Bring champagne to a simmer in a saucepan over medium-high heat. Reduce to medium/medium-low and simmer until reduced to ¾ cup, about 25 to 30 minutes. You can check to see how much the liquid has reduced by pouring into a glass measuring cup. If it needs to be reduced some more, pour it back into the pot and continue simmering.
Let the reduction cool completely before using.
To make the cupcakes
Preheat oven to 350°F. Line two cupcake pans with paper liners.
In a large bowl, Whisk together all-purpose flour, baking powder, salt, and sugar.
Add eggs, oil, cake flavoring, milk, and ⅓ cup champagne reduction. Mix on medium speed with an electric mixer until all ingredients are incorporated, 1 to 2 minutes..
Spoon batter into cupcake liners, filling about ⅔ full.
Bake for 15 to 17 minutes, or until cakes are golden brown and set in the center. (Test by inserting a toothpick into the center of a cupcake. If it comes out clean, they're done!)
Let cupcakes cool in pans for 10 minutes before transferring to a wire rack to cool completely.
When cupcakes are cool, brush additional champagne reduction over the tops and let it dry before frosting.
To make the frosting
Cream butter on medium-high speed with an electric mixer. Add shortening and cream. Mix until smooth and creamy.
Add the champagne reduction and half of powdered sugar; mix until well blended. Repeat with second half of powdered sugar, and mix for 1 minute.
Pipe frosting onto the cooled cupcakes and decorate with festive sprinkles!
Store cupcakes in an air-tight container at room temperature.