As best we understand the facts, Red Bull Racing exceeded the cost cap set by the FIA during the 2021 Formula 1 World Championship. The latest news is that F1's governing body, the FIA, may be cutting a deal with Red Bull that would allow it to keep its trophy. The reigning team can either choose to accept this deal or decline it and go before an adjudication panel to present its case. In my opinion, this is absolutely the wrong move for the future of the sport, and I'm going to share precisely why.
In a nutshell, Red Bull spent more money than the regulations allowed in 2021, according to the FIA's findings. Unofficial reports claim it exceeded the cost cap by roughly $1.8 million or so, coming in as a "minor" offense of less than 5% over the total $ 145 million limit. That money was spent in the midst of a vicious battle with rivals Mercedes-AMG, who took the fight right down to the final race in Abu Dhabi. Red Bull went on to win the Drivers' Championship with Max Verstappen, clinching victory in controversial circumstances in the last race of the year.
The primary reasons why the cost cap was introduced were for the sport's own long-term sustainability, and to make F1 more viable for every team, big or small, in the near term. See, motorsport often becomes an arms race—with all the spending that entails—which often kills the smaller teams and scared away new competitors from entering.
F1 is an elite battleground, where teams must explore the ultimate limit of the regulations to win. It often comes down to the finer interpretations of aero rules or exploiting small gray areas to eke out an extra sliver of performance. When it comes to the cost cap, all teams need to wring out the maximum performance from every dollar spent. However, for 2021, every team would have the same amount of money to play with. That's the entire premise here.
In Red Bull's case, though, it appears the hunt for performance took it up to the cost cap and beyond. To claim victory, the team broke the rules, plain and simple. Fellow competitors haven't shied away from accusing the team of cheating, as McLaren CEO Zak Brown shared earlier this week.
If the FIA allows Red Bull's championship to stand, it will send teams a clear message: It's okay to break the rules and win a championship. If a "minor" overspend won't result in a loss of points or championship results, it changes the game. Suddenly, every other team will realize they, too, have an extra few million to spend over the course of the season and receive nothing but a slap on the wrist from the governing body.
Indeed, teams will be compelled to break the cost cap to whatever limit they can get away with, in the knowledge that their rivals must surely be doing the same thing. In F1, being noble wins you no prizes. A loophole exploited by one team must be exploited by anyone else that wants to compete. If you can essentially get away with spending an extra 5%, that's simply too much of an advantage to give away to one's rivals by playing nice.
It bears noting that there are some penalties likely on the cards for Red Bull, however. The FIA's reported offer of an "accepted breach agreement" would require Red Bull to admit wrongdoing and accept specific minor penalties. These could be a monetary fine, or restrictions on testing time. However, it would not restrict Red Bull's cost cap in the future, nor consist of any points deducted from the 2021 or 2022 championship results. And while the penalties of this plea offer wouldn't exactly go unnoticed, team management can certainly prepare for them, much like how big pharma often budgets for financial penalties upon rolling out questionable drugs to the public. These punishments have been carefully considered by management from day one, and are ultimately seen as the "cost of doing business."
The fact is that these penalties would only impact Red Bull's performance in the future. It would indicate that teams can cheat now and pay later. Naturally, there's huge value in winning a championship, both in terms of prize money and the marketing value to sponsors. My opinion is that most teams would rather win one year and come fifth the next, versus finishing second two years in a row.
Thus, the only way that the cost cap can work is if the FIA reaches to the top shelf and issues the maximum punishment. If teams are only given fines and testing restrictions for breaching the cap, chaos will reign. Some teams will be willing to compromise their future seasons for championship glory in the shorter term. Other teams will be forced to match them in overspending if they wish to compete. At that point, the cost cap will effectively become meaningless.
Indeed, F1 managing director Ross Brawn said as much back in 2019, stating "If you fraudulently violate the financial rules, you lose the championship." That quip doesn't hold any weight in the regulations, but it raises the point that the FIA could have handled this better. Clear consequences for breaching the cap should have been laid down at the outset. As The Drive's Managing Editor Jerry Perez previously said, the FIA's lack of urgency and transparency is damaging F1's already-thin credibility.
Historically, the FIA has avoided overturning results once the trophy has been lofted on the podium. If it offers Red Bull an easy way out that will preserve Verstappen's championship, it would only be continuing the theme. In doing so, however, it threatens to destroy the same regulations created to protect the sport. Let's not forget, the cost cap's long-term goal is to lure new automakers by making them believe their investments will earn them a spot on a leveled and fair grid. If the FIA can no longer guarantee that, then I'd say the very future of Formula 1 is at risk.
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