Site logo

Red Bull overspend an "open secret" says Wolff

NEWS STORY
01/10/2022

Mercedes boss, Toto Wolff claims that Red Bull's exceeding of the 2021 budget cap was common knowledge within the F1 paddock.

Not for the first time, despite the best efforts of F1 bosses to 'spice up' the show, it is the bitter wrangling between teams away from the track that threatens to completely overshadow what happens when the start lights go out.

On Friday, before a wheel had even turned, reports in the German media claimed that Red Bull and Aston Martin had both exceeded the 2021 budget cap.

As speculation spread through the paddock, the FIA was forced to issue a comment on the claim.

"The FIA is currently finalising the assessment of the 2021 financial data submitted by all Formula 1 teams," said an FIA spokesperson.

"Alleged breaches of the Financial Regulations, if any, will be dealt with according to the formal process set out in the regulations."

However, as the story continued to dominate, with claims that Red Bull had exceeded the ($145m) cap by as much as $10m, an official statement was released.

"The FIA is currently finalising the assessment of the 2021 financial data submitted by all Formula 1 teams," it read.

"Alleged breaches of the Financial Regulations, if any, will be dealt with according to the formal process set out in the regulations.

"The FIA notes significant and unsubstantiated speculation and conjecture in relation to this matter, and reiterates that the assessment is ongoing and due process will be followed without consideration to any external discussion."

Christian Horner had been quick to deny the allegation, insisting that his team was below the cap, while hinting that he was aware where the claim had originated.

"We're certainly not aware of any breach," said the Briton. "The accounts were submitted back in March, so it's been a long process with the FIA.

"We're in that process as we speak," he added. "They're rightly following that process and I think next week is when they declare their certificates.

"Our submission was below the cap, and it's down to the FIA to follow their process, which they're currently doing."

"It's funny Christian says that because it's been weeks and months they're being investigated," he told Sky Sports, "so maybe he doesn't speak to his CFO.

"As a matter of fact, we all of us have been investigated diligently," he continued. "And as far as we understand, there's a team in minor breach, which is more procedural, and another team that is fundamentally massively over and that is being still looked after.

"That's an open secret in the paddock," he said.

A $10m overspend would constitute a 'major' breach of the financial regulations, and punishment could include exclusion from the championship and/or even stripping Max Verstappen of his 2021 title, a fact gleefully reported on by some sections of the media.

Wolff has little sympathy, insisting that Mercedes played it by the book, even to the extent of making long-serving employees redundant in a bid to keep within the cap.

As a result, he and fellow team bosses expect the FIA to come down hard on anyone who broke the rules.

"It's heavyweight, it massively heavyweight," he said. "We're using used parts, we are not running what we would want to run, we are not developing what we could be developing.

"We have made more than forty people redundant that are dearly missed in our organisation, and it was a huge, mammoth project to make the cap.

"I don't know how many tens of millions we had to restructure and reprocess in order to be below the cap. And if someone has not been doing that, or pushing the boundaries, every million is a massive disadvantage."

The Austrian also pointed out the potential for overspill from one season to another, whereby a team overspending in 2021 could still have ramifications in terms of its 2023 budget.

Consequently, on a weekend where Max Verstappen could secure his second - or is it his first - title, the sport is locked in yet another bitter battle.

The very thought of stripping the world champion of his title almost a year after he won it, especially when one considers the circumstances of that night in Abu Dhabi, don't bear thinking about, however, if rules have been broken the sport must act accordingly.

If Red Bull has broken the rules then it must be punished, and while it would please many there would be just as many left totally disillusioned, especially after the debacle of Abu Dhabi.

Also, such a move would almost certainly cause Dietrich Mateschitz to question whether he really needs to remain in F1. Should he pull the plug the sport could face the loss of two teams.

While Audi or Porsche might consider taking Red Bull off his hands it is doubtful whether either would want AlphaTauri also.

At which point - oh irony of ironies - Stefano Domenicali might finally have to concede that F1 does need another team or two, even an American one.

Check out our Saturday gallery from Singapore here.

LATEST NEWS

more news >

RELATED ARTICLES

LATEST IMAGES

galleries >

  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images
  • Pitpass.com latest F1/Formula 1 images

POST A COMMENT

or Register for a Pitpass ID to have your say

Please note that all posts are reactively moderated and must adhere to the site's posting rules and etiquette.

Post your comment

READERS COMMENTS

 

1. Posted by TON, 07/10/2022 11:34

"Sow the seed and let it grow

I hope RB sue "

Rating: Neutral (0)     Rate comment: Positive | NegativeReport this comment

2. Posted by yakker, 03/10/2022 12:50

"https://www.pitpass.com/70477/Cash-on-Delivery

Be careful Toto"

Rating: Neutral (0)     Rate comment: Positive | NegativeReport this comment

3. Posted by Max Noble, 02/10/2022 2:18

"@spindoctor - quite so! Cannot wait to see what appears this week by way of FIA press release on the topic!

