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Red Bull breaking the budget cap

    • 49 posts
    October 17, 2022 10:22 AM EDT

    Red Bull budget cap breach 'constitutes cheating' - McLaren boss Zak Brown

     

    Brown calls for penalties that will hit Red Bull financially and on the track.

    "Any team who have overspent have gained an unfair advantage both in the current and following year's car development," he writes.

    Brown adds the FIA should "communicate subsequent action and penalties at pace to maintain the integrity of F1".

    The letter, which has been seen by BBC Sport, is dated 12 October and is addressed to FIA president Mohammed Ben Sulayem, and copied to F1 president Stefano Domenicali.

    It was sent on Monday to the teams who in addition to McLaren have not committed any cost-cap offences - Ferrari, Mercedes, Alpine, Alfa Romeo and Haas.

    The FIA announced last week that Red Bull were guilty of a "minor" breach of the cap - the lesser of two categories of offence under F1's financial regulations - as well as a procedural breach.

    The dividing line between "minor" and "material" offences is 5% of the cap - or $7.25m in 2021.

    The FIA has not yet provided any details of Red Bull's wrongdoing, the negotiations that took place between the two parties before the team's final accounts were settled, or any penalties that may be handed out.

    Aston Martin have also been found to have committed a "procedural" breach.

    Williams were fined $25,000 in May for an earlier procedural breach.

    Red Bull declined to comment when approached by BBC Sport about Brown's letter. The team said last week they were "surprised and disappointed" by the FIA's decision, adding: "Our belief remains that the relevant costs are under the 2021 cost-cap amount."

    McLaren were contacted about the leak of the letter but declined to comment.


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    Red Bull driver Max Verstappen won a close title fight with Mercedes' Lewis Hamilton last year in controversial circumstances at the final race of the season, and clinched his second championship at last weekend's Japanese Grand Prix, with four races of the 2022 season still to go.

    What does Brown's letter say?
    Brown's letter does not mention Red Bull or Aston Martin by name, which is apparently an attempt to make it clear he is expressing his views about any potential cost-cap breach.

    However, it does directly reference the offences announced last week.

    Brown praises the FIA's work on the cost cap, and says policing it is "critical" to the sport's future.

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    He suggests any team guilty of an overspend should be hit with a fine equal to double the amount by which they have breached the cap, and for a reduction in their permitted research and development next year.

    He writes: "The overspend breach, and possibly the procedural breaches, constitute cheating by offering a significant advantage across technical, sporting and financial regulations.

    "The FIA has run an extremely thorough, collaborative and open process. We have even been given a one-year dress rehearsal (in 2020), with ample opportunity to seek any clarification if details were unclear. So, there is no reason for any team to now say they are surprised.

    "The bottom line is any team who has overspent has gained an unfair advantage both in the current and following year's car development.

    "We don't feel a financial penalty alone would be a suitable penalty for an overspend breach or a serious procedural breach. There clearly needs to be a sporting penalty in these instances, as determined by the FIA.

    "We suggest that the overspend should be penalised by way of a reduction to the team's cost cap in the year following the ruling, and the penalty should be equal to the overspend plus a further fine - ie an overspend of $2m in 2021, which is identified in 2022, would result in a $4m deduction in 2023 ($2m to offset the overspend plus $2m fine).

    "For context, $2m is (a) 25-50% upgrade to (an) annual car-development budget and hence would have a significant positive and long-lasting benefit.

    "In addition, we believe there should be minor overspend sporting penalties of a 20% reduction in CFD and wind tunnel time. These should be enforced in the following year, to mitigate against the unfair advantage the team has and will continue to benefit from."

    What rule changes does he suggest?
    Brown proposes changes to the rules to address what he sees as weaknesses, exposed by the process of administering the cost cap in its first season.

    "To avoid teams accumulating and benefiting from the multiplier effect of several minor overspend breaches, we suggest that a second minor overspend breach automatically moves the team to a major breach," he writes.

    "Finally, given the financials involved, a 5% threshold for a minor overspend breach seem far too large of a variance. We suggest a lower threshold, 2.5%, is more appropriate."

    A call for transparency


    Brown makes it clear he feels the FIA should release details of the offences as soon as possible.

    "It is paramount that the cost cap continues to be governed in a highly transparent manner, both in terms of the details of any violations and related penalties," Brown writes.

    "It will also be important to understand if, after the first full year of running and investigating the scheme, there needs to be further clarity on certain matters or any key learnings. Again, any insights or learnings should be shared across all teams - there can be no room for loopholes."

    He concludes the introduction of a budget cap has been critical to the success F1 is enjoying at the moment.

    The cap was introduced in 2021 as part of a package of changes aimed at closing up the field and making the racing more competitive.

    Brown writes: "The-cost cap introduction has been one of the main reasons we have attracted new shareholders and investors to F1 in recent years, as they see it as a way to drive financial and sporting fair play.

    "It is therefore critical that we be very firm on implementing the rules of the cost cap for the integrity and the future of F1."

    It has not yet been made public whether Red Bull will accept the FIA's findings and enter into what is known as an "accepted breach agreement", or reject them and demand to go before the so-called cost-cap adjudication panel.

    The budget cap was introduced last year, and it has taken until October this year for the FIA to release its findings because of the complexity of the process.

     

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