Salary cap, Shmalary Cap

[bathurst77]

Little Singaporean birds are whispering that two teams (yet to be named) broke Salary cap in 2021.

Now it might be a load of BULL but i A.M hopeful we will soon hear more.

Im not sure who made the allegations but i AM Going to try and FORZ A source to speak up

Make of it what you will

[peebee2]

What salary cap is that then?

[tux]

Its fine, they wont get any punishment.

[peebee2]

Originally Posted by tux

Its fine, they wont get any punishment.

But, there is no salary cap.

If he means for the drivers, TPs and hostility staff, they are specifically excluded from the budget cap.

General technical staff are under the budget cap. Does he mean that?

[crmalcolm]

Originally Posted by peebee2

If he means for the drivers, TPs and hostility staff, they are specifically excluded from the budget cap.

I know Wolff and Horner fire shots from time to time - but which teams have 'hostility' staff?

[peebee2]

Originally Posted by crmalcolm

I know Wolff and Horner fire shots from time to time - but which teams have 'hostility' staff?

Have you ever heard anyone who works in the garage/pitlane ever actually call them hospitality?

[Born Racer]

If they have, they should get a fine to be taken from their budget.

[PhilipR]

If and only if this turns out to be true what are the repercusions:
a) Disqualify them from last year championship will make it all a farce and sure will not do such a thing
b) Deduct constructor points from 2021 or 2022 - will mean nothing as they had huge lead over 3rd place and 2nd place this year
c) Disqualify from wcc - they get extra time to develop next year
d) Budget penalty - well they have won 2 championships so 1 season on the ropes will not hurt that much - plus their car is so fast it might still be highly competitive even with reduced development

Honestly if this turns out to be true, FIA will be in deep thought on how to police this. RB is catching them out on their lax rules. Also FIA and Liberty are too in love with the casual viewer and I doubt they will take some drastic measures that might upset them as majority might not understand cost cap rules

[Mike Harte]

Knowing (or in reality, not knowing) how things happen in F1, I assume that prior to the the caps being introduced, the FIA and the teams agreed to certain conditions and probably penalties for breaching said budgetary caps.

And, of course as is normal within F1, such conditions and penalties were not considered to be suitable for public consumption, like so much that is agreed behind closed doors.

[thetool]

To maintain the integrity of their being a budget cap, disqualification from both the 2021 and 2022 championships and a plan of redress to bring down their spend for 2023 to match other teams in total over the three years (2021-2023) is the only option. Obviously this won't happen, the idea of a budget cap has always been something of a farce.

[BTCC frog]

From racefans:


'If a team has overspent on their cap by up to five percent, the cost cap adjudication panel have the ability to apply a variety of sanctions on offending teams. These include:

Fines (to be determined on ‘case-by-case’ basis)
Deduction of points from the constructors’ championship for the season in which the breach occurred
Deduction of points from the drivers’ championship for the season in which the breach occurred
Suspension from sessions during race weekends such as practice, qualifying, or sprint races but not grands prix themselves
Limits on aerodynamic testing allowances
Reduction of cost cap for the season following from a year when the sanction is applied (breaches for 2021 will result in reduced caps for 2023)
For teams that overspend by more than 5%, the cost cap adjudication panel can apply the same sanctions as above, but with the additional option of excluding teams from the championship.

All of these penalties can be suspended, meaning they will not be applied directly but if a team commits a similar breach a second time. The panel may also place offending teams under increased scrutiny and supervision for the future.'



It's very annoying that it is up to the FIA to choose, rather than there being a set procedure.

[bathurst77]

https://tinyurl.com/yc8czdvk

[crmalcolm]

Credit to Jess McFadyen on Twitter:

"Toto raising a very good point to Sky on the severity of any cost-cap breach:

40 x Mercedes team members were made redundant as part of cutbacks to stay within budget.

People lost their jobs over this."

Obviously doing his hostility on this, but the truth remains that if some people have lost jobs in one team, and see members of other teams not made redundant, there's a moral dilemma here.

