The FIA's cost cap administrator has given his verdict and Red Bull has accepted it. World champion Max Verstappen's racing team has exceeded the budget limit for 2021 by £1.864 million and will be punished twice for it. With a $7 million fine and 10 percent less wind tunnel time.
Red Bull has been in the dock since the Japanese GP. The FIA Red Bull auditors accused the team of procedural errors and exceeding the budget limit by 1.864 million pounds or 1.6 percent. Red Bull denied the allegations and excused themselves with different interpretations at various costs.
After two weeks of negotiations with the FIA cost cap administrator, Red Bull finally agreed to the allegations and the penalty. Otherwise, the case would have been tried by a jury of independent judges, with potentially harsher penalties. The process could have taken six to nine months, depending on whether the defendant would then have gone before a civil court.
After a delay of five days due to the death of Red Bull founder Dietrich Mateschitz, the FIA presented its verdict on Friday (October 28th). It is divided into a fine and a sports penalty.
Less wind tunnel time for 2022
Red Bull has to pay seven million dollars and the costs of the procedure and forego ten percent of the wind tunnel time and CFD simulation capacities over the next twelve months. Since Red Bull, as world champion, is only allowed to test 70 percent of the standard value in the wind tunnel anyway, its occupancy time is reduced from 70 to 63 percent. In absolute numbers, this means: Mercedes, as third-placed, has 256 runs in the wind tunnel per year, Ferrari would have 240 runs and Red Bull has dropped from 224 to 202 runs.
Red Bull, in their own documentation, reported spending as £114,293,000, well below the £118,036,000 cost ceiling. The FIA auditors came to a different conclusion. They accused Red Bull of having misallocated or understated the costs in 13 points. The difference, which results from the different opinions, is surprisingly high at £5,607,000. This calculates the overbet amount of £1,864,000.
The penalty is based on the fact that Red Bull cooperated with the auditors, the financial rules are new and complex and that the racing team acted in good faith that their estimate of the costs was correct. In addition, Red Bull have incorrectly booked a £1.4 million tax break to their detriment. If you count that, the budget limit would only be exceeded by £432,652 or 0.37 percent.
Why did Red Bull make simple mistakes?
If the cost cap is exceeded by less than five percent, the offense falls into the "minor violation of the rules" category and can therefore only be punished to a limited extent. The fact that the racing team accepted the penalty further reduced the range of possible sanctions.
Red Bull's main culprit was cost allocation misconduct. The cost cap administrator accused the defendant of either misallocating or under-budgeting factory catering expenses, social security payments, bonuses, capital gains, apprentice salaries, engine usage costs, travel expenses and use of supplies .
An opposing team said after listing the incorrect postings: "In 75 percent of these cases there is no difference of opinion. It must be absolutely clear to everyone how these items are offset." In order to avoid different opinions on dubious items, the FIA had distributed guidelines to the teams in addition to the financial regulations. These were apparently ignored by Red Bull.
1.8 million is no trivial offense
The advantage for Red Bull was that the £1.864 million saved could have been used elsewhere. In better salaries, more staff, more parts or more development. However, team boss Christian Horner denied in advance that Red Bull had gained any competitive advantage for the 2021 and 2022 seasons. With all "relevant costs" one lies in the target.
The competition sees it differently. Exceeding 1.6 percent of the permitted budget cap is not a trivial offence. With an extra £1.864m you can do a lot in theory. That's the equivalent of five major upgrades or the salaries of 15 additional Engineers. That's why she thinks the penalty is too low.
Red Bull paid the seven million dollars from petty cash. The ten percent less wind tunnel time hurts, but does not correspond to the exaggerated sum. An engineer from a competitor says: "15 percent less wind tunnel would have been more appropriate. It is not enough to compensate for the monetary advantage. A penalty must go beyond that."
McLaren team boss Andreas Seidl thinks it's good that a line has now been drawn under the fishing issue: "You can discuss the amount of the penalty. Everyone will never agree on that. In terms of sport, it was good to see that the FIA won't just let sinners get away with it. I hope that's enough of a deterrent that no one tries to push the cost cap in the future." A colleague warns that the damage from less wind tunnel time is too dramatic. This saves Red Bull money that could be invested in additional engineers or other technical developments.Everyone agrees: If the budget cap is exceeded again in 2022, the penalties must be tougher.