What punishment could Red Bull face for budget cap overspend?

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• What penalties are available to the FIA?
• What’s the most likely outcome?

Max Verstappen (NLD) Red Bull Racing RB16B. 12.11.2021. Formula 1 World Championship, Rd 19, Brazilian Grand Prix, Sao Paulo, Brazil, Qualifying Day. – www.xpbimages.com, EMail: [email protected] © Copyright: XPB Images

The FIA on Monday finally confirmed which teams it had issued certificates of compliance to with regards the budget cap – with just seven teams receiving those certificates; Ferrari, Mercedes, McLaren, Alpine, AlphaTauri, Alfa Romeo and Haas.

Williams complied with the budget cap, but were find to have had a procedural breach earlier in the season, which it remedied after entering into an Accepted Breach Agreement (ABA) with the Cost Cap Administration.

Aston Martin were also found to be in procedural breach following the submission of their accounts.

But the biggest news – and somewhat expected after rumours of an overspend were reported on during the Singapore Grand Prix weekend – Red Bull were not only found to be in procedural breach, but also a minor overspend breach.

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This is a more serious breach as it suggests Red Bull has actually broken the $145 million budget cap by up to 5% ($7.5m). Anything above that amount is considered a “major” breach and would warrant a significant penalty.

Although team bosses including Ferrari’s Mattia Binotto have called for such a penalty for even a minor overspend, it seems unlikely the FIA will come down too hard on Red Bull.

What penalties are available to the FIA?

It has a range of penalties available as lined out in the FIA Formula 1 Financial Regulations. These range from a “financial penalty”, a “minor sporting penalty” and the most severe, a “material sporting penalty”.

The first, a financial penalty, would simply see a fine imposed on Red Bull which it would be obligated to pay within 30 days. If payment is delayed, the team in question will be banned from taking part in any future events until the fine has been paid.

A minor penalty can include a simple reprimand – a sort of public slap on the wrist – a deduction of Constructors’ or Drivers’ Championship points from the season in question, which would of course be the 2021 championship which saw Max Verstappen clinch his first title in questionable circumstances at the season-ending Abu Dhabi Grand Prix.

Other minor penalties include suspension from an event to a reduction in their personal cost cap and even restrictions placed upon aerodynamic or other testing, such as wind tunnel time or even reduced pre-season track time.

The final category of penalties are similar to those listed under ‘minor’, but would be more severe in that they would deduct a greater number of championship points, or further reduce testing, etc.

Added to that, the FIA can disqualify the team from the championship and strip its entire points haul – a similar punishment handed down to McLaren in 2007 when it lost all of its Constructors’ points for allegedly receiving stolen data from Ferrari.

These material sorting penalties are however only reserved for ‘major’ breaches of the budget cap and therefore wouldn’t come into play here.

What’s the most likely outcome?

The FIA will want to be seen to be taking action, otherwise it would make a complete mockery of the budget cap and the whole idea of capping spend to increase competition. If one team can simply spend an additional $7m on upgrades – which could bring about a significant advantage – and receive a slap on the wrist, where is the deterrence to simply do the same again?

Some have suggested the FIA will make an example of Red Bull and come down on them hard, by imposing a large fine and a Constructors’ Championship points deduction – though given they held a healthy 323-point gap to third placed Ferrari last year, it would have to be significant to make a difference – as well as imposing restrictions on aerodynamic testing for 2023.

Others are calling for complete disqualification and/or a Constructors’ and Drivers’ points deduction which would potentially strip Verstappen of his title and hand an eighth championship to Lewis Hamilton, who finished just eight points behind the Dutchman. However this can’t happen given that it is considered a minor and not a major breach.

Also, the FIA would not want to impose a penalty that changes the result of a championship. Yes, there are precedents in other sports for doing this when a competitor has found to be cheating, but it’s not a decision that is made lightly.

A much more realistic course of action is that the FIA will simply issue a reprimand, reach a settlement and potentially reduce their 2023 budget cap by <5%. A more harsher sanction might also be imposed, but suspended for 12-24 months, only taking effect if the breach is repeated in subsequent seasons.

Teams also have a right to appeal the decision, which would force the International Court of Appeals to step in and rule on the matter.

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