F1 ‘definitely has to take budget cap seriously’ says Hamilton ahead of FIA ruling

2022 Singapore Grand Prix

Posted on

| Written by and

Lewis Hamilton has given his backing to the FIA as it prepares to reveal its assessment of Formula 1 teams’ finances for the first time.

The governing body of motorsport is due to issue certificates of compliance to the 10 teams which participated in the 2021 F1 season to confirm they complied with its $145 million cap on spending – with certain exceptions. Its ruling is expected tomorrow.

Over the Singapore Grand Prix weekend speculation mounted that two teams may be found not to have complied with the rules. Multiple reports before the weekend began claimed Red Bull, whose driver Max Verstappen beat Hamilton to last year’s world championship by eight points, is one of those teams.

While FIA F1 Financial Regulations allow for points to be confiscated in the event of a breach, among other penalties, Hamilton said he is “not really giving much attention” to the recent developments. “It’s all whispers at the moment,” said the seven-times world champion.

He stressed he trusts the FIA, under president Mohammed Ben Sulayem, will make the correct decision if any team has violated F1’s financial rules.

“I’m proud of my team for the diligence that they’ve done to run to the rules,” said Hamilton. “And I honestly have full confidence in Mohammed in the way that he’s conducted himself to this point and in terms of being strict and being clear with the rules.”

Advert | Become a RaceFans supporter and go ad-free

However he pointed out a violation of the budget cap could hand a team a performance advantage. “The rules are rules and for those sort of things, which can lead to real alterations in terms of car performance, those sorts of things, we definitely have to take it seriously,” he said. “But as I said, I don’t know if it’s true or not so we’ll see.”

Mercedes team principal Toto Wolff was drawn into a war of words with his opposite number at Red Bull, Christian Horner, over the reports.

Horner questioned how a rival team could have learned details of their submissions to the FIA. “How on earth do they have this information, where do they have this knowledge?” he said. “The FIA have even stated they haven’t even completed their process.”

The Red Bull team principal accused rivals of spreading rumours as “an underhand tactic that’s been employed to detract from perhaps a lack of performance this year.”

However Wolff pointed out the process leading to tomorrow’s expected announcement has been in motion for months. Teams were required to submit data on last year’s expenditure in March.

“This is not just a moment in time where suddenly you discover a breach or not,” he said. “The audits have been going on for a long time, every team has collaborated with the FIA. They’ve been discussing forward and backwards about how the interpretations go. So it’s over many months, but you come to certain conclusions.”

“I have no reason to doubt that the FIA will not 100% act following their own governance and their own regulations, because they know how important that is going forward,” he added. “We are all aware that regulations, whether it’s technical or sporting and now financial regulations have to be regulated, policed in the right way and we just need to adhere.

“So there’s 100% confidence in the process and the FIA and that’s why everything else is just noise.”

Advert | Become a RaceFans supporter and go ad-free

2022 Singapore Grand Prix

Browse all 2022 Singapore Grand Prix articles

Author information

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...
Claire Cottingham
Claire has worked in motorsport for much of her career, covering a broad mix of championships including Formula One, Formula E, the BTCC, British...

Got a potential story, tip or enquiry? Find out more about RaceFans and contact us here.

56 comments on “F1 ‘definitely has to take budget cap seriously’ says Hamilton ahead of FIA ruling”

  1. This really is the test of the pudding. If they are serious about the budget limit, infractions have to be punished in a meaningful way. Otherwise teams will just take in account they can overspend by a bit and we get into discussions about what is too much, we get “but in previous situations teams weren’t punished” and even discussions about how much (or not) of an advantage was gained, as we’ve had for years and years now with the white lines/track limits.

    To me a punishment would have to be at least subtraction of the same amount doubled with a fine for the following year, or even better have about the same amount/or rather % of spending for 2 consecutive years subtracted from the budget of the team that overstepped. For bigger infringements they defined (over 5%) there should be a sporting penalty as well. I can see an argument for constructors points, but then we’ve seen teams like Ferrari and Red Bull don’t care that much about the constructors championship, focussing on the drivers championship, so that should not be ruled out either.

