Alpine Boss Identifies Cost Cap "Loophole": "Effectively, We Don't Have a Cap"

Otmar Szafnauer has identified a way teams will be avoiding the cost cap by reallocating resources to other projects.

Otmar Szafnauer has identified a way teams will be avoiding the cost cap by reallocating resources to other projects. 

Formula 1's budget cap came into effect in 2021, and with the maximum spending capped to just $135m for the upcoming F1 2023 season, teams will be looking at ways they can bend the rules to increase their spending. If Alpine's team principal Otmar Szafnauer is to be believed, teams are already looking at a big "loophole" to exploit. 

Szafnauer's concern centres around the emergence of non-F1 projects that teams are beginning to explore, often utilising their personnel to do so. For instance, Aston Martin's Chief Technical Officer Andrew Green recently migrated from his F1 role to the technology division of the company. This was followed by an incredible performance from the British team at the Bahrain Grand Prix. 

The budget cap has forced teams to juggle their workforce strategically to remain within the confines of the cap. Szafnauer fears that some teams may try to exploit this by employing their staff in non-F1 projects, thereby circumventing the cap's constraints without disclosing the costs involved. This would defeat the budget cap's purpose altogether and make a mockery of the rule. 

Szafnauer has called for measures to be put in place to address this potential loophole before it becomes an issue:

“It seems like more and more teams are looking at their well remunerated employees that way for cost cap reasons,” Szafnauer told the press after the race in Bahrain.

“And we’ve got to make sure that there comes a time where all these ancillary businesses that are now cropping up, that without a budget cap wouldn’t be there, we’ve got to look at that and make sure that the loopholes aren’t big enough to where, effectively, we don’t have a cap.

“Because I think the cap itself has helped Formula 1 as a whole, has driven valuations of the teams higher. I think the cap that we have now is still 10 times anything any other racing formula spends on going motor racing, and to me, that’s enough.

“And we have to really be careful that we don’t have these types of loopholes appearing that we can’t shut down. And then effectively we don’t have a budget cap because I think we’re all better off having it.

“When you look at corporate structures, that is massive, that can be, you can only have 68, 70 people in the racing team and the rest of the 900 are outside of it and are portioning costs. That’s the kind of stuff we have to worry about.”

Of course, something so invasive will be difficult for F1 and the FIA to pull off, and on top of this, it will be difficult to actually identify development specifically affecting the teams. Szafnauer isn't a stupid man, and completely understands that this will be almost impossible. But he still believes there should be more policing surrounding this:

“You have a great Formula 1 idea because you’re working on something else, how do you account for the stuff that you thought of when you’re working on something else?

“And that’s just an idea, but if you take that even further, it could be other things, you know, developing tools for example for both, but that tool that applies to Formula 1, and you’ve spent loads of investment on developing the tools, and then you marginally account for it in Formula 1.

“That’s the kind of stuff we have to start thinking about to stop.”