British former racing driver and current commentator for Sky Sports, Martin Brundle, feels that the FIA has to rethink the budget cap rules and reduce the margin of overspend that at the moment represents just a “minor” cost cap breach for Formula One teams, describing the current five per cent value as “absolutely crazy” and “way too much”.
Yesterday the FIA officially published its findings regarding the financial reports and certification compliance process for all F1 teams based on their level of spending in the previous F1 campaign.
As expected, Aston Martin and Red Bull were confirmed to have committed procedural breaches, but the most important confirmation was that the Austrian side was found guilty of overspending more than the $145 million limit for the 2021 championship. Yet Red Bull will most likely not receive a harsh punishment given the fact that in its report the governing body described Red Bull’s overspend as a “minor” breach. The concept of “minor” in Formula 1’s financial rules means that the team did not spend more than 5% beyond the limit, which is a value anywhere between $100,000 and $7.5 million.
This represents a very wide variance that should be changed, as explained by the Sky Sports commentator:
“What seems absolutely crazy to me is that a minor breach can be up to five per cent overspend on the cost cap,” Martin Brundle said, after the FIA published its conclusions on Monday – “That is $7m and we know that is a massive upgrade on a car, maybe even a B-spec for some teams. So, that needs tightening up for starters, because what is the point in having $145m and then having this five per cent variant? Other teams are saying, ‘this gives you a head start into 2022, the car is carried over to 2023 so this is a big advantage’. It has got to be made clear that you stick to the cost cap or just under it or otherwise it is going to hurt. We’ll see if the FIA want to come down hard on the first year. But certainly it needs tightening up. We need clarity and it needs to be rigid and a five per cent variance is way too much.” – he explained.
Any procedural rule breaches should be sanctioned with a financial penalty by the FIA. However, when it comes to a “minor” infringement, the Cost Cap panel can give a financial penalty but at the same time a minor sporting penalty can be taken into consideration. Among the possible penalties there is a public reprimand, deduction of constructors’ championship points, deduction of drivers’ championship points, suspension from one or more stages of a competition (excluding the race), and most importantly limited development time in the wind-tunnel or other testing tools, alongside a decrease of the budget cap available for the next year, which is what Ferrari and Mercedes hope that the FIA will eventually decide in Red Bull’s case.
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Martin Brundle was not very pleased with the FIA’s relatively vague press release, which was made without any comments on the sanctions that could be levied upon Red Bull. The former F1 driver feels that this could lead to some negotiations behind the scenes.
“It’s very disappointing that that information hasn’t been supplied. We’re talking about the 2021 season, not this season. Quite why they haven’t been able to get to the details… presumably there’s some squabbling going on behind the scenes to mitigate this to explain and come up with some reasoning. But it’s thoroughly disappointing that we’ve now had this announcement of what’s happened, but we don’t know the consequences.” – he added.
When asked about how this moment can impact the future of F1 and especially the budget cap rules, Martin Brundle pointed out that strict corporate governance and compliance, maybe enforced by a legal document covering the accountability of a company’s chief executive and CFO, which is common practice in large corporation such as Mercedes, would maybe represent a better solution to prevent teams from finding ways of spending more without being caught.
“I think all of the teams will be somehow or other making the absolute most of their interpretation of these regulations – overheads are certainly no longer for this department or which personnel are over there working on something else…. But I think also – and it’s a good thing – that the corporate governance of somebody like Mercedes-Benz, for example, is such that they just can’t be seen to be breaching something like this. I think that needs to be the same for all the teams. I like to think, and I understand it to be the case, that somebody like Toto has to sign a document to comply with there and Christian Horner at Red Bull and all the key personnel, all the financial personnel, should be personally locked into this. I think that’s a critical area so that they’re personally responsible and accountable, as well as their company in being transparent and honest and accurate with these numbers.” – Martin Brundle concluded.
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