Red Bull did not exceed budget cap in 2021, Horner insists

2022 Singapore Grand Prix

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Red Bull team principal Christian Horner says his team did not exceed the limits on spending set by the FIA during the 2021 season when Max Verstappen won the world championship.

Multiple reports claim the FIA is poised to confirm Red Bull and another team exceeded the $145 million spending limit which was imposed for the first time during 2021.

However Horner said Red Bull are “certainly not aware of any” breaches of the cap.

He said the FIA will reveal its assessment of the teams’ finances next week.

“The accounts were submitted way back in March,” Horner told Sky. “So it’s been a long process with the FIA, going through and we’re in that process as we speak, so they’re rightly following that process. I think mid-next week is when they declare their certificates.

“I think that certainly our submission was below the cap and it’s down to the FIA, obviously, to follow their process, which they’re currently doing.”

“Every team, theoretically, is subjected to it so they will have looked at every team’s submitted account,” Horner added. “So they’re following a process and that conclusion date has been moved from July to September now to October but it’s a big job. It’s a lot for them to get through.”

The FIA’s Financial Regulations specify different penalties which can be handed down in the event of a minor or major breach of the spending limit. A minor breach is defined as being less than 5% over the cap.

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“I think there’s always going to be rumours,” said Horner. “I’ve heard of major breaches or whatever, I’m certainly not aware of that.”

Last season was the first time teams were required to keep their spending below a set level. The FIA and the teams have had many discussions to clarify areas of the rules.

“Inevitably it’s a brand new set of regulations and a set of very complicated regulations,” said Horner. “So how rules are interpreted and applied, inevitably you’re going to be subjected between the teams. I’m sure as the years go by things will get tidied up but we’re confident in our submission and as I said the FIA are in a process.”

“You have to remember this is the first time this has ever happened,” he added. “But we do our due diligence, we get audited anyway, it’s a similar process, to that of working with an auditor. It’s slightly bespoke to Formula 1.

“Clarifications have been coming even after the submissions were made so you can see how immature the process is. But the FIA obviously been working hard on it and doing the best they can.”

Horner insisted the team is “very confident in our submission” over its 2021 spending. “Anything different to that then we’ll wait to hear from the FIA.”

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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26 comments on “Red Bull did not exceed budget cap in 2021, Horner insists”

  1. There’s inevitably going to be issues – the teams will try and find any way they can to shift cost into areas that don’t fall under the budget cap. We’ve seen it in any sport that uses a cap…. There is no doubt that FIA’s interpretation of the rules will differ from the interpretations of the teams at times so I don’t expect any of this to be resolved for months whilst they argue it out.

    Overall, the regulations are new and I don’t expect any punishments to be particularly strict unless it’s discovered that a team has blatantly cheated by withholding information or something like that. It’ll likely be a slap on the wrist with a warning that future breaches won’t be tolerated.

    1. There’s inevitably going to be issues

      There is such a long list of potential issues:
      Who pays for the fysio (helmet carrier)?
      What if drivers take staff on their private(ly paid) plane?
      How to account for items sourced from related companies?
      How to differentiate between using your own wind tunnel or renting/leasing one (same for other fixed assets)?
      Is painting the car a marketing or a racing expense?
      etc. etc.

      But still a good step in the right direction.

    2. In the case of Red Bull, it seems that the issues arise over a disagreement between them and the FIA over spending by some of their subsidiary companies.

      It’s worth noting that there is a split between the racing team and the design team – the latter being Red Bull Technologies – which is also officially responsible for producing designs for Alpha Tauri, the second team that they own. With the sharing of components across the two entities, I can see the potential for disputes over which entity they should allocate some of the development costs to, given that there may be debates over which entity might officially be responsible for producing that design and which entity they think really was responsible.

      Similarly, Red Bull has set up other subsidiary companies for special projects and for power train development where there could be overlap with the parent company. Again, that could create disputes over what value to assign to that work and which transactions might count towards the wider budget cap.

