"If you think back to how long we have been playing with technical regulations and sporting regulations to make them rock solid as a sport? You have to admit the financial regulations are still a very young set of regulations, and how do we collectively make them enforceable? How do we make them equitable in all situations? It's a big challenge right now. We know it is going to take time. "We feel the FIA should have the power to make sure that the rules are [applied fairly] and have the freedom in that case to make sure that the system doesn't explode because of early days difficulties. And we certainly think that in the long run, these will be very good regulations for everybody. "In the first early years, we need to be very careful to make sure we reach, as early as possible, the right level of enforcement and the right level of definition. I think in the meantime, we need to have to have some flexibility from all parties to avoid allowing things to collapse." Who said these words, when and under what circumstances? Here's betting that the vast majority of readers with even the slightest understanding of the current cost controversy will attribute the above passages to Red Bull team boss Christian Horner. Indeed, it is highly likely a timeframe within the past fortnight will be pinpointed. Yet, the paragraphs were 'lifted' verbatim from a response given by Ferrari Racing Director Laurent Mekies to a cost cap question posed by RacingNews365.com during May's official Spanish Grand Prix Saturday press conference transcript. Thus, well before suspicions fell upon Red Bull, indeed, upon any team.
The complexities of F1's financial regulations
Inclusion of the Mekies' quotes does not imply that Ferrari are in breach of any FIA regulatory provisions – crucially, the team were given the all-clear for 2021 – but the Frenchman's comments indicate how difficult it is for teams to grasp the full intentions of each clause and for the FIA to police what is effectively a set of immature and constantly evolving regulations. Mekies, though, went even further: "Therefore the key question is how do you deal, how do we deal collectively with these early years of the regulations, where we know there are grey areas, where we know there are things that needs to be improved?" Indeed, so complex are F1's FinRegs that one team boss told RacingNews365.com they had submitted over 100 requests for clarification; another that their full submissions ran to 75 000 line-items! Now consider that Britain's Companies House rules require companies to submit their FULL annual accounts by 30 September of the following year, while the FIA's deadline is 30 March. While there are no excuses for breaching cost cap limits – just as there are no excuses for breaching track limits – the fact is drivers are given three shots at exceeding (clearly defined) track limits before punishment and are required to 'give back' any advantages so gained without penalties. Clarifications issued for sporting or technical matters are seldom (if ever) retrospective, whereas the financial clarifications are backdated. Now consider that the financial regulations were forced through as part of the 2021-25 Concorde Agreement, having been largely framed by Liberty Media's Chief Financial Officer (his LinkedIn profile makes a virtue of this) despite EU directives that there should be a hard split between regulatory (FIA) and commercial (F1) matters, and that the original regulations were hastily amended and the cap reduced under Covid by $30 million.
What is the appropriate punishment for a breach?
That said, a breach is a breach regardless of percentages, and thus it is proper that Red Bull are penalised if guilty, but, the question is: What is appropriate? Ask Ferrari's tifosi and the answer is likely a lifetime ban; solicit input from Lewis Hamilton's fan boys and the response is well documented: Overturn the 2021 Abu Dhabi results, this time on cost cap grounds. Red Bull reckon they have done nothing wrong, that it's down to interpretation. The matter is further complicated by the fact that no precedents exist, nor do the regulations prescribe a tariff of penalties as per other transgressions. While it is de rigueur to blame the FIA for all F1's ills, this overlooks a) the FinRegs were imposed under the previous (Jean Todt) administration and inherited by Mohammed Ben Sulayem and his team, and b) all teams and F1 had input into every step of the process. It is against this background combined with arguably unconstitutional (or even illegal) regulations that the current FIA's Cost Cap Administration department is required to judge Red Bull's alleged overspend of around $1.8m on the $145m cap (a breach of 1.2%). This despite there being, as per Mekies, "a big challenge right now to make [the regulations] equitable in all situations".
Why the FIA owes fans an explanation of findings
In short, the governing body is damned either way – regardless of sanction – while Red Bull had long been hung, drawn and quartered in the court of public opinion (and supreme court of team bosses) before even the final figures were known. Indeed, during the Singapore weekend rivals spoke freely of $7.5m overspends while one Italian media outlet mentioned a figure of $10m, seemingly obtained on good authority… Ultimately the CCA needs to judge on motives: Did Red Bull intend to breach the cost cap or were there genuine cases of (mis)interpretation? The best comparison is the difference between bona fide racing incidents and instances of drivers deliberately crashing into others. If Red Bull are found to have wilfully underreported spend by massaging numbers into place, then they deserves to have the book hurled at them, spine first. The fact that the FIA offered Red Bull an Accepted Breach Agreement as provided for by the regulations for minor breaches (1.2% remember) suggests the governing body found no evidence of wilfulness or deliberate fudging – the matter would immediately have been referred to the Cost Cap Adjudication Panel, which is empowered to impose a raft of sanctions, including loss of points, bans on team personnel and exclusion. However, more than an appropriate penalty, the FIA owes the entire sport – from its fans through to sponsors and all teams to the media – a comprehensive review of its findings and plugs all 'grey areas' post haste. Only then will we all know whether the punishment truly fits the crime; plus, of course, a precedent will have been set.
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