    But everyone rightly hates changing the results of the last season afterwards (but it’s been a very widely accepted and established way of doing things with all Olympic sports, and F1 is IOC affliated as well, so …).

    Maybe something like a suspended points deduction on both – so as soon as they do even a very minor infraction of this kind, it automatically hits them then and there? Again, should have an effect not just on the season it affected directly, but also on the going season (since it takes almost a year to find out about it!) – would deter?

    1. @bascb

      Agree with everything you said man. If there has been a breach of the cost cap, the FIA needs to set the precedent NOW. Changing last years result is a lose-lose situation for the FIA and F1 in general, but the teams need to realise that there will be a heavy price to pay for breaking the rules.

      To me a punishment would have to be at least subtraction of the same amount doubled with a fine for the following year, or even better have about the same amount/or rather % of spending for 2 consecutive years subtracted from the budget of the team that overstepped

      You’re being far too generous. This would mean teams can overspend in a crucial year (championship winning year), then take the hit for a year they might not prioritise in the same way. I think it should be at least 2X to 3X deduction (on the amount they crossed the budget by) from next year’s budget, plus even lesser windtunnel & CFD parts for the next season. Basically, it should be harsh enough to have a big impact on the following season, which would also affect future seasons. It seems serious enough for a team to play within the rules.

      I also think there should be a quicker accounting monitoring process. The fact that this news is being validated nearly a full season after the previous season shows that action can’t be taken soon enough. I guess the FIA is going to improve the regulations and framework around cost caps, but they need to start addressing issues in reporting lag as well

      1. You’re being far too generous. This would mean teams can overspend in a crucial year (championship winning year), then take the hit for a year they might not prioritise in the same way.

        Maybe I am @todfod.

        I started off from the sad but probably realistic expectation that the FIA will be looking towards some kind of reprimand or token financial penalty (which wouldn’t deter any of the top teams in the slightest, since they can easily afford to pay the fine, unless they go towards Spygate levels of fines), so I proposed a minimum that might be on the cards but would at least be some deterrent.

        I do agree with you though that it would probably have to be a fine and deductions from the current or future budget caps as well that make a real difference. But I am sceptical anything this harsh will happen. It’s not a nose-bud in a black drivers nose, afteral!

        1. Really is an interesting case and was always going to happen at some point, and the first case sets precedence.
          Agree with most you said @bascb and @todfod
          This will be a test of the FIA and how serious they are with the cost cap, and I think the closest case we’ve had in the past is spygate and think similar stance would be appropriate. Exclusion of next year championship (including driver?), and deduction on following 2 years budget or something similar (replacing the fine McLaren got at the time as I think budget reduction is more relevant than fine in this case). Then the actual amounts are up to FIA to decide.

          Regarding timing, they will never be able to do it during same year and before validating WDC and WCC results so as long as it is done before the end of following season, this should be fine. A bit like tax declaration and revision.

          Hard to argue the overspending last year was probably one contributor of Red Bull having such a good package from the start of the season and helped them on both WDC and WCC this year.
          The best we can wish for is a quick and “appropriate” stance from the FIA.

      2. @todfod It’s linked to the corporate accounts for the reason that these are the accounts that are delivered to the legislative and tax bodies of the team’s respective countries each year. If a team were to lie here, not only will they be getting into hot water with F1, there’s a chance that they could be setting themselves up for legal action for submitting falsified or inaccurate accounts, which brings about it’s own set of penalties.

      3. I think it all comes down to how clearly defined the regulations are written.
        I don’t think RBR were stupid enough to break the rules unless they can be interpreted in more than one way.
        I would think they had lawyers looking into this as I’m sure they’re aware of the severity of the punishment it would bring.
        It’s just like chassis design. There are always loopholes to be found and all the FIA can do is modify/update them.
        Of course if they blatantly cheated then they will be punished but if there is any doubt there isn’t much that can be done without it going to a trial.

