#F1 Features: Generation Game: Pay Drivers & Financial Bias

Brought to you by TheJudge13 contributor Jacktheblob

Editor’s note: ‘The Generation Game’ is a series of articles exploring the issues facing F1 in the modern age, with a secondary focus on attracting the next generation of fans. The series is authored by Jacktheblob, a university student and F1 enthusiast.

It’s that time of year again when speculation about driver transfers starts to increase, and for some, the teams will be looking not just at a driver’s quality, but also his wallet. This week The Generation Game reflects on the proliferation of pay drivers and the image this presents to the world.

Traditionally, Formula 1 drivers have been people to look up to, even idols for millions of people. Some drivers still are… But many are not. The abundance of pay drivers on the grid has rather diluted the sense of wonder and respect that drivers commanded in the past. Now, it seems, there is rather more attention on the ‘pay’ and not enough on the ‘driver’.

Chilton Lewis Hamilton made a point of comparing his background to that of Nico Rosberg’s, although in reality most of the F1 grid comes from a privileged background. Thankfully, pay drivers generally seem unable to hang onto a seat for too long. Names like Karthikeyan, Pic, and Petrov no longer feature at race weekends… Perhaps someone should warn Super Max that slow and steady DOESN’T win the race?

There are many teams that clearly need the funds that pay drivers bring, and the on-going fiasco at Marussia is a very visible example of this. Over at Caterham, Lotterer and Merhi bought a ride in the green rollercoaster and both were significantly quicker than Ericsson. What does this say about the calibre of the drivers at the back of the grid?

Martin Brundle commented, “There’s no doubt that the pay drivers are creeping their way up the grid. But they’re still great racing drivers. Don’t think anybody who’s paid to be there is not a high-level racing driver.” [AUTOSPORT] Hmm… Here’s a “high-level racing driver” in Valencia in 2012: (image)

Pastor MaldonadoOf course, pay drivers have long been a part of the sport, with great names like Niki Lauda initially having to pay for their drives. However, the current situation is unacceptable. The amount of pay drivers on the grid is dangerously close to overwhelming the drivers that are there on merit. At this point many readers will no doubt be thinking that it is the sport’s financial model that is the problem, and pay drivers have become a necessary evil in order for a team to survive.

In 2012, Otmar Szafnauer of Force India observed, “you may be better off with a pay driver who can bring sponsorship money which in turn can improve the performance of the car. Teams ultimately want to improve their overall performance and sometimes they can do that better with a driver who brings money more than with a better driver with no sponsorship.” [GUARDIAN] It is truly a sorry state of affairs when a driver’s worth is measured more in terms of money than ability. There would appear to be two solutions to this problem – either Formula 1 becomes a spec series, or the money has to be shared more fairly amongst the teams. The current situation that sees Ferrari awarded millions of dollars just for gracing the grid with their presence is ridiculous. No other sport has such a blatantly unfair allocation of funds.

In fact, the current arrangement is dangerously close to falling foul of EU competition laws. The European Commission website states:

“EU competition law covers antitrust, mergers and state aid. Most sport cases have been handled under EU antitrust rules, which prohibit anti-competitive agreements and practices as well as abuse of a dominant position. These cases concerned revenue-generating activities connected with sport, such as media rights and ticket sales and regulatory/organisational aspects of sport.”

The F1 Strategy Group is the main target of competition law as the 5 permanent member teams have much greater influence than their competitors, most notably regarding the push for a cost cap. What better example of an “anti-competitive practice as well as abuse of a dominant position” than giving the wealthiest teams control over a potential cost cap that they will inevitably refuse in order to maintain their advantageous position? On April 10th this year Marussia, Caterham, Sauber and Force India complained to Todt stating, “We believe that the actions of the F1 Strategy Group and its acceptance by the FIA and the CRH… brings into question the very basis of some of the rules of competition that are being relied upon by the sport.” This statement makes EU involvement seem like a real possibility, especially if over a third of the grid continues to feel unfairly treated. Were the EU to get involved then Ferrari’s preferential status could well be removed in the restructuring process.

