Alpine Formula 1 team principal Otmar Szafnauer has warned teams could exploit a “loophole” to carry out development work outside the sport’s budget cap.
The budget cap was introduced in 2021 and teams were judged on their compliance with it for the first time last year. They are required to submit reports on their spending during 2022 by the end of this month.
Last year F1 teams took months to agree a deal to increase the cap in response to rising inflation. Alpine was one of the teams which opposed those changes, and Szafnauer believes the differences in how teams are structured has the potential to seriously undermine the intention behind the cap, which was to prevent some teams out-spending their rivals.
“All those inflation bonus things, although we vetoed them, I think those are marginally adding to the cap, not massively,” he told media including RaceFans. “But when you look at corporate structures, that is massive.
“If you only have 68, 70 people in the racing team and the rest of the 900 are outside of it and apportioning costs, that’s the kind of stuff we have to worry about.”
Some teams have dedicated technology divisions where they apply developments from their F1 programme to other industries. Szafnauer is concerned about how any transfer of knowledge back from those divisions to an F1 operation is treated within the cap.
“If you have a great F1 idea because you’re working on something else, how do you account for the stuff that you thought of when you were working on something else? That’s just an idea.
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“But if you take that even further, it could be other things. Developing tools, for example, for a boat, but that tool then applies to F1 and you’ve spent loads of investment on developing the tool and then you largely account for it in F1.
“That’s the kind of stuff we have to start thinking about to stop. And that’s much bigger than just the inflationary stuff.”
Top technical staff from some teams have been relocated to divisions which are separate from their F1 programmes.
“It seems like more and more people or teams are looking at their well-remunerated employees that way, again for cost cap reasons,” said Szafnauer. “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.”
Szafnauer believes F1’s budget cap has been a success for the series and is concerned it could be undermined.
“I think the cap itself has helped F1 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.
“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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