    2. Sensible enough suggestions @bascb. I think retrospectively changing championship results would be difficult because of the way they are certified (the WMSC signs them off at the end of the calendar year and then that’s it – I remember this being cited as a reason why Renault couldn’t be retrospectively disqualified from the 2008 Singapore GP, because it didn’t come out until the following year). Of course it does happen in other sports, but it would be legally tricky.

      Financial penalties are also potentially problematic as there is then the possibility of them being seen as a “tax” on overspending, which of course the big teams would be able to easily absorb, further widening the gap between the bigger and smaller teams.

      I think the most practical penalty would be to impose a points deduction on the following season – that is, an overspending team (and potentially its drivers) start the next year on a negative number of points, the size of which is dependent on the scale of the breach. That of course has knock-on financial effects as it could impact on prize money.

      1. Yeah, I agree that subtracting points from the going season would make sense, and probably be a real deterrent @red-andy. I would probably want to add some budget cap constraints and / or further limits on CFD etc for that season as well on top though.

        And it would be good if we automatically included a suspended further penalty to make sure they would immediately get a harsher penalty for repeated infringements.

    3. There is no point even having the limit if they allow teams to benefit from breaking it. If it was broken to win last year, that win has to be undone.

      Subtracting points this year, if it were Red Bull, would give them two years of wins thanks very much! So this idea is the worst kind of timidity.

      1. Strange all of a sudden this is discovered.
        RBR isn’t stupid enough to blatantly break a rule with the severity of consequences it would bring.
        There must be a “grey area” where the interpretation can be taken in more ways than one.
        Be surprised if any penalties will be incurred.

        1. Well this is why teams are commenting isn’t it. They’re suspecting this grey area as you say, and they’re saying they want the performance effect looked at, not just the accounts and what gets put into which nominal category.

          Anyway we shouldn’t be assuming any guilt at this point. I’m just saying that as a deterrent a points deduction for only this year doesn’t make sense. IF they overspent last year, they have to have last year’s benefit removed.

    4. Reversing results is the only way. If you don’t do that it just becomes a money problem and it actually increases the gap between the haves and have nots. If RB were kicked out of last years drivers and construction championship for this then they wouldn’t do it again. If they have a fine or reduced budget in the next year(which is no different than a fine) then it means nothing if you have unlimited funds.

    5. Well I hate to bust bubbles but it’s being reported RBR did exceed the cap but it’s by such a minimal amount nothing major if anything will happen to them.
      If it’s true and we will know tomorrow, I hope RBR goes after Merc and Ferrari for defamation.
      There was a mole involved and his employer must be identified.

  2. It just sounds so demeaning every time Hamilton mentions his new ‘friend’ Mohammed. As though his predecessor was the most dishonest, inept and corrupt individual on the planet.

    And even if that were the case, it doesn’t matter what Hamilton (or any other driver) thinks of the FIA, because they’ll do their job the same anyway, regardless of that affirmation.

    1. But historically they’ve shown that they have not done their job the same way or maybe you just glossed over that fact.

      1. By “the same way” I mean they’ll do it “their own way” – the way they feel like doing it at the time. I didn’t mean to imply they were ever consistent in any other way, because that would indeed be completely untrue.

    2. Sikhumbuzo Khumalo
      4th October 2022, 10:42

      You are really clutching at straws here.

      1. I can’t help it if Hamilton often comes across sounding insincere and patronising.

        1. you can help pretending he does

    3. Michael (@freelittlebirds)
      4th October 2022, 19:17

      It’s a valid point you’re making about Mohammed’s predecessor being the

      most dishonest, inept and corrupt individual on the planet.

      1. There was a pre-race agreement to try everything to not have a race finish under SC, he followed that.

  3. It’s funy that everyone knows Red Bull exceeded the budget while no-one knows which teams did because the FIA still didn’t finished their investigation yet. Legaly this is not done… I think that Budget isn’t going to do anything If a team give their numbers checked by a account firma is refushed by the FIA then the FIA get sued for a lot of money.