      1. Yeah that sounds about right. Some of the design work that Red Bull Technologies does will be specifically for either team but some of the work they do will be generic testing of materials etc that would benefit both teams but isn’t specifically for either.

        These are all the sorts of things that lots of us mentioned were obviously going to be a problem when the cost cap was first discussed. Unfortunately it sounds like none of these issues were looked into by the FIA and now we are where we are. I expect this argument to drag on for quite a long time if the FIA try anything more than a warning.

        1. Surely they should have spent less if two teams are sharing the benefits of red bull technologies??

          It stinks, it really does.

          1. I wonder how much the FIA say Alpha Tauri spend compared to what was submitted by them…

      2. It’s just one more reason why there should not be one four car team, and eight two car teams in F1.

  2. Horner words this carefully. Their submission was below the cap. Let’s see what the auditors say

    1. Had the same observation. This is not the same confident Horner we are used to hearing. Horner has clearly been trained on what to speak, how much to speak to the media.

      But of course, that doesn’t prove guilt. It just means that things are under discussion with FIA.

      IMO, there could be another secret agreement in which Red Bull agree to help FIA police the cost cap arrangements better.

      1. MO, there could be another secret agreement in which Red Bull agree to help FIA police the cost cap arrangements better.

        So, you’re thinking there should now be two advisors for the FIA:
        1. Ferrari’s nomination for advice on policing engine technologies
        2. RBR nomination for advice on policing accounting procedures

        I’m not convinced the FIA need the accountancy advice, as they seem to have detected the creative accounting quite quickly.

    2. Red Bull would have had their own auditors look over those accounts. It’s down to interpretation of IFRS and GAAP now…

    3. His statement was two-fold, though.

      1. He says it was below the cap.
      2. He says he believes it was filed correctly by saying they’re “very confident in our submission.”

      So ultimately, at least what it sounds like to me, the disagreement should be in point 2, then. The FIA is putting something in the cap that RBR feels they didn’t need to include. And given that it’s <5% allegedly, it's not going to be a major amount so one would expect the disagreement on what needed to be included (or not) is something quite specific and not just overspending on all accounts (again speculating since lack of actual facts).

  3. It’s a given that Horner will be in the grey area. Suppose FIA actually genuinely regret Abu Dhabi??

    1. Constantijn Blondel
      30th September 2022, 13:43

      “It’s a given that Horner will be in the grey area.”

      Now that, class, is what we call: “understatement” :D

  4. If Christian Horner says it, then it must be true. End of story ;-)

  5. “2021 spending below the budget cap” says Horner. Who also said to his heavily pregnant wife “I’m just nipping out to the shops love” and then cheated on her with a Spice Girl.

    1. Quite the character, indeed. More specific to F1 was his outlandish slander that all teams were cheating on the fuel flow meters back when the V6s were first introduced. All to distract from his own team’s cheating, which ended in one of the rare outright disqualifications in modern F1.

  6. Going by how spread out the field are this season, the budget cap has made zero difference to the sport, if anything, it’s made it worse as teams now can’t spend their way out of bad designs.

    1. It’s been extremely rare for bad designs to be fixed during a season though, even when there was still free testing. Only in 2009 did the double diffuser farce lead to a big change in which teams were competitive.

  7. Look, Christian is not one to lie ….. sorry couldn’t finish the sentence without laughing.

  8. The cap is a joke. Money spent by teams. Money wasted by FIA to catch the teams. Punishing the teams, and their accounting premises, that is a bigger joke.

    As I have said a number of times over the years, this cap will not work.

  9. So Alpha Tauri excluded from 2021 and 2022, case closed.

  10. No budget cap on accountants on lawyers, called this years ago. Just overspend and spend more on fighting whatever the penalties are.

    Doubt the penalties have any teeth. There is absolutely no chance of the title being retroactively removed.

  11. Red Bull spent the limit and their B-team spent the limit, it’s just that half of the B-team’s spending went to Red Bull.

  12. Andy (@andyfromsandy)
    1st October 2022, 9:29

    The speculation is that Aston also went over so it could be them who massively overspent.

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