Thursday, September 22, 2011

Did Red Bull cheat?

There is growing pressure coming down on the soon to be double world constructor champions, Red Bull Racing. The issue, a recent audit by a company called Capgemini found "discrepancies" in relation to Red Bull's 2010 budget as it related to the Resources Restriction Agreement (RRA). What is the RRA? It restricts the Formula One teams in terms of staffing levels, the aerodynamic development allowed in-house, the amount of time allowed for computational fluid dynamics (CFD) work and the amount of money for sub-contractors; all aimed at reducing cost in F1. There are a number of stories dedicated to the issue (Here) and (Here).

F1 had been talking about capping budgets for several years and in 2009 under the Mosley administration the RRA came into force for implementation from 2010-2012 (restructured to run until 2017); and as soon as it did teams were looking to close loopholes, renegotiating what is covered and understand what the penalties would be if the agreement was broken. So, did they cheat? Did they break the agreement? No. It boils down to these basic elements. The same auditors that found discrepancies certified the budget of Red Bull and the 2010 budget was submitted to FOTA, something done on a monthly basis until the close of the fiscal year for the teams (according to Stefano Domenicali is the end of February 2011 for FY2010). That is it.

However, there is something more. Just as everything in F1, you push the limits. The boundaries are defined and you push where there are gray areas. When those gray areas are exposed, you clarify the boundaries. Then you push a little further into more gray areas. That is the way it works whether you are talking about double-decker diffusers, F-ducts, flexi-wings/body parts or resource agreements. F1 is quite rare these days in that the teams make the rules in concert with the FIA. So, if a team crafts a rule or agreement with the other teams and it benefits that team, so be it. Teams knew about the gray area the double diffusers posed before the 2009 season, yet some went forward with the design, others did not. This is different only in the fact that one battle is on the car design side, this one is a battle of team management. 

Moreover, this is not a new story.  Mosley in December 2010 remarked to Auto Motor Und Sport, "Red Bull asked for an [overspending] exception. If that's true, that can only mean they spent more than they were allowed, and now they're asking for the [other] teams' approval. I am interested to know how their opponents are going to react."  Some would say, where there is smoke there is fire. In this instance, it is where there is smoke there is smoke. I do not expect to have a "Crash-gate" type revelation or a Worldcom accounting scandal after almost a full season and a certified Red Bull budget. Again, these teams are dealing with a gray and ever evolving agreement. For example, something not yet completely understood and covered is how to handle the use of outside suppliers and spending on future KERS/power train development; especially as KERS and other future, more efficient powertrains come on-line. This will be the new battleground for F1 supremacy that will yield future race team customers to who can get it right.

All the teams are looking for that extra advantage that comes with being able to draw up the rules. So, keep fighting ladies and gentlemen.

Will a Budget Cap work?

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