2021 Cost Cap Breaches

[Leithen]

I'd rather see any tax rebates, grants etc treated as income rather than anything that can produce a lower net cost.

[Leithen]

JNW1 said:

Leithen said:

I'd rather see any tax rebates, grants etc treated as income rather than anything that can produce a lower net cost.

R&D credits are against qualifying expenditure (i.e. costs) so surely it would seem logical they are allowed to reduce costs for cost cap purposes? And from what I can deduce the issue RBR are having isn't around whether or not the credits are allowed to reduce expenditure for cost cap purposes - I think the FIA have agreed that's fine - the issue is more whether the correct figure has been used in their cost cap submission.

The problem I have with it is that is potentially skews the level cost playing field between teams in different locations. It appears that they have attempted to adjust or compensate for this, but surely the simpler approach is to use the base cost to calculate the cap spend, and then any rebate only impacts the profit/loss of the operations.

[Leithen]

JNW1 said:

What The Deuces said:

For RBR it will be a matter of principle if they fight it as they would then risk heavier sanctions. The deliberate cheating doesn't stack up for me because if it was deliberate they'd accept the ruling, dodge a points deduction and get on with it rather than risk worse.

Exactly so - if you know you've been cheating deliberately you'd take the relatively light punishment and breathe a sigh of relief. Therefore, if RBR refuse to take an Acceptance Breach Agreement - and instead elect to go to an appeal - it means they're either very stupid (because they know they're guilty and will lose the appeal) or very sure they haven't actually breached.

Hubris.

[Leithen]

Merc at COA with new bits, Red Bull running with less bits following advice from their accountants.

[Leithen]

Clamping down on this might help reduce the ridiculous gardening leave clauses in contracts. Let them go quicker = less cost.

Trade off with allowing competitors to benefit, but if we want a more competitive field....

[Leithen]

JNW1 said:

However, in this case it seems RBR were only made aware of the precise allegations against them literally hours before the FIA announced they'd been found guilty.

Is the source for this RB, or has it been confirmed by FIA/others?

[Leithen]

JNW1 said:

Leithen said:

JNW1 said:

However, in this case it seems RBR were only made aware of the precise allegations against them literally hours before the FIA announced they'd been found guilty.

Is the source for this RB, or has it been confirmed by FIA/others?

RBR have said publicly they were only told about the precise details of the allegations shortly after the Japanese GP and I've not seen anything from the FIA to refute that and suggest they were told sooner.

The FIA haven't been saying much though have they? I would be taking RB's statement with a rather large pinch of salt. Hopefully the full details of the breach will be publicised along with the timelines explaining why it has taken almost a full season to get to this point.

[Leithen]

There are a lot of unanswered questions.

In all likelihood, most questions will remain that way as RB and the FIA fudge an agreement that won't please anyone, but allows the show to continue.

The more things change....

[Leithen]

Evercross said:

Leithen said:

In all likelihood, most questions will remain that way as RB and the FIA fudge an agreement that won't please anyone, but allows the show to continue.

It is amazing how so many people have assumed this position. Anything other than punishment will be presumed to be a stitch-up rather than a genuine disagreement on how the rules should be applied that then gets found in RB's favour.

As I said - mission accomplished. This is the narrative Toto and others set in motion by the leaks and exaggerations.

If all the details are published and the timeline explained, I'll be very happy to be proved wrong.

[Leithen]

Deesee said:

Imagine, if you could snare championship.. or so..

Then put it on a motor home.. twice..

Mercedes ought to copy the Lotus 95T and have championship stickers on the car. Lots of opportunity to get creative with the 2021 Laurel Wreath....

[Leithen]

My bingo card;

for the good of the sport, we have accepted

in no way fraudulent

open and transparent

did not benefit

difference in interpretation

[Leithen]

The spin will be something along the lines of we continue to believe that our interpretation is correct, however we acknowledge the damage a protracted court dispute would bring and therefore for the good of the sport we have agreed....

There will be no mea culpa.

[Leithen]

Presuming Ed said:

So when they were all spending $500m plus a year how much time were they finding each weekend? It was like Binoto saying $500,000 was worth half a second. Since when have Ferrari ever got that value for money on speed.

As soon as we all understand that everyone who opens their mouth in the paddock is on an agenda to create themselves an advantage. Truth doesn't come into it.

Law of diminishing returns. The cost cap has drastically reduced the teams ability to develop and iterate.

The details of the overspend are fundamental to understanding what has happened.

Have RB a higher cost base, a proportion of which they believed could be placed outside the cost cap?

Have the other teams accounted for similar costs within their adherence to the cost cap?

If RB submitted their costs 4M under the cap, how close to the cap were the other teams?

So many questions, of which I maintain, few will be answered.

[Leithen]

As has been said, let's see how the other teams respond. Only then will we know if the heavy scale manoeuvres behind the scenes have worked.

According to the ABA Summary, RB submitted accounts £3,743,000 below the cap. A 3% undershoot. I find that astonishing.

[Leithen]

For those who haven't seen it, the FIA link to the ABA Summary;

https://www.fia.com/sites/default/files/rbr_public...

[Leithen]

JNW1 said:

lambosagogo said:

Snappy89 said:

I expect there's been a lot of negotiating down of figures between the time it was announced and now. We'll never know the true extent of the breach IMO.

One of today’s articles said >5m but was negotiated down to 1.86m

It's not even £1.86m - the FIA in their own press release state the true net overspend is "only" £433k. Where £5m has come from is anyone's guess....

Read the ABA summary from the FIA.

[Leithen]

One of the conditions of entry into the championship for all teams ought to be the publication of their Full Year Reporting Documentation, once compliance or non compliance has been ascertained.

[Leithen]

How does a team that has been fighting for the championship to the wire, and apparently complaining about the cost of the damage incurred mid-season, then submit documentation 3% under the cap?

I just can't get my head around that.

[Leithen]

Wills2 said:

Leithen said:

As has been said, let's see how the other teams respond. Only then will we know if the heavy scale manoeuvres behind the scenes have worked.

According to the ABA Summary, RB submitted accounts £3,743,000 below the cap. A 3% undershoot. I find that astonishing.

When you know you've spent more than you should best to start out under calling it and try obfuscate yourself out of trouble during the investigation.

Looks like it's worked for them, but it's not a sport anymore.

Sadly, that appears to be the most obvious explanation.

[Leithen]

Red Bull's Financial Controllers? Not so magisterial.

ABA said:

Subsequent to the findings of the Cost Cap Administration, a Procedural Breach committed by RBR pursuant to Article 8.2(e) of the Financial Regulations due to the submission of inaccurate Full Year Reporting Documentation in respect of the Full Year Reporting Period ending on 31 December 2021 because it inaccurately excluded and/or adjusted costs amounting to a total of £5,607,000 in its 2021 Full Year Reporting Documentation;