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Red Bull Racing

Red Bull could face consequences for breaching budget cap

The team was convinced that it did not commit any breach of the budget cap, but findings revealed by the FIA into their 2021 financial report tell a different story.

Verstappen Hamilton Italy
Article
To news overview © Getty Images / Red Bull Content Pool

It was nearly an hour after the FIA released its findings into the 2021 Formula 1 budget cap team financials that Red Bull released a statement claiming they did not breach the $145 million cap.

Despite the governing body's findings claiming they committed a "minor" overspend, the
team said they were "surprised" and noted the ruling with "disappointment."

In the days prior to the FIA releasing its statement, speculation was rife among the top teams over whether Red Bull had committed a breach. Red Bull Team Principal, Christian Horner hit back at "inflammatory" comments made by other teams, maintaining that they were not in breach of the limit.

Mercedes Team Principal, Toto Wolff said that any breach would be a "heavyweight" offence given the performance gains it could yield for not only 2021, but for the years following.

Despite what the FIA called "unsubstantiated speculation and conjecture" being thrown around by the top teams, it was clear they wanted to see credible action taken if any breach was found.

Seven teams comply

Seven teams have received the 'Certificate of Compliance' for adhering to the budget cap in 2021.

This does not include Williams for their earlier procedural breach that resulted in a $25,000 fine and Aston Martin, who also committed a procedural breach relating to their administration accounting protocols.

Red Bull committed both a procedural breach and a minor overspend breach of the $145 million cap, which means they went over by less than 5%.

While the full amount Red Bull went over is currently unknown, Lewis Hamilton has previously claimed that if his team spent £300,000 more in 2021, it would've enabled them to win the Drivers World Championship last year.

Now it appears the governing body is contemplating the next steps in what is a completely new regulation process for F1.

			© XPBimages
	© XPBimages

How is a budget cap breach possible?

The teams work with the FIA closely throughout the year with auditors to do a review of the 'Reporting Documentation' submitted.

In their statement, the governing body said the process was "intensive and thorough," emphasising that the FIA Cost Cap Administration claimed all competitors "acted at all times in a spirit of good faith and cooperation" throughout the process.

Horner noted in conversation with media, including RacingNews365, that because this is a new set of regulations he believes the complicated process will lead to different interpretations.

"It is of course a new set of regulations, the financial rules," said Horner.

"They are also very complicated, those rules, so they will inevitably be interpreted and applied by the teams in different ways.

"Obviously this is the first time we've had to hand in the [financial] numbers [to the FIA].

"Even after we've handed in our numbers, we've had some clarifications about the rules, so that just goes to show how immature the process and the rules are."

In their statement yesterday, the team claimed that the 'relevant costs' are under the $145 million cap.

They said: "Our 2021 submission was below the cost cap limit, so we need to carefully review the FIA's findings as our belief remains that the relevant costs are under the 2021 cost cap amount."

Accepted Breach Agreement

There are several potential penalties that could be levied towards Red Bull for the minor breach, but in one case they could enter into an 'Accepted Breach Agreement (ABA)' with the FIA.

This is what Williams did earlier in the season, whereby the team took the blame for the procedural breach and accepted any penalty that was given to them. In this case, an appeal against a penalty would not be possible.

But the advantage of an ABA would mean that no points could be deducted by the FIA, nor can the teams budget for the future be reduced as a penalty.

The team could still be banned from one or more sessions, including a testing or qualifying session, allocated less aerodynamic time in their wind tunnel, or receive a public reprimand.

Could Red Bull prove its innocence?

Red Bull could attempt to prove they are innocent and chose not to take the blame for going over the cost cap amount.

The team seem convinced certain aspects of the cost cap amount should not be included, thus making them under the $145 million threshold.

But if they are found to not be the case, it could be that they receive a deduction in championship points in both the Constructors' Championship and Drivers' Championship.

These penalties will be determined by the FIA Cost Cap Adjudication Panel made up of six to 12 judges, and can be contested through the International Court of Appeal.

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