Why F1 faces a risk of ‘game over’ on D-Day

Formula 1 prepares for what could be a critical test of its long-term future on Wednesday, as one wrong step could signal a “game over” for the cost cap.

After months of analysis and a number of delays, the FIA ​​must finally announce the results of its audit of F1 team finances for the 2021 world championship.

This moment will determine whether or not they each met the budget cap of approximately $145 million that was in place.

Authorized persons will obtain their certificates of compliance. Anything that didn’t risk a cost and penalty cap hearing.

But rather than it being just a moment of standard procedure, whispers from the paddock in Singapore that two teams may have broken the rules have left the sport on edge for what could be a hugely significant announcement.

With cost caps having been a central part of F1’s plans to deliver a tighter grid over the long term by leveling out spending across all competitors, the FIA ​​faces an extremely difficult balancing act in dealing with the potential problems.

Take down teams that have overstepped the limits of incredibly new rules hard, and it risks causing huge controversy over a 2021 campaign that still remains a sore topic for many.

But sweep all potential infractions under the rug by letting them go, or give too small a penalty to any rule breakers, and it risks opening the floodgates by making other teams feel that overspending is not something they really need to worry.

It’s no surprise that Ferrari was so open in Singapore last weekend about the significance of this moment for F1’s cost cap era.

Race director Laurent Mekies said: “It’s a very important test for cost capping. And if we don’t pass that test, it’s probably game over, because the implications are huge.”

Charles Leclerc, Ferrari F1-75, George Russell, Mercedes W13

Photo by: Mark Sutton / Motorsport Images

What has left top teams like Mercedes and Ferrari so worried about others’ potential overspending is that they know how much performance is left on the table by strictly adhering to the cost cap limit.

Their fear is that if other teams have found ways around spending limits but are sticking to the letter of the law, or are happy to overspend and take penalties on the chin, then they will be forced to change tact. .

Red Bull Submission

Despite all the spotlight in Singapore on Red Bull and suspicions that its upgrade spending was out of step with others, team boss Christian Horner made it clear that its 2021 bid was below the limit.

In fact, insiders suggested his audited accounts were several million dollars below the $145 million limit and were unaffected by the spending clarifications the FIA ​​has released in recent months as it unfolds. as each team audits.

“It’s significantly below,” said team boss Christian Horner. “With the details, we should be even lower…”

The final judgment rests of course with the FIA, just as the tax authorities may not always agree with an individual’s self-assessment.

Only the FIA ​​can decide the fair value of the expenditure made by Red Bull and the amount of work that offshoots like Red Bull Technology should be allocated to the F1 budget.

In addition, the FIA ​​must make a call on the outings that are designated for the 2021 campaign and those around 2022.

And that’s why there’s such interest in what Wednesday’s result will be from teams who feel that not all teams are operating under the same restrictions.

As Mekies said: “I think the concern comes from the fact that if you think about the level of constraints that have (been) imposed on the big teams, then you realize how long the lap will be if you don’t not strictly apply.

“We were massively constrained and so any million, any leak that you allow in the budget cap, is going to turn into tenths of a second on the car.

Max Verstappen, Red Bull Racing RB18

Photo by: Erik Junius

But the situation isn’t just important for big teams, because if the cost cap situation evolves into a Wild West scenario – where all teams decide they can now be fast and loose with it – then that undermines everything. the leveling goal. up to the grid.

The risk then is that the bigger teams simply accelerate their spending – and take future penalties on the chin – knowing full well that the end result is a much faster car.

That’s why the FIA’s handling of cost caps and its transparency in judging each team’s business is of interest to smaller teams as well as larger ones.

Memories of the secret deal the FIA ​​struck with Ferrari over its 2019 engine remain a sore point for many in the paddock.

The FIA ​​will not have the easy task of finding an answer that makes all parties happy if the teams are found to have exceeded the limit. And if that gives the green light to all 10 teams, it will also serve to trigger concern in the paddock if there is no explanation.

As Haas boss Gunther Steiner said, “If there’s a breach, I would say we need to make sure we’re informed: if there were any flaws, what we think they are , that everyone understands them. And obviously, flaws mean different opinions of settlement. So to clarify what it is.

Stick to the plan

Whatever the outcome of Wednesday’s announcement, the message from teams up and down the grid is clear: F1 shouldn’t drop the cost cap just because it ran into trouble at its first hurdle. .

Alfa Romeo boss Fred Vasseur said: “We knew from the start, when we voted for the cost cap, that it would be difficult, first to put in place for the big teams and then to put it in place. control.

“But now we’ve made the decision, we have to go. There’s no turning back and we can’t stop it.”

Despite the pain this caused top teams, who had to fire to stay below the limits, they also agree that cost capping was the right thing to do. The key is just to make sure it works fairly for everyone.

Mercedes boss Toto Wolff said: “We have decided to go the cost cap route and we want to give the small teams the opportunity to compete with the big ones.

“So we were forced to restructure our business and take out tens and tens of millions of dollars in order to meet the cost cap, to make the small teams competitive.

“I think the point of the exercise was for us all to be under the same umbrella and for it not to become an accounting championship that we’re trying to put holes in. It’s against what we all signed up for. “

Toto Wolff, Team Principal and CEO, Mercedes AMG

Photo by: Simon Galloway / Motorsport Images

Even for Red Bull, which has been angered by finger-pointing rivals, how the process unfolds from here is something it is intrigued to find out, as it also fully supports the cost cap despite the sacrifices it makes. he had to do.

Horner said: “I think it’s a positive thing happening in Formula 1, and it has had a direct impact on costs.

“I have heard that up to 40 people were made redundant at one of our rival teams. At Red Bull we have made over 90 people redundant, and the cost control that has continued has been absolutely strict in whole organization.”

He added: “I think it’s something the FIA ​​can control, but inevitably there will be learnings and we see clarifications coming out, even after the time the submission has been made, which could have a material impact on the actual submissions that were made in March.

“So, of course, there will always be a learning curve process, both for regulators and for participants.”

That’s why F1 is so eager to find out what’s coming out of the FIA’s Paris headquarters on Wednesday.

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