agreement” and appropriate penalty can then be signed off.
Neither party can comment publicly on the details of the breach or the offer until agreement is made. Yet as always “walls have ears” and whispers abound suggesting the penalty offered Red Bull believe to be too excessive.
Dr. Helmut Marko, a Red Bull consultant, has insisted that the talks continue and no agreement has been reached.
FIA suggested a penalty to Red Bull
Michael Schmidt of German publication AMuS suggests the “racing team has known for a week what punishment it faces.”
The punishment offered to Red Bull by the FIA is “allegedly a deduction of 25 percent of the wind tunnel time for the coming season plus a fine.”
Yet for a “minor breach” the team is said to believe losing a quarter of this R&D time is too severe a penalty for what they believe is a breach defined by the FIA’s interpretation.
The team winning the constructors’ championship which Red Bull will surely do this season, already receives a reduction in their aerodynamic testing allowance as the table below demonstrates.
If the top teams finish the WCC in their current positions, this would see Red bull Racing with just 45% of their aero testing allowance remaining from 1st Jan 2023 to 30th June 2023.
Red Bull set to have 50% aero testing of Mercedes
Mercedes would have almost double the allowance of Red Bull and given the cost cap breach is defined as “minor” by the FIA, the punishment to an independent observer feels heavy handed.
Schmidt alleges Red Bull boss Christian Horner briefly met with FIA President Mohammed Ben Sulayem at the Circuit of the Americas on Friday where he “supposedly made a counter-suggestion as to what punishment they could live with”.
“From the FIA’s point of view, it is up to Red Bull how quickly the process ends,” said Schmidt.
“If an agreement is reached with the cost cap administrator, the file can be closed immediately.
“If it goes to court, the matter can drag on for another six months.”
FIA leak may be investigated
However, it is probably the FIA who would prefer to close the matter is quickly as possible because if the matter goes to arbitration and then on to the Internal Court of Arbitration every little detail of how the FIA operates will be revealed and open to potential ridicule.
Already there have been suggestions the FIA’s approach to the Red Bull spending submission changed following an ex-Mercedes team lawyer joining F1’s governing body.
Christian Horner has also questioned why the FIA leaked the Red Bull breach during the Singapore GP weekend which saw Toto Wolff was incandescent with rage over Red Bull’s breach in compliance.
If the matter is dealt with as an “agreed settlement” the minor details of the whole saga will remain under wraps despite Ferrari calling for full transparency on the matter.
Earlier this week, @ToniCowanBrown hosted an exclusive event in Austin with Sebastian Vettel and a group of I / AM members.
— Aston Martin Aramco Cognizant F1 Team (@AstonMartinF1) October 22, 2022