[BTCC frog]

The 2021 season is now really reminding me of 1994. In both cases, a fairly young driver with wins in the past, expected to win many titles, finally gets a chance to drive a potential championship-winning car, and is clearly the best performing driver over the season. However, bad luck during the season causes him to only just lead the championship going into the final race, and a controversial incident gives that driver the title that many feel they don't deserve. As well as this, the team is also found to be cheating, giving a second reason why that driver shouldn't have won the title, although the team has lost the constructors' championship anyway. However, the following season, the driver takes a dominant title victory and confirms their place in the record books despite a controversial first championship.

[Richard C]

Originally Posted by bathurst77

https://tinyurl.com/yc8czdvk

TinyURL resolves to this for those of you who don't like the security concerns around using TinyURLs... https://the-race.com/formula-1/red-b...en-budget-cap/

A key quote from that article...

Both transgressions are expected to be classified by the FIA as minor breaches, which means they exceeded the budget cap by up to 5% of its value.

That means the breach could be up to around $7m, which is the equivalent of salary for dozens of members of staff and/or a significant amount of development work.

Assuming the transgression is under the 5% boundary, this will be the most unshocking news I can imagine. Frankly I would be absolutely shocked if none of the teams pushed into the up to 5% overage territory. And I will say I am relatively shocked that more teams have not pursued the same path. (looking at you Mercedes and Ferrari)

Here is a quote from myself from June of this year in the Budget Cap thread around likely team strategies on how aggressive they might be with regards to not just the allowed budget cap value, but how close they might get to tickling the 5% over value (given the penalty should not be significant). Note, we were talking mostly about the freight topic, but I wanted to call out that smart teams are likely to push into the 5% overage range.

Originally Posted by Richard Casto

I have not seen a specific value mentioned in any of the articles I have looked at. The financial regulations allow up to 5% overage without serious penalties kicking in. So it is expected that those teams with money will see how close to 5% over they can get.

Basically, teams can play it two ways. Run up to the budget cap, and maybe even leave some money on the table. Or push the limits of the regulation. I believe the 5% number was built in to ensure teams could spend to the full amount, and allow a bit of creep over, but without incurring a significant penalty. As I called out in June, I expected that if teams were confident in their ability to track their expenditures, that they would push PAST the stated limit and maybe creep up toward the 5% limit. The thing is the report is compiled AFTER you have totaled up everything you have spent. So if you are edging close to the 5% value, you run the risk of something accidently happening (some expense you missed in your planning and it shows up in the final audit) and pushing you past 5% and creating REAL problems for yourself other than a bit of bad PR.

As the quote above says, a 5% overage would be about $7M. I have read a single post elsewhere (that is very much unsubstantiated) that the rumor is that RBR is over by $4M. If true, that is right in the middle of that overage range that doesn't run too much risk. Not too small, not too large.

If all of this is true. No doubt there will be lots of drama. Especially from those who are looking at the back side of RBR on the track. But if you go by the regulations, they should come out of it was a smack on the wrist. You can either think they were cheating, or they were pushing the limits of the regulations like is normal in F1.

We still need to see what the real details are, but if it plays out as I say, is the budget cap "broken" by this? I say no, but I can see that as both the FIA and the teams continue to learn how to work (and provide documentation) for their spending, I think it might make sense for that 5% value to drop down a bit. So the window for overage that doesn't trigger significant penalties could shrink. Lets say maybe 3% in an upcoming season. Still some wiggle room, but not much.

Richard

[Richard C]

Originally Posted by crmalcolm

Credit to Jess McFadyen on Twitter:

"Toto raising a very good point to Sky on the severity of any cost-cap breach:

40 x Mercedes team members were made redundant as part of cutbacks to stay within budget.

People lost their jobs over this."

Obviously doing his hostility on this, but the truth remains that if some people have lost jobs in one team, and see members of other teams not made redundant, there's a moral dilemma here.

As called out early in the thread, this is not a "salary cap", but a "budget cap". Who knows where the overage came from. Maybe it was some other "non salary" cost. But as it all is totaled up in the end, a case can be made to play the "we had to fire people and they didn't" angle.

