A lot of the discussion about F1 in recent weeks has surrounded a rather unusual topic - the cost cap put in place by F1 for the 2021 season, and the swirling rumours of teams breaching the rules, namely Red Bull.
The F1 cost cap review for the 2021 season was completed by the FIA on Monday, and the findings found two teams to have been in breach of the regulations.
The controversy is not going away any time soon, but we've got the lowdown on the F1 cost cap situation thus far for you.
F1 Cost Cap Explained
The race restart at the 2021 Saudi Arabian Grand Prix. The race was won by Lewis Hamilton from Max Verstappen (Photo: Shutterstock)
What is the F1 cost cap?
In order to keep the budgets of F1 teams in check, and to stop the massive teams like Ferrari, Mercedes, and Red Bull speeding away from the chasing pack, a cost cap was introduced ahead of the 2021 season.
Initially set at $175 million for the season, this was later reduced to $145 million in order to help cut costs after the COVID-19 pandemic.
Speaking when the cost cap was brought in, Ross Brawn said:
The initial objectives were a more competitive field and I think with the situation we have now, economic sustainability is the priority, and I think that counts as much for the big teams as it does for the small teams
We’re reducing the amount of money that can be spent in Formula 1 and improving the distribution of the prize fund more evenly amongst the teams. A good midfield team should be able to score podiums, maybe a win, and it should make a small profit.
And if we can achieve that then we’ve got a very sustainable future.
The cost cap for the 2022 season was initially set at $141.2 million, but was increased to just over $145 million as a response to global inflation rates.
Over the past few weeks, the FIA have been carrying out an audit of the financial reports from all the ten teams who entered the 2021 F1 season - and their cost cap investigation found that one team overspent the budget limit.
Have Red Bull broken the rules?
Red Bull, who won their first world drivers' championship in eight years with Max Verstappen in 2021, were found to be in "Procedural and Minor Overspend Breach" of the F1 cost cap for the 2021 season.
Aston Martin, who field four-time world champion Sebastian Vettel as one of their drivers, were found to be in "Procedural Breach", but did not overspend the budget limit.
A "Minor Overspend" of the cost cap is anything within 105% of the original budget limit - this means that Red Bull spent anything between $145.1 million, or $152.25 million on the 2021 season.
What will be Red Bull's punishment?
In their official statement on the F1 cost cap findings on Monday, the FIA said:
The Cost Cap Administration has several options when dealing with an alleged breach of the Financial Regulations. It can enter, when deemed appropriate, into a settlement referred to as an Accepted Breach Agreement (ABA) with the Competitor concerned in case of Procedural Breach or Minor Overspend Breach, or, if no agreement can be reached or the Cost Cap Administration considers it more appropriate, it can refer the case to the Cost Cap Adjudication Panel. In the event of an alleged Major Overspend Breach the Cost Cap Administration must refer the case to the Cost Cap Adjudication Panel.
Procedural Breaches can result in Financial Penalties and/or Minor Sporting Penalties (in case of aggravating factors) as detailed in the Financial Regulation. Minor Overspend breach (<5% Cost Cap) can result in Financial Penalties and/or Minor Sporting Penalties. Only a Material Overspend breach (>5% Cost Cap) if confirmed before the Cost Cap Adjudication Panel will result in a mandatory Constructors’ Championship points deductions and can result in additional Financial Penalties and/or Material Sporting Penalties.
It is a little hard to decipher and focus in on exactly what to make of the above so here it is simplified.
- Red Bull have avoided overspending by more than 5%, which would have seen them suffer a mandatory points deduction in the constructors' championship
- The F1 "Cost Cap Administration" will now decide how best to punish both Red Bull and Aston Martin
- Neither team has, as of yet, entered into an "ABA" - Williams pre-warned the FIA that they would be in procedural breach earlier this season, and so will not face punishment.
Any punishments applied should only affect the 2021 championship. Possible punishments for the "Minor Overspend" include:
- Public reprimand
- Deduction of Constructors' Championship points awarded for the Championship that took place within the Reporting Period of the breach
- Deduction of Drivers' Championship points awarded for the Championship that took place within the Reporting Period of the breach
- Suspension from one or more stages of a Competition or Competitions
- Limitations on ability to conduct aerodynamic or other Testing
- Reduction of the Cost Cap
We await word on what punishment, if any, will befall Red Bull and Aston Martin.
Will Max Verstappen keep his world championship?
It is very unlikely Max Verstappen's 2021 drivers' title will be affected. There is precedent for team breaches of regulations in the past, and the drivers' championship has remained unaffected, such as when McLaren were found guilty of spying on Ferrari during the 2007 season. The team was disqualified from the constructors' championship but drivers Lewis Hamilton and Fernando Alonso were allowed to continue in the drivers' championship.
Max Verstappen after winning the F1 world championship at the 2021 Abu Dhabi Grand Prix (Photo: Shutterstock)
Why is #F1xed trending on Twitter?
The ending to the 2021 F1 season was already contentious enough before the cost cap controversy. Max Verstappen, though a thoroughly deserved world champion, won the title on the final lap of the final race in highly contentious circumstances.
A late change in safety car procedure by then-race director Michael Masi heavily benefitted Verstappen in second place in his efforts to overtake Lewis Hamilton. When the race restarted, there was only one lap remaining and Verstappen, on far quicker and fresher tyres, was allowed an opportunity to overtake Hamilton - which he took.
The fallout from Abu Dhabi 2021 continues, and relationships between Mercedes and Red Bull are still bitter - though Hamilton and Verstappen have never shared a public fallout. The online atmosphere between fans of the drivers has been toxic ever since, and the addition of a cost cap breach by Verstappen's Red Bull team has seen the somewhat crude "F1xed" hashtag take off on Twitter.
It is a real shame that Max Verstappen's first F1 title has been overshadowed by cost cap controversy and bureaucracy. Verstappen himself is not to blame for the issues at the centre of Red Bull's spending, or what happened on the final lap in Abu Dhabi, but any wrongdoing from Red Bull could, of course, have given them a crucial edge in what was a tight title battle for the ages between Verstappen and Hamilton. This has added to the conspiracy thinking surrounding the 2021 F1 season.
Any punishment handed down to the team must match the implications of what overspending may have gained Red Bull.
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