As Formula One rolls into Belgium a little earlier than usual since – the race in Spa-Francorchamps has been moved from its traditional slot of being first up following the summer break – there are a number of stories bubbling up in the paddock which may dominate the headlines during the next four weeks when their is no racing.
This time of year is where new driver contracts speculation runs wild and Ferrari have openly threatened by Sainz who has indicated he will talk to other teams if the Scuderia do not extend his contract by the end of the season. Sainz has another year to run but recently explained:
F1 Spending cap row brewing
“I’m not going to lie, I don’t like going into my last year of a contract without really knowing where I’m racing the next year,” said the Spaniard.
“I went through that process both with Red Bull and Renault, and I know it’s not ideal as an athlete, and as a driver. It’s just not the right thing. And that’s why I have put this winter as a reference to try and figure out my future.”
Yet probably the biggest row of the season is brewing over the impending announcement from the FIA about which teams have been certified compliant with the spending cap audit and which teams are in breach.
Last season was the first where the FIA enforced the new financial regulations but their much delayed findings meant that by Singapore wild leaks and rumours were swirling around the paddock.
FIA fail to make deadline again
The FIA’s self imposed deadline for revealing the results of their team audits was originally the end of June each year, yet they were woefully late in 2022 causing rampant speculation and unfounded accusations of “cheating” and “stealing world championships.”
While finally F1’s governing body reached an accommodation with Red Bull Racing for a technical ‘minor’ breach which the teams had agreed when out was defined in the rules, the delay in their announcement was agreed to be inordinate.
As we approach the end of July, clearly the FIA have failed again to complete their deliberations within the self imposed deadline and again the word around the sport is that three teams are having to explaining themselves in depth and further likely breaches of the annual spending limit will be announced.
However the FIA have moved the goal posts after the event, issuing a technical directive demanding a particular category of spending now be included which was not during the 2022 audit.
Marko confirms 3 F1 teams rumour
Team’s are now clearly at risk of having significant expenses they thought were excluded now being included part way through the financial year.
Red Bull who were last year’s pariahs have repeatedly stated they have ensured they are uber compliant after the disastrous publicity they received for their previous ‘minor’ breach.
However there advisor Dr. Helmut Marko claims this weekend that there are indeed three F1 outfits at risk of sanction from the FIA.
“Apparently, three teams could have exceeded the limit,” he revealed to motorsport-total.com.
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Wolff admits “long” FIA spending scrutiny
Even the Mercedes’ boss Toto Wolff admitted in Hungary he has had “long chats” with the FIA auditors about compliance concerns they have over the silver arrows accounting.
Wolff was one of the most vocal of Red Bull’s critics last season stating that any breach in the spending limit was cold not be “minor”.
“If you’re spending five million more, and you’re still in the minor breach, it still has a big impact on the championship,” argued Toto. The five million he referred to was the limit of overspend agreed by the teams and the FIA to be designated “minor.”
At the time it had not been made public that the Red Bull ‘overspend’ would be around $500,000 around 0.37% in excess of the prescribed limit.
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Wolff insistent Mercedes ‘know every penny’
In an ever so slightly self righteous manner Wolff continued to explain how diligent Mercedes had been in their accounting process.
“To give you an idea, we obviously monitor closely which parts are being brought to the track from the top teams every single race – for the 2021 season and the 2022 season.”
“We know exactly that we’re spending – three and a half million a year in parts that we bring to the car. So then you can see what difference it makes to spend another $500,000. It would be a difference.”
Either Toto’s example of $500,000 from thin air was extremely lucky of he’d been in receipt of a leak from the FIA about the exact amount of Red Bull’s overspend.
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Red Bull hypercard project questioned
The “long chats” Wolff has been having with the FIA is very likely around the new technical directive brought in by F1’s regulator which seeks to prevent clever accounting between teams and their engineering divisions working on other projects.
Dr. Marko openly admits,”Red Bull is developing the (2025) RB17 hypercar, and there are people who work partly here and partly there. How do you account for that?”
Of course an organisation could spend a fortune on research and development for a hyper car’s aerodynamics and there would be cheap intellectual property gains when the results were handed for free to their associated F1 team.
Marko indicates there is too much room for interpretation in the FIA’s financial regulations and the entire issue must be further developed more clearly.
Too many cost cap loopholes
“The whole issue of the cost ceiling is still too open to interpretation and too weak on the facts. That’s why there are still discussions going on,” the 80 year old Austrian suggests.
“There are also people with us who no longer want to travel, who no longer want the pressure of Formula 1, so we can place them in such [other] projects.
“And if they do work in Formula 1 for a few hours, then you have to calculate those hours.”
“It’s a topic that needs to be improved,” concluded Marko.
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Toto changes his tune now
Toto Wolff is signing a different tune this year. Far from his claim it is easy to account for what is in and out of the spending allowance, the Mercedes boss now agrees the matter is much more complicated.
“It’s extremely difficult” for the budget cap inspectors to assess whether teams’ non-Formula 1 staff are adding performance to the F1 cars.
“Many teams employ thousands of people involved in commercial and non-commercial projects,” he noted.
“We have to improve that for the new regulations in 2026,” said Wolff.
Transfer of IP possible to apportion
Even now Marko and Wolff are oversimplifying the extent of the regulatory task. It is not simply about counting there number of hours an individual is spending on F1 and then apportioning their expense proportionally.
An entire team of people can work on a concept for another project and their labour costs would be millions. Then a single individual works on how to convert this knowledge into something beneficial for their F1 team – is that a fair apportionment?
Formula One teams have spent the entire history of the sport finding loopholes in the regulations that define the playing field. Its only natural they will find away to apportion costs away from their budget which arguably should be included.
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With the advent of the new engine regulations coming in 2026, one of the reasons Red Bull Racing may have elected to build their own power unit is simple.
For a power unit manufacturer which also owns a works F1 team, there is an enormous grey area between what are defined as power unit development costs and where the line is that separates this spend from the blending of the power unit into a harmonious package with the F1 chassis.
Yet another loophole for the FIA to close and toute suite.
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From P14 to P1 🤯@Max33Verstappen was simply unstoppable in Belgium last year! 🚀#BelgianGP #F1 pic.twitter.com/o0mHTfOXvy
— Formula 1 (@F1) July 27, 2023
