Two teams lured staff with “incredible salaries” despite budget cap – McLaren

2022 Singapore Grand Prix

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Two Formula 1 teams were able to make “aggressive” approaches to rivals’ staff despite the constraints of the budget cap, says McLaren team principal Andreas Seidl.

The FIA is preparing to reveal the outcome of its analysis of teams’ submissions on how much they spent during last year’s season. That was the first year the FIA enforced its spending cap, set at $145 million.

Reports claim two teams have been found in breach of the regulations. Red Bull, which took Max Verstappen to the drivers’ championship last year, has strenuously denied it is one of them.

Seidl stressed that “on our side, we don’t have any facts or evidence that there’s actually any breach or even cheating around, so that’s why I want to comment only more general.”

He is confident the FIA can accurately judge whether each team met the spending limit, despite the differences in how each of them is set up.

“Having experienced ourselves now in the last 12 to 18 months the audit from FIA’s side, which was done in a very thorough and diligent way, I’m absolutely convinced that the establishing of the numbers can be done in an absolutely correct way, ending up in comparable numbers between the different organisations,” he said. “I don’t have any doubt there.

“Now it’s simply important that there is full transparency of what is actually happening, because it is clear that if someone is spending more money going beyond the cap, it’s a performance advantage.”

Seidl pointed out McLaren had to lay off staff and cut the pay of others in order to meet the cap, and questioned how two other teams were able to approach their employees with lucrative offers.

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“We have an obligation to our people, from the FIA’s side and from our side, because even for a team like us, the introduction of the cost cap meant we had to put some really serious measures in place which were affecting our people. We had to make people redundant as well, we had to ask our people to accept pay cuts or pay freezes, which was very serious.

Two teams were doing “incredible aggressive hiring”, said Seidl
“At the same time there was, especially from two teams, an incredible aggressive hiring still ongoing, throwing incredible salaries on the table and offering unbelievable company benefit packages where we are all wondering how this is possible in this new world of Formula 1 and our people are obviously challenging us if we do everything right on our side.

“That’s why we simply welcome clarity on this because in the end we will find out that if maybe we have missed something on our side or if there actually were breaches ongoing and we have a clear explanation why certain teams can do certain things which we were simply not in a position to offer to our people.”

Deduction of championship points is among the possible penalties for exceeding the spending limit. Seidl said Formula 1 must be prepared to change the results of past championships if a team is found to have exceeded the budget cap.

“In the end the financial regulations now are as important as the sporting one or the technical ones,” he said. “There’s no difference.

“It’s very important that, from the FIA’s side, they make sure that they police them properly, enforce them and put proper penalties in place in case there is any infringement, even if it’s done affecting championship outcomes from the past.”

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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...

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35 comments on “Two teams lured staff with “incredible salaries” despite budget cap – McLaren”

  1. Typical stories about staff being offered double or triple what they were earning before. And for everyone in non mechanical and engineering industries may think it sounds plausible, when it simply isn’t at all.

    No company has go the financial space to double or triple their wage expenses.

    1. People would be surprised to learn salaries in F1 really are not all that great. The budget cap has made it worse. Think it’s awful they are free to pay drivers and principals however much they want while people at the bottom get their salary squeezed or made redundant.

  2. Deduction of championship points is among the possible penalties for exceeding the spending limit. Seidl said Formula 1 must be prepared to change the results of past championships if a team is found to have exceeded the budget cap.

    What a clown show this sport has become since last year. Exclude Red Bull and the other team presumed to have been in breach from the constructors this year is the best penalty if they are found to be so. FIA deserves a slap in the face if they will deduct points in last year’s championship.

    1. Very true, going backwards to 2021 to apply penalties now is just silly.

      1. Stephen North
        3rd October 2022, 9:25

        The salary cap effected results last year, if other teams were using inferior parts. less time in wind tunnel developing the aero dynamics, if they cheated they should be punished in the relevant year regardless if it’s already finished, they potentially have taken prize money from other teams by cheating.

    2. @krichelle Why? Teams like Marseille and Juventus have been retrospectively stripped of their league titles in football. Football still continues and those circumventing the rules (cheating) are deterred. Same applies in many other sports and competitions, sometimes years later. Why exactly should Formula 1 be different? Just asking…

      1. Well, it’s the FIA’s responsible for getting into this possible mess. You know me as a Mercedes fan, I would not mind deducting points from Verstappen in 2021, but in doing so, we will make the image of the sport even worse than last year. I hate to say it really, but it’s now up to them.

        1. Well, it’s the FIA’s responsible for getting into this possible mess. You know me as a Mercedes fan, I would not mind deducting points from Verstappen in 2021, but in doing so, we will make the image of the sport even worse than last year. I hate to say it really, but it’s now up to them.

          You could strip them of the awards and leave the season result as NULL.
          If I were Hamilton, I don’t think I’d want something that had been dragged through worse than mud.

          Obviously any overspend last year has to be carried forward, as in any other set of accounts, and if they are sufficiently under budget this year they can cover that. If not, well, it looks like the points total this season might be a bit low.

        2. I agree it is better to police in the moment. Changing results in hind sight just shows you are not in control and it leads to a situation where a victory is always a provisional victory, which will make the whole thing considerably less interesting to watch since any celebration now might be taken away at a later stage.

    3. @krichelle Issue would be that if the breach occurred in 2021, If it was Red Bull and if it was a big enough breach that it would have had an effect on the outcome of the championship & the FIA don’t deduct points from 2021 then that sets the precedent that you can overspend to win the championship and get to keep it.