    It’s so that the budget of teams is done by officiel accountants who then delivers those to the FIA accountants?

    I see a lot of courts coming up between accountant offices..

  4. How clear are the rules anyway? Probably not if I read “They’ve been discussing forward and backwards about how the interpretations go” and its going on for months. Probably this is also why RB states they are confident in the outcome they believe that their interpretation is correct and probably appeal if the FIA decides to give a harsh penalty.

    1. Lots of F1 rules and regulations are treated the same way – the FIA aren’t willing to stand up to the teams with a firm, solitary application. Alternative interpretations (and even blatant cheating) are always met with flexibility and negotiation rather than a firm “No, you are wrong.”

      It’s the main reason that F1 (holistically speaking) is the way it is – always trying too hard to satisfy everyone, ultimately ending up with such a terrible compromise that nobody is satisfied.

      1. It starts with clear rules and this is not something the FIA has a good reputation for. It was one of the main arguments against the cost cap regulation. The worst thing is that it takes almost 9 months to figure this out while you expect this is a continous proces that is monitored during the season. But I agree with you that they will always try to get some compromise or get an agreement its a lot of politics behind the screens. The big manafactures and sponsors don’t need bad publicity if they spent so much money.

        1. And yet, bad publicity (ie being known as a cheat) is the best way to force them into line….

          The FIA is in the ultimate position of power, yet are totally afraid of using it.
          And they wonder why nobody has any respect for them…

        2. petebaldwin (@)
          4th October 2022, 9:53

          The trouble is, it’s extremely difficult to write a set of complex rules that can stand up to 10 very clever teams who are well versed in exploring every possible interpretation and loophole they can find. Often, finding a compromise means “We’ll give you x punishment and then that’s the end of it – no appeals, no court cases, no discussion with the media. It’s done.”

          If they fail to get agreement from the teams and we’re talking about something fairly drastic like a massive fine or stripping Championships from people, they lose control of the situation. Appeals will fly in, cases will be taken to court outside of the FIA’s control and the damage will be pretty severe.

      2. Exactly. It’s not like we don’t know already how this will be handled because every other rule is handled this way.

    2. Maybe it contains a phrase like “any costs regarding … is considered as part of the budget”

      1. Ahah, that’s indeed very likely!

  5. Why do people think redbull only focus on the drivers championship? Thats Horner denialism. The money is in the constructors championship. He said that because the constructors championship was out of reach for him. While no one likes standings, points etc to be changed. What must happen must happen what we like is irrelevant. If redbull lose points and are stripped then so be it.

    1. I think it’s more that fans are focused on it. Teams have always cared more about the constructors. Frank Williams would always state that to him the drivers was meaningless.

  6. So every time Lewis races with jewelry he will be scrapped from the results or gets a DSQ.

    We have to take the rules on safety seriously.

    Its also quite telling how buddy-buddy Hamilton wants to be with the FIA President, who you would want to be impartial.

    Mercedes F1 dearly misses Niki Lauda.

    1. Reminds me of when the GOP was going after Obama for wearing a tan suit. You know someone is essentially peerless when this is all you’ve got.

    2. Wrong article. This is about teams breaking a budget cap.

  7. When Saracens breached the rugby premiership’s financial rules, their previous results weren’t stripped, but they were deducted loads of points in the season the ruling happened, which not only dropped them out of contention that season, but also relegated them so the following season was a write off too. I’m sure some teams were still unhappy that they were “cheated” out of winning in the past, but it was a very heavy penalty and meant Saracens were an irrelevance for two years. I would like to see something similar hear for teams breaching spending rules, so that they’re heavily penalised for the following couple of years, but we don’t start overturning past results.

    1. They have a salary cap and got a yellow card (warning) in the previous year that explains the points deduction in the following seasons. Still a bit strange if financial and sporting regulations are mixed. It doesn’t make you a better player if you get a higher salary but of course it’s easier to hire the best players if you do. Still they where the best team that year.

