Formula 1's Cost Cap Breach Rumours 'Unfounded', Says FIA

The FIA issued a statement outlining its investigations into the team's compliance with the F1 budget limit, in an effort to put an end to recent speculations. Despite the current investigation, allegations persist in Formula One that two or more teams broke the financial laws last season. Last year, in September, speculations circulated that Red Bull had committed a small infringement in 2021 and that Aston Martin had committed a procedural breach, but the news wasn't verified until October. The FIA hoped to wrap up this year's procedures sooner than usual so that the outcome wouldn't be delayed for almost an entire calendar year. Now there are 10 full-time workers in the process, up from 4 the year before. That hoped-for result is still very far off. Still, the rumours concerning the procedure have prompted the FIA to deliver a strong response.

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F1: What were the Rumours?

In the days leading up to the Hungarian Grand Prix, speculation arose that three teams could have over the 2022 season's budget limit. The FIA audited the 2021 season and found that Red Bull had spent more than the allowed USD 140 million in the first year of the Financial Regulations applying to the sport, leading to a USD 7 million fine and the loss of 10% of the team's wind tunnel development time.

The FIA has said that the process of examining each team is far from complete, so claims that Red Bull or Mercedes are under suspicion are baseless. Since we are still in the middle of the procedure. As the FIA scrutinises each submission and requests further information from the teams, it seems that suspicions of an infraction may have emerged via the process thus far. The FIA wishes to make it clear that any notion that a violation has been committed and verified, even behind closed doors, does not seem to represent reality.

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F1: What is Cost Cap?

Formula One teams are subject to a budget limit in an effort to control in expenditure, prevent budgets from ballooning out of hand, and promote balance. The Formula One cost limitation restricts yearly spending on race vehicles by each team. In 2021, it initially took effect. The budget ceiling was originally agreed upon before the epidemic struck and set at USD 175 million. After COVID-19 disrupted the 2020 season and left some clubs in a dire financial bind, the budget was reduced to USD 145 million.

The budgets of some teams are large, whereas those of others are far more modest. This usually translates into on-track performance, making it very difficult for 'poorer' teams to play catch-up.

The cost limit is mostly there to guarantee enough teams survive to make up a grid, but it also represents a long-overdue effort to level the playing field. It's a positive development for the reputation of a sport many people see as wasteful in a world where frugality and sustainability are increasingly valued.

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