The International Automobile Federation has announced that it will need more time to decide which teams have broken the $148.6 million budget cap. Depending on how the calculation is made, Red Bull itself admits that it may have broken the limit, which was set just last year. Aston Martin would also have been above. The new deadline is Monday, October 10th.
But Aston Martin’s infraction would have been minor. The big discussion is in relation to Red Bull and has to do with the way the team interpreted how the accounts enter the spending limit. And the decision in this case is even important for the future of a rule that was born last year after decades of discussions.
There are four companies that operate under the name of Red Bull and have some relationship with Formula 1. Red Bull Racing is the company that manages the team itself. Red Bull Technologies makes the car. Red Bull Advanced Technologies takes care of other projects outside of F1, but it is still an engineering-oriented company. And then there’s the newly formed Red Bull Powertrains dedicated to the engine design for 2026. What’s at stake is how to calculate costs when buying supplier-developed pricing, within this setup where it’s not Red Bull Racing itself. that makes the car. This leads to other issues for teams that have technical partnerships that can give them a performance advantage. To escape the cost cap, teams could increasingly outsource parts development, and the budget cap would weaken.
Another important point is that higher spending in 2021 has everything to bring a lasting advantage, since very few parts of the old car could be reused due to a rule change. And those rules will remain relatively stable for years to come.
What was also raised by the teams is the prediction of smaller punishments for those who break the ceiling by up to 5%, that is, in just over 7 million dollars. Laurent Mekies, director of the Ferrari team, explained that this money would allow, for example, the hiring of 70 engineers. And that can give you a big advantage on the track. Mercedes’ Toto Wolff gave another example. “We’re spending $3.5 million on parts that we bring to the car, so if someone says you can spend $500,000 more, that’s a big difference. he said, referring to Red Bull, which has managed to take around 20kg off the car since the beginning of the year, which was fundamental for them to overcome Ferrari, which started the season better, and make great strides to win both titles. of 2022.
Why is the spending cap important in F1?
The financial imbalance between the teams has always been a villain for the competitiveness of Formula 1, a category that forces each team to build its own car, unlike other motorsport championships. This is why the adoption of the budget cap in 2021, along with other measures that decrease aerodynamic development time depending on championship position, is so important for the future of the sport.
But it is one thing to understand the need for a ceiling that reduces this imbalance. Another is to create a regulation that does this effectively. One of the great difficulties is precisely this case of Red Bull. Teams are organized in different ways. There are those who buy a lot of parts from suppliers and don’t spend on development, and there are those who, like Red Bull, are spun off into several sub-companies that provide service to the team.
The financial regulation that debuted in 2021 has 54 pages and is quite complex precisely to try to close all the loopholes and not be unfair to any type of organization.
Half of the teams didn’t have to make major adjustments to enter last year’s $148.6 million cap. But especially the trio Mercedes, Ferrari and Red Bull struggled to shrink a budget that reached 400 million dollars (although that figure also includes driver salaries and marketing expenses, which are some of the exclusions from the ceiling).
It is not by chance, therefore, that rivals were closely marking each other, trying to calculate how much was being spent. And soon Mercedes and Ferrari began to distrust Red Bull. Although last year’s champion team with Max Verstappen submitted a report on under-spending to the FIA in March, they believed that not everything that should have been in the account had been recorded, and asked the FIA for a review. Red Bull, even, still does not know how this information reached the ears of rivals.
A curious point of this new FIA deadline is that, this weekend, Max Verstappen could win his second world title. He only needs to score eight points more than Charles Leclerc (that is, he is champion if he wins and does the fastest lap) and six more than teammate Sergio Perez.