  8. In a way over spending in F1 is a bit like doping in other sports, if you look at cycling lance Armstrong was stripped of his Tour De France wins when he was found guilty, same athletes with the Olympics as well.
    I’m not saying Max (if it is Red Bull that has overspent) should be disqualified from last year/ this year but the punishment needs to be so severe that the teams will not risk exceeding the cap in the future.

    1. Michael (@freelittlebirds)
      4th October 2022, 19:18

      Are you suggesting that they give Max an extra WDC? The way things are headed, they should be sold at Walmart and we can buy one for a price that doesn’t exceed our budgets :-)

  9. I disagree with Martin above for the fact that the gains Saracens made by breaking the rules reulted in them winning trophies.
    I prefer to look at the cases of Olympic sporinter Ben Johnson, cyclist Lance Armstrong and football team Juventus. Johnson had his gold medal stripped, Lance Armstrong had 7 Tour titles stripped and Juventus had their 2005-06 title removed and they were handed last place as a punishment, dropping them into a lower division.

    If a team has deliberately broken the financial rules, it’s for one purpose – it’s so they can maximise the performance of their team and ultimately their car. If they broke the financial rules last season, this advantage would have been taken into every single qualifying session and every single race throughout the season.
    That advantage may have been small but spread over a whole season in quali and in races it can add up.

    I simply cannot see how anyone can suggest a team’s season be punished in a year where they did not commit the rule breach instead of punishing the year when they did. That would mean titles and trophies being taken from teams and drivers but that’s the only fair result of cheating the deliberately strict financial rules.

    Sport is either clean or it is not, there is not grey area and the danger with not taking the strongest possible action to rule breaches like these is seen in Saracens case, to this day their titles are widely seen as tainted within the sport.

  10. petebaldwin (@)
    4th October 2022, 9:41

    “We are all aware that regulations, whether it’s technical or sporting and now financial regulations have to be regulated, policed in the right way and we just need to adhere.

    See…. that sort of highlights the problem. F1 teams have to adhere to technical and sporting regulations but that doesn’t stop them constantly looking for loophole and creative interpretations that they can exploit. Lots of people are making an assumption that a potential overspend of the budget cap is extremely simple – the equivalent of speeding in the pit lane or weighing 5kg under the minimum weight. Team A spent £110m when they were only allowed to spend £100m so it’s a simple penalty…..

    As we all know though, this doesn’t tend to be how F1 works. Instead, you often have different interpretations of rules that leads to things like double diffusers, DAS, flexi floors and so on which are against the spirit of the rules, are not what the FIA intended to allow but technically, can be argued to be within the rules. The FIA then change the rules to close off the loophole and everyone moves on.

    We don’t know the specifics of what is alleged here other than supposedly two teams have breached the budget cap – one more than the other.

    Is it through a loophole that needs closing? Is it a technicality (eg your engine department was set up after x date so for that year, it counts towards the budget cap)? Is it just a blatant overspend? That’s going to be key as to how this plays out because unless the FIA and the teams in question can come to an agreement on how to proceed, this will head to court and it could be quite a lengthy and damaging fight for the sport.

  11. if a team was 5% over the budget can, then a 5% reduction of their points from season 2021 would be a just punishment. If that means awarding a new World Champion then that is fair. The FIA disqualifies teams from race for being .2 of a liter below fuel, so they have to take this deadly serious.

    1. The FIA disqualifies teams from race for being .2 of a liter below fuel, so they have to take this deadly serious.

      That, of course, is a technical regulation, and technical regulations tend to be much more black and white. Either there is 1 litre of fuel or there isn’t.

      Financial and sporting regulations are based much more on mutual interpretation rather than a pure right/wrong scenario.
      It’s the FIA’s position to say what is right and wrong – but, as usual, they’ll wait until it all goes pear-shaped before they decide.

  12. Even a minor breach of the cost cap could win a championship. Therefore, the only possible punishment is removal from the championship for both constructor and drivers, refunding of all prize money. return of all trophies and double the amount of the overspend deducted from the cost cap for the next 2 seasons.

