‘Speculation’ over budget cap violation say Red Bull, but Ferrari and Mercedes call it ‘open secret’

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Ferrari and Mercedes both say it’s an “open secret” that two teams exceeded Formula 1’s budget cap last year.

Red Bull team boss Christian Horner has described claims that they’ve surpassed the $145m (£114m) mark as “speculation”.

Aston Martin is “in talks with the FIA ​​and awaiting approval.”

Ferrari racing director Laurent Mekies said: “It’s no secret now that two teams have breached the 2021 budget cap regulations, one to a significant degree, the other to a lesser extent.”

Mercedes Team Principal Toto Wolff added: “There is one team in a minor breach that is more procedural and another team that is fundamentally massively overwhelmed and is still being investigated. It’s an open secret in the paddock.”

Mekies said the matter was “very serious” and Ferrari expected the FIA ​​to “handle the situation in an exemplary manner”.

The FIA ​​told teams this week that it will issue certificates of compliance with 2021 financial regulations on October 5 – or not.

Red Bull team boss Christian Horner told ` Sport it was “pure speculation” that his team had exceeded the limit. He added to Sky that he was “not aware” of any violations.

Wolff added to ` Sport: “The cost cap is probably the most important advancement in regulations to ensure a level playing field, to allow teams that don’t have the full budget to catch up and cap spending at the top teams.

“It is of enormous importance for a demonstration that these regulations are monitored and I have no reason to assume otherwise.

“The FIA, especially Mohammed [Ben Sulayem, the president], has shown a fairly robust stance towards enforcing all types of regulations. So if we’re talking about something big now, he’s going to show the same integrity and leadership that he did before.”

Mekies said Ferrari expects “complete transparency and maximum penalties” from the FIA ​​to “ensure we all drive by the same rules because their impact on car performance is huge”.

A number of teams asked ` Sport why the process to ensure compliance with the budget cap had taken so long.

Should the allegations prove true, there is a risk that the problems F1 have had with the credibility of the 2021 season will be compounded and extended to this year.

The claims relate to 2021, when Red Bull’s Max Verstappen took his first title from Mercedes’ Lewis Hamilton after a controversial end of the season in which FIA race director Michael Masi failed to implement the rules correctly during a late safety car period fetched.

The budget teams spend during a season also includes their development for the following year’s car, so any injury would have had an impact on a team’s performance in 2022.

The budget cap was introduced as part of a broader set of rule changes aimed at closing the field and making racing in F1 more competitive.

This year, Red Bull has dominated the season, aided by a series of mistakes and failures from Ferrari, and Verstappen is poised to win his second multi-race world title.

McLaren team boss Andreas Seidl said: “I don’t want to go into specifics because I don’t have information, but it is clear that in terms of financial regulations, much like technical and sporting regulations, good governance and policing is in place , because the integrity of the sport is the most important thing.

“We have great confidence in the new President of the FIA ​​and his team given the rigor with which they have scrutinized the budget cap on our side.

“We trust that they will make the right judgement.

“It’s also important to have appropriate penalties for the cap to work as intended.”

An FIA spokesman said: “The FIA ​​is currently finalizing the assessment of the 2021 financial data submitted by all F1 teams. Any suspected violations of the Financial Regulations will be addressed in accordance with the formal process set out in the Regulations.”

What are the possible penalties?

The cost cap regulation defines an overspending of less than 5% as “minor” and more than “substantial”.

Penalties for a minor violation may include a point deduction for the championship in which the violation occurred, a ban from a limited number of events, restrictions on research and development, and a reduction in the offending team’s cost cap.

A major violation has the potential to ban a team or driver for an entire championship.

Teams consider it an open secret that there has been both a major and minor breach. At least one team received this information directly from the FIA.

And there are concerns the FIA ​​will seek to minimize the offense to limit the damage to the Championship.

Red Bull and the FIA ​​​​have been known to have been in talks for some time about complying with the budget cap.

A senior figure said that breaking the cost cap was akin to doping because the financial increase involved was directly related to performance.

However, within Formula 1, the results of last year’s championship are not expected to be changed. However, there are serious concerns among teams that the championship could be skewed by budget cap violations.

Even a minor infraction can give a team a significant advantage.

A 5% overspend in 2021 would equate to $7.25 million in overspend.

This is in the upper range of a leading team’s annual spending on in-season development, so even a minor injury could effectively equate to a full season’s development.

Another way of looking at the number is that an additional $10 million would allow a team to hire an additional 100 people based on the average salary of a typical top team.

The budget ceiling was reduced to US$140m (£125.4m) in 2022, decreasing to US$135m (£120.8m) in 2023. The exchange rate is fixed at $1.2961 per pound – so the cap is unaffected by the recent cut in sterling’s value.