I have no idea how big RBR was before and after the budget cap was put in place. I assume Mercedes, RBR and Ferrari had to reduce staff. The bigger you were before the cap, the more you had to shrink.

Richard

PS: Ugh.. this post pushed us to the next page. I have a larger post on the prior page that speaks to the larger topic.

[Anyopenroad]

If the penalties for going over the cap by 5% are that minor then any team not spending 105% of the cap is naive.

[bathurst77]

Yes I should have said cost cap or spending cap

https://www.speedcafe.com/2022/10/01...l-regulations/

[Tourer]

Two thoughts on this:
1. Clearly the FIA is leaking like a sieve (as it absolutely should not do) for the information that two teams MAY have breached to be out there in the world, a week or so before the full information is due to be provided - very unprofessional and not surprisingly is leading to mucho speculation.

2. Toto and the MB PR machine is in top gear again, pointing the fingers at "one team" again (remember that they did the same thing about flexible floors - no difference to performance when tougher measuring came into play) and stirring the pot behind the scenes again that it is RB. All pretty tiresome, clumsy and predictable from the boy who is crying "wolf" too much (sorry for the pun).

Maybe a team or two has breached, maybe they haven't, maybe one of those teams is RB, maybe it isn't. We'll find out for sure next week and in the meantime all the in Singapore appears to be due to a combination of FIA unprofessionalism and Toto - with many getting caught up in it.

Personally I'm not surprised that MB had to make some redundant, as MB was considered to have more staff than anyone else (including Ferrari) before the cap, I'm also not surprised that it has taken a while to thrash out detail and work out what is in and what isn't with cap audits - large amount of grey areas no doubt that are likely to only become clear during audit, get defined (in or out) and then everyone knows.

Let's see what comes next week.

[crmalcolm]

Originally Posted by Tourer

2. Toto and the MB PR machine is in top gear again, pointing the fingers at "one team" again (remember that they did the same thing about flexible floors - no difference to performance when tougher measuring came into play) and stirring the pot behind the scenes again that it is RB.

A lot of articles have mentioned Red Bull. I don't recall Toto or MB making any reference (or suggestion) about any particular team.
Do you have examples of when Red Bull has been mentioned (or even implied) by anyone from MB?

[Tourer]

Originally Posted by crmalcolm

A lot of articles have mentioned Red Bull. I don't recall Toto or MB making any reference (or suggestion) about any particular team.
Do you have examples of when Red Bull has been mentioned (or even implied) by anyone from MB?

Toto is specifically quoted in this article, mentioning RB, Christian and RB's CFO.

[peebee2]

Originally Posted by bathurst77

Yes I should have said cost cap or spending cap

https://www.speedcafe.com/2022/10/01...l-regulations/

Yes, though it's going to be interesting to see what happens. Might even be like the flexi-floor MB complained about RB using and then it pretty much turned out MB were the only team to have to change their floor after compliance checks.

[crmalcolm]

Originally Posted by Tourer

Toto is specifically quoted in this article, mentioning RB, Christian and RB's CFO.

So he mentions them, but doesn't make any claim that they are in breach of anything.

The links between potential teams and Toto/MB accusing RB are being made by the press for the sake of their articles.
What is missing is the context of Toto's quoted comments - they may have been in response to a direct question about Horner.

[P38 in workshop]

I may be a little too cynical about the whole business.I seriously doubt that Toto is as concerned about losing 40 staff as he is about being beaten for last year's championship and I will file him in my mental repository of bad losers.
The cost cap was always going to be pushed and those teams with integrated engine production facilities might find it difficult to compartmentalise their spending.Which makes me wonder if any might have accidentally been assigned to the department that didn't hold the entry to the championship.Little things like determining the heat rejection characteristics of the engine and recommending a source of ideal components perhaps.The same might happen with those outfits that have relationships with separate,but associated companies, from which they purchase "technology".The detail that the really high earners in the teams are having their salaries excluded from the cost cap seems to be a real anomaly too.I expect a bunch of accountants are racking up nice fees and in due course the lawyers will follow suit.

[S griffin]

Wonder how long till the name of the team slips out. I wouldn't want to be the FIA in this situation