F1’s financial model is clearly broken, and strong leadership will be required to fix it. Fortunately, other sports have shown that it is possible to implement a sustainable and fair business model.

Michel PlatiniIn 2011 UEFA introduced the Financial Fair Play Regulations in a bid to control the spiralling debt of many European football clubs and create a level playing field. Prior to this action, many clubs had adopted a philosophy of massively overspending for 3-4 seasons in a bid to secure promotion to a higher league and the associated increase in revenue. Once the extra money was secured, it would be used to pay off the resulting mound of debt; a situation not dissimilar to F1 teams fighting for Championship prize money. Unfortunately the gamble didn’t always pay off, and in 2010 Portsmouth football club were forced into administration. In F1, Caterham are seemingly on the brink of collapse after 4 unproductive years in the sport. But whilst change will most likely come too late for Caterham, perhaps the other teams can take heart. For if the biggest sport in the world can enforce spending controls, surely F1 can do the same?

Kvyat and MaldonadoThe financial mess that is Formula 1 needs to be overhauled as soon as possible, for it is not just the teams that are suffering. The sport’s reputation is also being damaged by the spread of pay drivers. The announcement that Verstappen will drive next year prompted a predominantly negative response from F1 fans, drivers and designers alike, with claims that he will ruin F1’s credibility as the pinnacle of motorsport. Yet there are drivers on the grid today who are already tarnishing F1’s reputation and they do not face such harsh rhetoric. Is a talented teenage driver really so much worse than a mediocre 29 year old pay driver?

To an outsider, the teenage driver clearly makes F1 look like an easy sport in a way that a pay driver does not. But this is because there is perception, and then there is reality. Those with no knowledge of pay drivers would naturally perceive Verstappen as proof that F1 is ‘too easy’. But in reality, could the same conclusion not be drawn from the fact that all a driver needs to secure a seat at a small team is cash and a super licence?

Fortunately, the pay driver problem only becomes apparent once a viewer has already taken an interest in F1 – hopefully to the point at which they will continue to watch regardless. But the younger audience can be a fickle bunch, and discovering that many drivers owe more to their sponsors than their skill is likely to drive young people towards other sports where talent is paramount – after all, a poor footballer can hardly claim his subpar performance was the ball’s fault. With image and appearance being of ever increasing importance in the age of the selfie, pay drivers are an unfortunate stain on F1’s record. However, F1 has more visible problems that contribute much more to the struggle to attract new fans.

No doubt it will be many years before F1’s financial bias is addressed, and so pay drivers will remain a feature for the foreseeable future. (Side note – the average life expectancy of a male born in Suffolk is 81). But F1 should hope that the general public remains blissfully ignorant about pay drivers, because if the truth behind their rise to the top level of motorsport becomes common knowledge, then F1 will face a credibility issue far worse than it does today.

Next week The Generation Game will examine the rise of the teenage driver and ask if F1 has really become ‘too easy’.

16 responses to “#F1 Features: Generation Game: Pay Drivers & Financial Bias

  1. Hi Jack – nice article, as usual…
    One thing you fail to mention (observation, not criticism) is that ‘pay-drivers’ have always existed… the main difference being that in the past a rich driver (regardless of where the money came from) could buy, or rent, a car from an existing constructor. Also costs were so much lower it wasn’t impossible for a rich guy to even build his own car.
    They both had fun, until the money ran out, or until they were taken up by a bigger team.
    Now neither option exists – you can’t buy a car, and you can’t construct your own without ‘permission’.

    I don’t understand why the talk is mainly towards instead having a ‘spec.’ series. Just allow those manufacturers who want to, to sell or rent their cars.
    I would expect ‘young rich kids’ (no disrespect) to prefer to put their money on a one-off full race drive, than simply hand over huge bags of money for for the dubious honour of an occasional FP1 appearance – for half an hour…
    And anyone would prefer a race entry over spending hours and hours on a simulator, however much might be learnt in the process…
    What newcomers want is races…!

