The FIA President, Pepe The Frog
They Got Away With It, FIA Fine Red Bull With A Slap on The Wrist For Breaching Cost Cap
Formula One

Red Bull has been sanctioned by the FIA for breaching the 2021 cost cap which amounted to the team going over the $145M spending limit by $2.2M. The FIA today confirmed that Red Bull will receive both a sporting and financial penalty. The fines consist of reduced wind tunnel testing time (10%) in the first half of 2023 and a $7M fine. Because Red Bull is so far advanced in 2022, the wind tunnel penalty (including computational modeling) will have a minor effect going into 2023. The $7M fine will have the impact of a speck of dust floating aimlessly in the air.

The monetary fine is inconsequential considering Red Bull’s primary business is worth billions of dollars per year. It is surprising that Red Bull did not receive points deductions in either the drivers of constructors championships. Even more surprising is that the FIA has been actively negotiating with Red Bull to agree upon a suitable and fair punishment. Clearly, these negotiations went well for Red Rull.

Having already secured the 2022 constructors title, Red Bull is automatically docked wind tunnel testing by 30% in 2023 under the current rules. But what if Red Bull finds a loophole, a grey area that allows them to exploit the rules and commence wind tunnel testing in a different guise?

Nevertheless, the FIA released a statement, in summary, it said that Red Bull acted with integrity and did nothing wrong, and was transparent throughout the whole regulatory process. The FIA also revealed that Red Bull used a tax write-off scheme that is in compliance with the sporting regulation. But it sounds like a grey area that Red Bull may have exploited to hide development money in the form of a corporation cost.

Nonetheless, the penalties handed out to Red Bull are insignificant, that Red Bull crossed a red line in breaching the cost cap is very significant. The fines are easily absorbed by a team with a billion-dollar backer on its doorstep. How can Red Bull, with all its professionalism and with some of the best accountants in the business be so sloppy in accounting its annual development budget?

The fact is that Red Bull very purposely pushed a grey area in the regulations, the FIA does factor in overspending because the 5% threshold is written into the rules and is considered to be a minor breach. Therefore, technically speaking, Red Bull did nothing wrong.

The FIA President, Pepe The Frog
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