Christian Horner opened up on the cost cap breach saga that the F1 team is guilty of from the 2021 findings by the FIA Cost Cap Administration.
The saga which started in Singapore, sort of culminated after Japan when the FIA confirmed procedural breaches for both Aston Martin and Red Bull. The latter were found to have a minor overspending situation too, amounting to 5%.
But Red Bull refuted those claims as social media turned against the F1 team with a certain section demanding the 2021 title to be taken away. The FIA did not reveal the penalty as talks are ongoing to ascertain the extent of a sanction for either of the teams.
Reports suggests of a fine and wind tunnel time cut while indicating that the problem likely was the usage of spare parts. The clear answer will be revealed in the review release which has been deferred due to the death of Red Bull co-founder Dietrich Matsechitz.
Before that, Horner touched on various topics related to the matter on the whole and the witch hunting of Red Bull. He talked about the mental health issues due to the ‘cheating’ tag, Zak Brown’s letter, the process and the current situation.
Latest on cost cap breach and the process –
Horner: “The latest on that is that we are in a process with the FIA. We’re hoping to get closure on that. And at that point in time, then all the facts will be laid on the table and we’ll be able to talk very openly about the cap, and why we feel that our relevant costs are fully in-line. We’re in the process, we’re working with the FIA . They’re diligently trying to do their job and hopefully, in the near future, will have a resolution. It’s a new process. I mean, what you have to remember, with these regulations, is that they were introduced, obviously, at a level where the $175 million, it was then reduced by $30 million during the pandemic, it’s a complicated set of regulations.
“It’s 52 pages. And of course we’ve been through that process and 2021 was the first ever year of a set of very complicated financial regulations, which of course, have a varying… interpretations to them from different accounting specialists. So obviously, the findings of the FIA have been made public recently. And we’re now in a voluntary process with the FIA, going through that process with them. And I hope you will be able to conclude it in the near future. But that’s where we currently are.
Different interpretations –
Horner: “It’s a process, it’s a new process. We made an interim submission in 2021. There was no feedback or suggestion that we were doing anything that was contrary to any regulations. And then, of course, the submission was made in March. Again, we didn’t hear anything from that submission in March until the latter part of September. So, it’s a significant period of time that there was… and, of course, there’s also duty within the regulations for the FIA to guide, to have effective compliance.”
Overspent of about $1.8 million could be a benefit –
Horner: “No. Look, absolutely not. I mean, what you got to look at is what are the relevant costs? And what are the relevant costs within the cap and what’s outside of the cap? And that’s where the interpretation comes from. And our view is that our relevant costs are within the cap. Now, obviously, we are in discussion with the FIA about what those costs are, and what are mitigating potential circumstances, you know, etcetera. So, we had zero benefit from a development perspective or an operational perspective, either for 2021 or for 2022 from the way that we operated it within the cap.
“Our submission was significantly below the cap. We expected certain things to be potentially challenged or clarified, as is the process in a brand new set of regulations, but based on external, professional accounting third parties, the interpretation of those rules, of a 52-page document to police this, were very clear from our side. So, we absolutely and categorically don’t feel that we’ve had any advantage either in 2021, or 2022, or ’23 or ’24 or some team’s even talked about ’26, is totally fictitious.”
Zak Brown’s letter stating it to be cheating –
Horner: “Well, obviously, Zak’s letter – which wasn’t copied to us, obviously – we’ve had sight of that letter, and it’s tremendously disappointing. For a fellow competitor to be accusing you of cheating, to accuse you of fraudulent activity, is shocking. It’s absolutely shocking that another competitor, without the facts, without any knowledge of the details, can be making that kind of accusation. And that goes… you know, we’ve been on trial because of public accusations since Singapore. And the rhetoric of cheats, the rhetoric of… that we’ve had this enormous benefit, that the numbers have been put out in the media that are miles out of reality, and the damage that does to the brand, to our partners, to our drivers, to our workforce, in an age where mental health is prevalent, we’re seeing significant issues now, within our workforce. We’re getting kids that are being bullied in playgrounds that are employee’s children. That is not right, through fictitious allegations from other teams. And you cannot go around just making that kind of allegation without any fact, or substance. So, we absolutely are appalled at the behaviour of some of our competitors.”
Clarify more on the process and ongoing situation –
Horner: “The process, as per the regulations, is that we’ve been invited to enter into an ABA, which is for a minor breach, and a procedural breach, that you have the opportunity to discuss with the FIA and present your case, your position on this. And we’re in that process and have been for the last… pretty much, what, 10 days or so? Going backwards and forwards with the FIA. And I hoped for it to be resolved before this weekend. I’m hopeful that it can be resolved during this weekend. But should that not happen, the next process is it goes to the cost cap administration panel and then beyond that there’s the International Court of Appeal. So, it could draw it out for another six, nine months, which is not our intention. We want closure on 2021. I think that we’ve had some healthy and productive discussions with the FIA, and I’m hopeful of being able to reach a conclusion in the near future.”
Amendments core trouble –
Horner: “Yes, in a simple answer to that question. We feel that, again, at such an immature set of regulations, there’s going to be clarifications and tidying up, and I think, certainly how unused inventory was treated was, in our view, a change to the regulation. Then perhaps… Certainly we applied a very strict ruling in the way that we treated our new stock. And I think that a clarification came out in June that changed the application of that. That had a seven-digit effect on our submission. But, of course, retrospectively, we were not allowed to change your submission. What you have to remember is that the submission can constitute about 75,000 line items.
“So, there’s an enormous amount of data that has to be inputted into these submissions and I think it’s only natural that, in a first year we have a set of very complicated regulations, to be able to get its arms around everything, is almost impossible. Almost impossible. And interpretations have been made, maybe by other teams have been slightly different, and then a change like that has a huge swing in your application of how you’ve completed your form which, had we been able to resubmit at that point in time, we would have treated very, very differently. So, you know, there’s probably several teams that have been affected in that manner.”
Proposed penalty –
Horner: “I can’t tell you that obviously. It’s a confidential discussion between ourselves and the FIA. What I will say is that once, hopefully, this situation is concluded there will be complete transparency and I will talk you through the reasoning behind our submission and the position that we had, as to why we felt that each of the line items that have been challenged we believe there’s a contrary position. So yes, and it should be transparent. The whole thing should be transparent. There’s going to be no private, you know, secret deal. I think it would all be absolutely above board. This is very different to a previous situation.”
Closure in the situation –
Horner: “I think it’s enormously important. I mean, we can’t be waiting and being in October, November to find out, you know, the outcome of a previous year’s championship and I think the FIA going to put the resource in to deal with that, because I think, what you have to remember is this set of regulations was placed upon the FIA to police and I think it’s probably taken them by surprise during the last 18 months, just the scale, particularly with the scale of some of the teams and the complexity of it, to have to have to deal with it. And I think they’ve done obviously the best they can with the resources that they have, but, you know, obviously, the process, we’re assured will be a lot quicker next year or for this year. And of course, you know, there are significant challenges within 2022 that when you look at the amount of crash damage some of the teams are having, some of the update levels that are going on, you know, there are precedents that will be set from 2021 will have to apply and with a consistency in 2022.”
Here’s FIA on all the Japan situation
Here’s F1 drivers on cost cap saga
Here’s FIA on Porsche plus cost cap and more
Here’s Zak Brown on letter to FIA about cost cap