      Doing so may not be a great look for the image of F1 but the integrity of the sport and it’s regulations should be put above that. If a team is found outside of the technical regulations after a session even by a fraction then they are disqualified from that session, If they are found to have been outside the regulations for a season (The cost can covers a full season and not a single session or race weekend) then it’s fair for them to be excluded from the season.

      If they are going to have this cost cap then they need to police it with severe penalties in place for breaching it as if they don’t there will be nothing to stop teams breaking it to win championships.

    4. Agree with the majority you posted but punishing teams that presumed to have been in breach? Whatever happened to innocent until proven guilty?

      1. Who suggested punishing teams on a presumption of guilt?

      2. The sentence was somewhat tortured, but if you’d read all of it, you wouldn’t have made your post.

        Exclude Red Bull and the other team presumed to have been in breach from the constructors this year is the best penalty if they are found to be so.

        .

    5. You think Lance Armstrong should get to keep his 7 Tour de France titles? Or Ben Johnson should get to keep his 100 metres gold medal?
      Nonsense. If teams broke the rules to gain an advantage then they should not be allowed to profit from that advantage. If they broke the rules last season they should not be able to keep anything they accrued while breaking the rules.

      1. Lance Armstrong is an interesting example because his Tours were not awarded to anyone after he was retrospectively disqualified – there’s just no winner for those years basically on the assumption that everyone was doping. I don’t think this applies to F1.

    6. since last year

      Oh, you made me laugh. Thank you!

    7. Or reduce their budget for this year by the amount they over-spent last year.

      But, as Wolff pointed out– if Red Bull was able to develop a better car last year (for 2022), and then a new, much lighter chassis this year, then that may not be enough to stop them from continuing to dominate based on last year’s over-spend.

      It wouldn’t surprise me if every team on the grid sat down and calculated how much they’d get fined, vs. how much they could over spend, and how much risk-to-reward there was to deliberately over spend to get a jump on the 2022 era.

      1. @grat exactly ‘as Wolff pointed out’. That’s not a fact my friend, but the bias of a fan. I only read how MB reacts as a bunch of sour lozers and frames RB this whole season on every occasion Wolff is seeing. And he is successful in getting attention looking at the articles on this website. And their fans love it and are already dreaming of a eight worldtitle for sir LH for the 2021 season. Meanwhile it suits many that It is rather curious from who Toto is getting his info and often makes unfundamented accusations at RB. For a few weeks ago he accused AT of cheating and the lewis fans went mad. It was completely wrong that RB owns 2 teams etc etc. That Toto is influencing half the driving field while they are using MB engines, doesn’t bother no fan here. There for we had to believe the RB floor was illegal. I remember how Russel was made as MB’s PR puppet using words as ‘illegal’ floors. I wonder how the FIA reacts on this knowing how they react on the cheating ferrari team few years ago. Till now we can only wait

        1. Well the floor thing was a pertinent lie by Wolff. Again an unpunished one. He just gets to say whatever he wants. If he now did it again, he should be banned from the sport. So for his sake I hope the allegations are true. If not he really has become a too big pain in the to stay around

          1. Sorry I wasn’t meant to report your post. But if they went over the gap there should be a penalty. I don’t know what kind of a penalty but a penalty.

  3. There should be a poll about which two teams they are referring to :)
    My guess would be Red Bull and Aston Martin !

    1. Yes u got it right

    2. I think one of them is definitely Alpine. I’m pretty sure I read somewhere that they were hiring many staff..second may be redbull since they’re already in black waters for a potential breach

    3. I remember there were lots of reports last year of Aston Martin hiring new stuff, including from Mercedes, Red Bull and other teams, so your guess seems on spot to me.

      1. I think you need to consider the logistics of setting up new team – all the people other teams *have already* need to be found, tempted, and hired asap… that’s not an extra cost compared to established teams, in fact until they getenough staff they will be spending less rather than more than the others.

  4. One thing that this makes me wonder is whether this is all to do with signing bonuses, championship bonuses, or salary payments, and a debate over when those payments should be made? I seem to remember both RB and AM making some pretty big staff signings last season, but a lot of them wouldn’t start work until the start of this year iirc. I wonder if there’s a debate about whether the signing bonuses would therefore count under last season’s budget cap or this season’s.

    Pure speculation, but something that just crossed my mind.

    1. Red bulls staff signing was all about the engine dept, excluded from the cap.

  5. The problem is how the big teams and especially OEMs are reallocating expenses elsewhere.
    It’ll get to the point the FIA has to remove some of the freedoms in how the teams are structured & have them all run the same model … even down to specifying maximum numbers of staff in certain areas directly relating to on track competition..

  6. Maybe Horner should be asked if Red Bull was over the cap for 2021 and demand simple “No” as an ansewer. Anything else would statue “yes”.

    1. Yeah– Horner didn’t say they weren’t in breach of the regulations. He said he believes the paperwork they submitted met the regulations.

      Horner never offers a flat-out denial. It’s always redirect, evade, and claim they met the standards for the test, not the rule.

  7. It’s time a knobhead cap was imposed on the teams. Horner, Marko, Wolff and Stroll would be straight out the door, for starters.

    1. Couldn’t agree more. It has reached a point somewhere past ridiculous

  8. At McLaren, we wear our cost cap backwards because we’re a bit of a character.

  9. So a team spent up big on new hires. Not really a big deal. It just means they have less to spend on the actual car.

    One of the teams mentioned at possibly overspending has turned out a pretty ordinary car, so maybe they need to work out just where it’s better to spend money.

    To me this whole “drama” seems somewhat manufactured for the benefit of DTS etc to inject some drama given the season has been a damp squib. After all we can’t have all these new fans losing interest can we.

  10. Still think its disgraceful that salaries at the top aren’t included in the cap but people at the bottom have their salaries squeezed.

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