Financial penalties not enough for budget cap 'cheating' - McLaren

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McLaren CEO Zak Brown says financial penalties are not enough for any team caught "cheating" Formula 1's budget cap.

A day after Max Verstappen was crowned world champion for the second time in Japan, the FIA announced his Red Bull team had committed a "minor overspend" of last year's $145m cap, meaning they had exceeded that figure by as much as of $7.25m.

With the Cost Cap Administration now considering what action to take, the matter is set to dominate the conversation at this weekend's US Grand Prix.

But in a letter seen by the BBC, the McLaren chief wrote to the governing body highlighting the significance of the financial regulations and the impact of any breach.

"The cost cap introduction has been one of the main reasons we have attracted new shareholders and investors to F1 in recent years, as they see it as a way to drive financial and sporting fair play," Brown wrote.

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"It is therefore critical that we be very firm on implementing the rules of the cost cap for the integrity and the future of F1.

"An overspend breach, and possibly the procedural breaches, constitute cheating by offering a significant advantage across technical, sporting and financial regulations," he stated.

"The FIA has run an extremely thorough, collaborative and open process. We have even been given a one-year dress rehearsal (in 2020), with ample opportunity to seek any clarification if details were unclear. So, there is no reason for any team to now say they are surprised.

"The bottom line is any team who has overspent has gained an unfair advantage both in the current and following year's car development."

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Possible punishments facing Red Bull for their breach include:

  • Points deductions in both championships from 2021
  • A reduction in wind tunnel testing time for 2023
  • A budget cap reduction for 2023
  • Suspension from Grand Prix weekend sessions excluding the race
  • A fine 
  • A public reprimand

And Brown is urging the FIA not to ensure penalties hurt an offending team on the track as well as in the pocket.

"We don't feel a financial penalty alone would be a suitable penalty for an overspend breach or a serious procedural breach," he claimed. "There clearly needs to be a sporting penalty in these instances, as determined by the FIA.

"We suggest that the overspend should be penalised by way of a reduction to the team's cost cap in the year following the ruling, and the penalty should be equal to the overspend plus a further fine - ie an overspend of $2m in 2021, which is identified in 2022, would result in a $4m deduction in 2023 ($2m to offset the overspend plus $2m fine).

"For context, $2m is (a) 25-50% upgrade to (an) annual car-development budget and hence would have a significant positive and long-lasting benefit.

"In addition, we believe there should be minor overspend sporting penalties of a 20% reduction in CFD and wind tunnel time. These should be enforced in the following year to mitigate against the team's unfair advantage and will continue to benefit from."

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The McLaren chief also put forward further changes to the financial regulations...

"To avoid teams accumulating and benefiting from the multiplier effect of several minor overspend breaches, we suggest that a second minor overspend breach automatically moves the team to a major breach," Brown continued.

"Finally, given the financials involved, a 5% threshold for a minor overspend breach seems far too large of a variance. We suggest a lower threshold, 2.5%, is more appropriate."

In conclusion: "It is paramount that the cost cap continues to be governed in a highly transparent manner, both in terms of the details of any violations and related penalties," Brown writes.

"It will also be important to understand if, after the first full year of running and investigating the scheme, there needs to be further clarity on certain matters or any key learnings. Again, any insights or learnings should be shared across all teams - there can be no room for loopholes."