Alpine boss reveals major F1 loophole that teams might exploit due to budget cap restrictions

Alpine F1 team principal Otmar Szafnauer mentioned that the sport needed to be careful as the teams might use a very clever loophole in the budget cap that might affect the remuneration of employees.

The budget cap was introduced in 2021 to limit the spending of the big teams and bring the field closer in terms of money spent on developing the cars in-between seasons. F1 teams must balance their financial structures carefully. This might mean moving some employees away from the racetrack and enforcing cost-cutting measures to stay under the budget cap.

Speaking to PlanetF1, Szafnauer stated:

“It seems like more and more teams are looking at their well-remunerated employees that way for cost cap reasons. 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 and 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. 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."

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"That’s the kind of stuff we have to start thinking about to stop” - Alpine F1 team boss

The American mentioned that the FIA and the sport have to carefully police when teams start to develop some F1- related ideas. This may not come under the regulations of the budget cap but will significantly help the team in developing their cars.

He said:

“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.”

This is certainly an interesting issue raised by the Alpine F1 boss and hopefully, the FIA will look to eliminate any possible loopholes in the budget cap.