F1 2022: Red Bull’s likely penalty for breaching FIA cost cap regulations revealed

Red Bull has multiple avenues of appeal against the FIA ruling that they breached the F1 budget cap as the likely penalty for the breach is revealed.

SUZUKA, JAPAN - OCTOBER 07: Max Verstappen of the Netherlands and Oracle Red Bull Racing looks on in the garage during practice ahead of the F1 Grand Prix of Japan at Suzuka International Racing Course on October 07, 2022 in Suzuka, Japan. (Photo by Mark Thompson/Getty Images)

Red Bull were found to have breached the Formula One budget cap yesterday but expressed their surprise at the verdict and maintained that their submission was below the limit.

The FIA, the sport’s governing body, confirmed that Red Bull were the only one of the ten teams to have exceeded the 231 million dollar (145 million USD) cap that was imposed last year, by what it terms a “minor” amount. Max Verstappen, the Red Bull driver, will keep his world championship title.

The 2021 season was one of the closest in F1 history, fought between Verstappen and Lewis Hamilton, of Mercedes. Hamilton lost out on the final lap of the final race in Abu Dhabi and said last week that if Mercedes had overspent by only 478 thousand dollars (300,000USD) then he would have won the championship.

Christian Horner, the Red Bull team principal, had spent the previous week defending his team and saying he was “confident” that their submission was within the limit.

Red Bull continue to insist they were under the spending limit despite being found guilty of a cap breach. Picture: Getty Images

In a statement yesterday the team insisted they were under the limit and said that they would “carefully review” the report. “We note the findings of ‘minor overspend breaches of the financial regulations’ with surprise and disappointment,” the statement read.

“Despite the conjecture and positioning of others, there is of course a procedure under the regulations with the FIA which we will respectfully follow while we consider all the options available to us.”

A “minor” breach is an overspend of less than 5 per cent of the budget. At the upper end that would equate to 7.5 million USD, though it is understood that the overspend was closer to 1 million USD. The FIA has not revealed the extent to which Red Bull exceeded the limit.

The nine other teams were all found to be in compliance for spending, though Aston Martin were also found to be in procedural breach. This is thought to relate to filling in a form incorrectly.

The FIA said it was “determining the appropriate course of action to be taken” against Red Bull and Aston Martin. It has a raft of measures available to it, ranging from a fine to reducing a team’s cost cap.

Red Bull and Aston Martin can appeal against the findings. If Red Bull accept the verdict, they can enter a “settlement” with the FIA, in which they accept guilt and an appropriate penalty is imposed.

If they do not accept the findings - which appears to be the case - the matter will be referred to an independent panel of accountants, which will determine the penalty. If Red Bull still do not agree with the penalty, they can go to the International Court of Arbitration.

Williams were found in procedural breach this year and the team entered into an Accepted Breach Agreement (ABA) with the FIA for being late with their submission in March, paying a $40 thousand (25,000USD) fine. It is understood that a fine is being considered for Red Bull.

Meanwhile, the women’s W Series has confirmed it lacks sufficient funds to finish its season and has cancelled the final three races. That means the British driver Jamie Chadwick, 24, is crowned champion for a third consecutive year.

RED BULL FOUND GUILTY OF BREACHING F1 COST CAP

Two-time world champion Max Verstappen’s Red Bull Formula One team exceeded the budget cap for the 2021 season, the International Automobile Federation (FIA) said, adding that the offence was a “minor violation”.

Aston Martin was also found in breach of Formula 1 financial rules, the FIA announced, adding that any punishment would be decided at a later date.

“We note the findings by the FIA of ‘minor overspend breaches’ ... with surprise and disappointment,” tweeted Red Bull.

The cap came into effect last season and was set at $230 million dollars (AUD). It is intended to limit spending to make the sport viable and also to close the competitive gap between big and small teams. Mercedes, Ferrari and Red Bull were particularly affected.

Even so, Verstappen ended the season by edging Lewis Hamilton of Mercedes to win a first world title.

Max Verstappen’s Red Bull Formula One team exceeded the budget cap for the 2021 season. Picture: Getty Images

The FIA said it was “currently determining the appropriate course of action to be taken”.

A “minor overspend breach”, the statement said, is less than five per cent of a team’s total cap and can “result in financial penalties and/or minor sporting penalties.”

Red Bull insisted on Twitter that they had not broken the rules.

“We need to carefully review the FIA’s findings as our belief remains that the relevant costs are under the 2021 cost cap amount.”

The FIA said its ‘Cost Cap Administration’ had finished a review of the financial documentation submitted by each team for 2021 and “issued certificates of compliance to seven of the 10”.

The third exception was Williams, where there had been a problem with “a previous procedural breach” which the team had “remediated” in a “timely, cooperative and transparent manner”.

Red Bull Racing's Max Verstappen drives in the pit lane during the Japanese Grand Prix. Picture: AFP

The statement stressed that because the season under review was the first with a cost cap, the FIA had limited itself “to reviewing the submissions made by the competitors and that no full formal investigations were launched.” The statement said that the first option for the Cost Cap Administration was to agree a settlement with the team involved.

If the two sides are unable to reach an agreement, or if the team is not in favour of seeking an agreement, it can refer the dispute to a panel of six to 12 judges elected by the FIA general assembly.

“Despite all the conjecture and positioning of others, there is of course a process under the regulations with the FIA which we will respectfully follow while we consider all the options available to us,” said Red Bull.

The statement added that “the regulations are highly complex, reflecting the complexity of the sport as a whole”.

It also said that all the teams “acted at all times in a spirit of good faith and co-operation throughout the process”.

Originally published as F1 2022: Red Bull’s likely penalty for breaching FIA cost cap regulations revealed