    The deterrent for breaching the cap must be so draconian that no team will ever contemplate breaking it. even accidentally.

    1. No matter the penalty, someone will try it.
      Anywhere an advantage can be gained, they will explore the possibility.

      1. true, but then they must suffer the consequences.

    2. Not supporting any team in particular but of course none of this is going to happen. Ferrari got a slap on the hand in the past when they cheated on everyone else. No points were deducted; no trophies were returned. RB will get some warning for their misinterpretation of the cost gap rules. That’s all and we move on.

  13. The situation with the cap has to be policed for sure. So if team surpassed it a penalty should be in place. However the fact that Wolff addresses this while information is not yet shared by FIA should be dealt with as well. Firstly the leak has to be found (a very likely candidate is clear.. former Toto employee now in top FIA, but lets investigate first to not do what Toto is doing now). Secondly Toto will need to be replaced is his accusations turn out to be false. So either RB will get a penalty or Wolff needs to get one. This situation in which Wolff can just use PR to steer championships has to stop in order for FIA to uphold any credibility.

  14. Suppose a team was discovered to have an extra hidden fuel tank (like BAR used in 2005), or a button which enabled traction control (Ferrari). In both cases, you’d immediately disqualify the car. There have been numerous examples of cars deliberately breaking the rules over the years. So what if we discovered now that one of last year’s cars had a deliberate cheat, say a hidden mass damper in the nose, or the rubber compression washer trick that Toyota used to try to avoid detection of their engine cheat in Rally cars back in the nineties? If those cheats were discovered at the time then it would be easy, disqualify them immediately and for future races, but if it takes nine months to discover this, does that make it any less of a cheat? A budget cap cheat isn’t really any different from an engine capacity cheat. Both have a direct impact on the car’s performance.

    1. No its not the same because spending more money doesn’t mean that your car doesn’t meet the regulations it only means that you can develop faster or catch up if you are already behind in performance

    2. Both have a direct impact on the car’s performance.

      Not necessarily.
      A technical part is there for a purpose – it has a function and physically creates a performance variable.
      A financial discrepancy, on the other hand, may have absolutely zero effect on car performance.

      Ferrari knows that spending more money doesn’t automatically make your car or team better….

      Breaching the budget cap is certainly breaking the rules – but it doesn’t automatically imply a performance benefit.
      That’s what the FIA have left themselves negotiating room for.

    3. Maybe, but apparently there is no consensus on interpretation of the rules or at minimum there is still a conversation ongoing. That will make it difficult to judge this as a black or white situation. One thing is for sure, the fora will go nuts after Wednesday, whatever the outcome is. Liberty & Netflix are the big winners here (again).

  15. A retrospective penalty would sit very badly with many. Equally though, a penalty applied after the event isn’t really a penalty in F1. We already have a situation where teams are willing to write off a season and focus on using races to develop technology for the following year’s car. If teams are given the possibility of overspending this year to win the big prize, at a cost of a very bad year next year, for sure some will do it. Winning the championship in one year is a better result than finishing runner up in two years.

    1. I think what makes most sense, also because this season is over, is giving a budget cap reduction for next year proportional to the overspending done, and maybe say: it was the first season, mistakes could happen, but if the cap gets broken again there will be more severe penalties, including points deductions. In the end of the day, the teams most likely to break the cap are the biggest ones, so a fine, even spygate like, wouldn’t work.

  16. The sport is in tatters and many fans are losing faith with F1. Just because something is difficult, doesn’t mean we shouldn’t do it. Principle and credibility is at stake here so if a team has spent more money than others, they should be penalized for every season it has affected. As the driver has also benefited from the overspend, they also should be penalized. Other sports have done this, obviously Lance Armstrong is the one that springs to mind. It will also not be good enough if the numbers get “fudged” in some way, access to information is too good today and we the fans can see through this. Time to be strong FIA!

Comments are closed.