But what is crystal clear is that while the labeling of Red Bull’s overspending has officially been classified as a “minor” breach, its opposition sees it as anything but a minor issue.
To be classified as a “minor” offense rather than a “material” one, teams must have overspent by less than 5% of the allowance. So with last year’s cost cap being roughly $145 million, that could still be up to $7.25 million.
There has been no confirmation from the FIA or Red Bull about the extent of the breach, but there have been many suggestions that it is somewhere between $1 million and $2 million.
That may seem like a pretty small amount of money in the grand scheme of things but when it comes to development budgets, extra spending like this ends up making a big difference.
Lewis Hamilton made reference to only $500,000 more development money to be unlocked Mercedes last year as enough to allow it to bring a new floor design that would have raised the pace of his car to possibly change the outcome of the title chase.
As his team principal Toto Wolff said at the Singapore GP: “If it’s a so-called minor break, I think the word is probably not right.
“If you spend 5 million more, and you are still in the smallest break, it still has a big impact on the championship.
“To give you an idea, we obviously monitor closely which parts are brought to the track by the top teams every race – 2021 season and 2022 season.
“We can see that there are two main teams that are almost the same and there is another team that spends more. So we know exactly that we spend three and a half million a year in parts that we bring to the car. And then you can to see what a difference spending another 500,000 makes – it would make a difference.
“We haven’t produced lightweight parts for the car to get us out of double-digit overweight because we just don’t have the money. So we have to do it for next year’s car.
“We can’t homologate a lightweight chassis and bring it in because it’s only $2 million that we’ll be over the limit. So you can see that every expense more has a performance advantage.”
It’s this trade-off between spending and performance that top teams have had to juggle under the cost-containment era, and that’s why a rival’s overspending is such a big deal for them.
Ferrari especially demanded several times for maximum sanctions given. The team believes that it is the only way to ensure that squads robustly follow the cost limit in the future and are not encouraged to game the system by exchanging overspending to secure richer rewards than any penalty will cost them.
Ferrari has not said anything publicly since the FIA’s statement about Red Bull’s breach, but it is understood that the team’s stance remains unchanged, and that it wants financial infringements to be treated as strictly as technical infringements where cars are disqualified if parts a few millimeters outside.
For Red Bull’s main rivals, perhaps even more important than any potential sanction handed down is that there is complete transparency about how the case is being handled.
Until now, the FIA has offered little insight into the scale and motives of Red Bull’s breach, and that lack of information for such a big subject has inevitably sparked wild speculation.
Was Red Bull’s procedural and minor overspend the result of a small paperwork delay and innocent expenditure – such as a subsidized canteen at Milton Keynes, sick pay and gardening leave allowances – being unexpectedly added to the team budget via FIA interpretations and pushing it over the limit?
Or has there been some deliberate attempt to fudge paperwork, block investigations and deliberately find ways around the cost cap to ensure Red Bull can spend more on car development than its rivals?
Red Bull’s “surprise and disappointment” at being accused of breaching the cost cap would suggest it was more of a former case. However, without firm answers, the suspicions of rivals will inevitably fear that it could be the second.
That is why it is essential, both for Red Bull and for the rest of the grid, that the FIA explains things in detail, and does not go down the road of secret backroom deals.
Sergio Perez, Red Bull Racing RB18, second position, Charles Leclerc, Ferrari, third position, in Parc Ferme
Photo by: Steven Tee / Motorsport Pictures
F1’s financial regulations are actually clear in how they require the FIA to publish details of the decisions made in relation to rule breaches.
If teams choose to go for an Accepted Violation Agreement, where it owns and takes responsibility for violating the rules, then the matter will be released.
Article 6.32 of F1’s financial regulations states: “The Cost Limit Administration will publish a summary of the terms of the ABA, detailing the breach, any sanctions, and any improved monitoring procedures, omitting any Confidential Information.”
Even if the team chooses to take the matter and go before judges so that it can plead its case, then the final judgment will be public as well.
Article 7.27 of the rules states: “The Cost-Lipo-Adjudication Panel will publish the decision of the adjudication panel and the reasons on which they are based, except for any Confidential Information.”
But while these offer some hope of answers for Red Bull’s rivals about the scale and scope of what happened, and the FIA’s responses, they still open the door for the board to try to downplay things.
For now, Red Bull’s rivals are watching and waiting for the next steps.
As Ferrari team principal Mattia Binotto said at the weekend: “I think what we need and what I expect is full transparency and clarity about the discussions that may have taken place.”
And if that doesn’t happen, then the FIA risks even greater controversy in the future.
Make any sanction too weak, or leave other teams unclear on the details of the cost limit breach by keeping things too secret, and trust in the entire system will break down very quickly.
This would then threaten the very existence of the cost limit, which was regarded as a core element of F1’s long-term health.