Otmar Szafnauer warns of rivals ‘looking to exploit loopholes’ in the budget cap

Otmar Szafnauer thinks some of Formula 1’s bigger teams with their deep pockets are looking to “exploit” loopholes in the budget cap and “stuff more people under” it.

The 2023 season marks the third year under Formula 1’s budget cap, the teams limited to spending $135 million although an inflation correction will be added.

When the cap was first implemented in 2021, many of the teams had to say goodbye to staff members as they trimmed their salary budget in order to meet the cap.

It, however, doesn’t apply to all personnel with the salaries of the teams’ top-three earners exempt as are the drivers’ salaries.

But, according to Szafnauer, there are other ways to employ more staff members and keep them off the books.

“I think when everyone’s the right size, you lose that little bit,” Motorsport.com quotes the Alpine team boss as having said.

“I think what some of the other teams are now doing, the bigger teams, is they’re looking to exploit or have a better understanding of where there’s some loopholes or some organisational changes you can make to actually stuff more people under that budget cap.

“And we’re not there yet.

“They’re there already, they’re looking at, yeah, I got rid of 100 people, but now I want to hire them back. Because I was able to under that budget cap, find spots for them, where they either don’t count as a whole person or they do some marketing stuff or whatever it is, or they work on a boat for some of the time.

“And we’re not quite there yet. So I think that advantage of being right at the beginning does dissipate.”

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The 58-year-old revealed Alpine have also created a department outside of their Formula 1 operation, but insists his team’s operation is “not” to hide people away from the budget cap.

After all, it only comprises “two people”.

“We’ve started that,” he added. “We have a group, but it’s tiny, like two people. We’re building a ski brace, there’s three projects on the go, including parts for the Alpine car.

“We don’t use our design resource. We use some of our manufacturing resource to make components like the Alpine rear wing, some CFD work is done, some laminating work is done, but not much. And then external companies come in for design help.

“We had some people that were retiring. And we could use them to help the Alpine car. So that’s what we did. We didn’t establish it to be able to stuff people in there from a budget cap perspective.

“It exists, but like I said, we have two people, not hundreds.”

Yet another grey area in Formula 1’s regulations

Never let it be said that Formula 1 can write a clear set of black-and-white regulations. That, the years have highlighted, is beyond the sport’s capabilities.

Last season there was speculation that some teams were flexing their floors more than the allowed 2mms, the teams said to be exploiting a grey area in the regulations relating to the area in front of the barge boards. Aston Martin also got away with an innovative, but against-the-spirit-of-the-rules, rear wing in the second half of the season.

The FIA took steps to close the flexi floor loophole at the Belgian Grand Prix and as of 2023 Aston Martin’s rear wing is banned.

In a sport that pays some of the brightest minds to find loopholes, it’s no wonder the teams have done just that with the budget cap.

Last year as Red Bull’s cost cap saga played out it was speculated that design guru Adrian Newey’s salary had been one of the sticking points with Red Bull paying him as a contractor, and therefore outside the cap, when he was in fact the brilliance behind their bounce-free RB18.

As long as Formula 1 has rules that are open to interpretation the teams will interpret. This is after a big-bucks sport, no one remembers who comes second.