@Kenji - agree, with the caveat that interpretation of the tax and reporting laws, what is and is not a write off etc.etc. Is demonic in the detail. I was involved in multi-million dollar R&D tax concession reporting for some years, and it was a nightmare… you could make the figures say anything you wanted… you just had to find an answer the auditor agreed with… Also agree that some auditors come in to “find” anything to self-justify…"

Rating: Positive (1)     Rate comment: Positive | NegativeReport this comment

4. Posted by kenji, 01/10/2022 23:44

"Having lived with auditors on a regular basis I can confirm that they are not only a nuisance but sometimes a complete hindrance to operating procedures....but a necessary protection for the shareholders. When i was in business we used one of the big four, at the time, and they were rotated every three years so as to maintain a wide range of interpretation. The problem with some auditors is that they sometimes are guided by the need to 'discover' something otherwise how can they justify their massive charges? Running an F1 race team is the same as running a large corporation and accounting principles and taxation liabilities are guided by the law and one only messes with those at your own peril.I fully expect that the FIA issued guidelines for the teams but those guidlines would have to take into account the different structural arrangements by each and every team. Just allocating what entry line for 'contingemnt liabilities' would be a nightmare! In this case I do sympathise with RB as to publically denounce a team prior to any 'facts' being announced just shows how desperate some people are. I have little faith in the 'court of public opinion'. I hope that RB follow through and take this 'defamation' by Wolff through the legal system.. If for no other reeason it may expose the rat in the ranks. Reputation is paramount and even if RB are found to have transgressed they do not deserve this Wolff spray. "

Rating: Neutral (0)     Rate comment: Positive | NegativeReport this comment

5. Posted by Pavlo, 01/10/2022 20:02

"The budget cap was always a bad idea, but the implementation is ridiculous… I mean it’s normal for financial matters, but totally ridiculous for the sport.
F1 learned to do technical scruteneering and check the on-track actions quickly, mostly before the champagne or very quickly afterwards - and still fans want it quicker.
Now finances are not revealed before the end of the next year. Imagine FIA finds RB guilty, where RB obviously submitted “below the limit” accounts, so they will hire an auditor, appeal, have long process, so by the time we have the championship confirmed we will be 2 years late…
Just consider it, we are not talking about an investigation of “newly emerged facts”, it’s a routine check that happens according to the rules, so championship results are now formally “provisional” the whole next championship… ugly."

Rating: Neutral (0)     Rate comment: Positive | NegativeReport this comment

6. Posted by habentsen, 01/10/2022 15:41

"FIA has done similar things in the past. Drivers have been DSQ from the championship, but not sure about teams?
"

Rating: Neutral (0)     Rate comment: Positive | NegativeReport this comment

7. Posted by Spindoctor, 01/10/2022 13:33

"Nobody saw this coming. Or did they....?
Mr Noble of this Parish suggested that some energetically "creative" accountancy would be deployed by all Teams.

Anyone with even a passing knowledge of Corporate Accountancy practices knows that a Company's Accounts are prepared on the basis of the client telling the accountants a story about what they want them to show. Profits become "Losses", Operating Expenses become "Capital Investment" and so-on. There are even murkier areas where different entities within MeggaCorp(inc) flog services, rent properties to one another etc. The accountants then arrange things to fit that story. Arguments with Governments & Shareholders often follow....

The "Investigations" (of all involved) in this instance presumably revolve around how various Budget lines have been constructed & these complex intra Corporate activities

Formula One 2022 - Never mind the Racing, feel the aggro!
"

Rating: Positive (1)     Rate comment: Positive | NegativeReport this comment

8. Posted by Ricardo_sanchez, 01/10/2022 12:30

"@ Motorsport-fan - there may have been a whistleblower involved but not necessarily. I’m sure the FIA’s due diligence process will have involved asking lots of difficult questions about how the figures in the teams’ submissions were arrived at. In many cases there are likely to have been inter-group transactions to take into account. And there is bound to be a degree of interpretation involved where different teams have used definitions that perhaps don’t match the FIA’s thinking. "

Rating: Neutral (0)     Rate comment: Positive | NegativeReport this comment

9. Posted by Motorsport-fan, 01/10/2022 11:32

"Surely Red Bull would have put in accounts of £145 million or less, they would not have submitted accounts showing £155 million would they? so is there a whistle blower at play here."

Rating: Neutral (0)     Rate comment: Positive | NegativeReport this comment

10. Posted by KKK, 01/10/2022 8:45

"Again I put the blame on Media Liberty's door. What a shame F1 has come to this."

Rating: Positive (6)     Rate comment: Positive | NegativeReport this comment

11. Posted by Simon in Adelaide, 01/10/2022 8:33

"If the financial statements have been prepared by the specialist taxation accountants used by some of the larger corporations then the FIA will probably owe the team’s money."

Rating: Positive (6)     Rate comment: Positive | NegativeReport this comment

Share this page

X

Copyright © Pitpass 2002 - 2024. All rights reserved.

about us  |  advertise  |  contact  |  privacy & security  |  rss  |  terms