F1 budget cap breach: what Red Bull risks if found guilty

The Formula 1 paddock arrived up in Singapore with news that threatens to push the entire Marina Bay weekend into the background, despite the fact that the Singapore events is returning to the world calendar after a two-season absence.

According to recent reports, the FIA would in fact intend to communicate the results of the verification carried out on the how teams respected – or not – the budget cap in the 2021 Formula 1 season. Several media outlets, including the authoritative Corriere della Sera and Auto Motor und Sport, indicate that there are two teams that would have violated the budget limit in the last championship, which was at 145 million dollars: Aston Martin and Red Bull.

Inevitably, the eyes of the world are on the latter, as the Milton Keynes team won their last driver’s title with Max Verstappen at the end of an all-out battle against Lewis Hamilton and Mercedes. Furthermore, according to what these newspapers reported, the violation by the Austrian team would be a lot higher than that of Aston Martin. Mercedes and Ferrari are on a war footing and are demanding exemplary sanctions if irregularities are confirmed.

Both teams then suspect that the team headed by Christian Horner has not respected the financial regulations even in the current season.

The focus of the FIA, however, for the moment is only on the last championship, for which the Federation has been able to evaluate the complete reports. But if infringements of the regulation were actually confirmed, what would Red Bull risk? To understand this, we need to carefully analyze the financial regulation of Formula 1. The first major factor for establishing any punishment is the extent of the violation: points 8.10 and 8.12 of the regulation use a 5% exceeding of the budget cap as a matric. If the value is lower, the infringement will be considered ‘slight’, if the value is greater, the infringement would be considered ‘serious’.

There are also factors that can mitigate or exacerbate the extent of the sentence. If a team proves that it has been forced to exceed the limit for reasons of force majeure – for example – or if it declares itself by highlighting irregularities in its accounts, the penalty can be mitigated. Conversely, if the violations are repeated or bad faith and willingness to commit fraud is demonstrated, the sanction will be further burdened. In concrete terms, the spectrum of possible punishments inflicted on a team is very broad. The first option is that of a financial penalty – that is a fine – which can be more or less high depending on the extent of the infringement.

Alternatively, it is possible to apply sporting sanctions that can range from reprimand to the deduction of points in the standings – both for the drivers and for the team – up to disqualification for one or more races. On a theoretical level, therefore, even the 2021 drivers title won by Max Verstappen could be at risk. In all the relevant precedents in which a team has been sanctioned for irregularities (non-financial in those cases) – for example McLaren in 2007 or Ferrari ahead of the 2020 Formula 1 championship – however, there has never been a direct punishment of the driver. . These are hard precedents to ignore.

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It is also possible to penalize a team by limiting its ability to conduct aerodynamic or other tests. Individual sanctions are also applicable that affect the team principal or individual team member if his direct responsibility for the infringement is ascertained. Given that the most serious case would be that of a breach of the budget cap for more than 5% of its limit, we report below what would be the penalties that Red Bull, or any other team caught out, could face in that case. The FIA may also decide to apply multiple penalties at the same time.

(i) deduction of the Constructors’ Championship points awarded for the Championship that took place during the Reference Period.
(ii) deduction of the points of the Drivers’ Championship awarded for the Championship that took place in the Reference Period of the violation.
(iii) suspension from one or more events of one or more competitions, excluding, for the avoidance of doubt, the race itself;
(iv) limitations on the possibility of carrying out aerodynamic or other tests;
(v) the suspension from an entire Competition or from more Competitions, including, for the avoidance of doubt, the competition itself.
(vi) exclusion from the Championship; or
(vii) reduction of the Budget Cap, provided that the penalty referred to in Article 9.1 (c) (vii) is applied only in relation to the Reporting Period of the entire year immediately following the date of full year reporting, where applicable).