In view of future budget breaches, Domenicali fears for the reputation of Formula One

He emphasizes the need to be proactive and considerate of the consequences of any action, to avoid a situation that could harm the image of the sport.

Formula One Stefano Domenicali has admitted that he is more than nervous about how the sport's reputation may be affected in the future, that is if another team surpassed the Cost Cap budget.

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Recently, the Red Bull team was found guilty of a minor overspend breach of the budget cap of 2021 after the teams’ spending was fully exhausted last year, with an overspend of about 1.8 million pounds for the season sitting at 1.6% above that season's spending limit. 

The discoveries from the FIA were not announced up until after the sport's summer break and without such an offense happening before in Formula One as 2021 was the first year in a budget cap era, there was an anxious wait among the paddock to see what kind of punishment will be facing Red Bull, with Max Verstappen having taken his first World Championship that particular year.

The punishment came at the close of October and a seven million fine was aligned with a 10% reduction in the computational fluid dynamics allowance for the team, which reduces their wind tunnel capabilities for the 2023 season.

The team principal Christian Horner estimated that such a penalty could cost them up to half a second per lap this year as his early estimates after the punishment was handed down, but the Formula One CEO Domenicali is not sure what kind of impact the penalty will have when it fully plays out.

In his words, he said, “Of course the debate is really relevant for the Federation to tackle that because I want to respect the role that we have. We are the commercial rights' holder, they are the regulator, and I think that when we're talking about penalties that, by the way, were discussed within the teams the financial regulations were being done, has always been a debate.”

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In continuation, he alluded that it's a financial penalty with regard to a sporting penalty more than one or the other. So he thinks that there will be a lot of attention this year. 

As he was expressing himself he said," I see that firstly, there is no need for us to forget that the step change of financial rules and regulations for one has been a step change in the governance of the sport. And I was thinking that we could actually even have more problems to manage because the complexity is really huge. 

Although it was the first time, the process of identifying teams spending was under the surveillance. One of the factors looked at when they are criticizing is how long it took for the financial accounts of the teams to be confirmed as compliant or not, with Red Bull having been found guilty to be in breach of the 2021 budget cap when the 2022 season had already passed its halfway point. 

Domenicali has high hopes to see a solution or resolution found whereby the budget cap certification happens more quickly this time, although the onus will be on the FIA to arrange and organize that through their governance role. 

Let's note that the Formula 1 chief executive officer accepts that scrutiny will be on the teams’ spending this year, particularly after Red Bull has overspent in 2021 and admitted his concerns at the wider implications for the sport if another team is found to have breached the budget in the year 2022.

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