The Formula One new financial regulations which limit teams spending win order to level the playing field have been hitting the headlines following their implementations for 2021. The Red Bull overspend of 0.37% saw the FIA issue their second largest fine ever and a 10% reduction in testing time for the next 12 months.
Gunther Steiner attempted this week to provoke the FIA into re-opening the punishment book on Red Bull, however both parties have reached a settlement agreement due soon to come into force.
F1 Cost cap increased
Yet despite the running commentary that ‘the matter is closed’ from TV broadcasters during the last Formula One weekend in Mexico, it may just be the beginning of a whole new chapter of money wars.
The financial regulations do allow for the budget cap spending limits to be adjusted for inflation, however the cut off date was too early to take into account the global shock received since the beginning of the war in Ukraine.
So the FIA commission sat in Spielberg at the 2022 Austrian GP and agreed to up this seasons spending limit by 3.1% from the original $140m.
All but one of the F1 teams accepted the increase, the dissenting outfit was believed to be Alpine.
Horner reveals where Red Bull spends less
Yet since then global inflation has soared and in the West into double digits which is driving growing concerns that the F1 spending limit for 2022 is nigh on impossible for some F1 teams to remain within.
Christian Horner believes Red Bull will not be one of those 6
“If I look at the 2022 rate of development, I think that other teams have put significantly more components on the car than us this year.
“If you look at crash damage alone, which again, is hugely expensive, and something I think that needs personally looking at within the cap – when you look at the quantum of some of the crashes this year, some of which are not the fault of your driver or your team, Max Verstappen is the driver that has incurred the least amount of damage this year. In terms of parts used, again, we are at the lower end.
“So one can never say with 100% confidence that we’re comfortably within the cap, particularly after the process that we’ve just been through.”
“But we feel that there are a lot of one-off costs that have been included within this. And we are confident and hopeful that with the process of these regulations being tidied up for the future, it will become less of an accounting world championship.”
Six F1 teams at risk of breach
Yet surprisingly Christian Horner now reveals there are 6 teams who have revealed to the F1 commission they are at risk of overspending this season.
“The danger for 2022 is there could be six teams in breach of the cap,” said Horner. “Energy prices have been exponential. Thankfully we’ve been protected.”
“There is that chance that several teams, many of which have stated during Formula 1 Commission meetings, will break the cap this year.”
Of course the FIA have set precedents with how they treated the Red Bull overspend where the 0.37% overspend received $7m fine and 10% reduction in aero testing time for 12 months.
$50m FIA fine possible
So a 5% overspend could see a team suffering losing most of their aero testing time and close to a $50m fine.
As Horner notes, ”The FIA have set a precedent with us to what amounts to a 0.37 percent overspend.”
“So the FIA has taken a firm and aggressive stance on that to demonstrate they will take any breach severely.”
The FIA will hopefully hit their deadline of June 2023 to announce which teams attain compliance certificates. If so, the F1 spending limits row will erupt much earlier than it did this season and again overshadow events on track.
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