    • @BlackJackFan
      If the rich kids were allowed to buy a full race drive, do you think this would see a revival of the DNQ rule? This season all the established drivers have been allowed to start regardless of their qualifying time, but would joyriders be afforded such generosity?
      Thanks for commenting 🙂

      • I wasn’t thinking of ‘joyriders’…
        I was thinking of all the poor guys who have brought millions to the sport in the past twenty years mostly for the so-called privilege of the occasional half hour in FP1, once or twice a year. Some of them pay over 10M Euros for this – and for what…?
        In 1994 14 teams provided drives for 52 drivers at various times during the year. Many of them didn’t get vary far in F1 but at least they had their chance, and were able to bow out having established something.
        In 1974 there were 30 teams, 13 of whom bought cars from other constructors, and employed 20 drivers, including: Leo Kinnunen, James Hunt, Ian Scheckter, Howden Ganley, Graham Hill, Guy Edwards, Peter Gethin, Rolf Stommelen, John Watson, Carlos Pace, Carlo Facetti, Helmuth Koinigg, Gerard Larrouse, Ian Ashley, and Lella Lombardi… all driving for non-works teams, in bought cars.
        There were also 8 smaller, almost private constructors: Frank Williams Racing, Ensign, Trojan, Maki, Amon, Lyncar, Token, Parnelli, and Penske…
        Under current regulations none of these drivers or teams would be allowed to enter.
        Finally, to belatedly answer your question, by all means have pre-qualifying if there are too many entries, for safety reasons – the numbers will sort themselves out by natural selection – instead of by regulations…

  2. Nice article, Jack. Though I would look higher up the food chain to the initial sale of commercial rights for 100 million for a hundred years as being the source of all evil currently. Proper revenue sharing would go a long way but another thing to consider is how few teams have a proper stake in the long term health and viability of the sport. Solving the issue of properly financing the teams would go a long way towards improving the sport, no doubt.

  3. To some extent they are all pay drivers. Even Lewis Hamilton talks about how he was bought a kart when he was 5 or 6. That is already elitist. It’s not like there was karting in school and he was spotted. He payed a price to enter motor racing that many families couldn’t have paid.
    So for me Max Chilton is just the extreme end of that. All F1 drivers are privileged guys. Lewis would probably have been the rich kids in many of our social groups.

  4. They are ALL pay drivers. Look at the amount schumi had to pay in the beginning. Look at the amount of sponsors massa brought to Williams. Even alonso gets the help of Santander. ..

  5. “Mirror signal, Maldonado” Haha that did make me chuckle!
    I would like to say though I don’t that UEFA’s financial fair play is a good comparison to be honest. As PSG have proved it doesn’t really matter. If you’ve got enough money you can just pay the fine and carry on as you were. See spending £50 million on David Luiz. A cynic would say it’s just a ploy for UEFA to line their coffers even more, not really in the interest of a level playing field for all.
    Other than that I enjoyed the article, good work.

    • Perhaps if somebody pitched the idea of a cost cap to Bernie as a way to line the coffers even more then they might actually get somewhere with it… 😉

      • In that scenario, Bernie would use the cost cut indeed as a way to say “you don’t need any more money than 49% of the turnover… or now, even less!” :p

  6. F1 really needs to switch to a Premier League funding model, which would probably allow more jobs in F1 as well. If the pressure on driver ‘sponsorships’ eased, we would see a grid with Frijns on it for example rather than Ericsson – the lower teams would finally be able to pick drivers on pace and fight for the odd point with both drivers.

    • Do you know the Mazda ladder to Indy. Winners at each level are hooked up with sponsors at the next. Theoretically you could start out with enough money to go to racing school and wind up in an Indy Car. F1 could definitely use something like that.

  7. Interesting comment by Force India’s Otmar Szafnauer… “you may be better off with a pay driver who can bring sponsorship money which in turn can improve the performance of the car. Teams ultimately want to improve their overall performance and sometimes they can do that better with a driver who brings money more than with a better driver with no sponsorship.”

    I guess that brings into question who is more important in the team, the driver or the engineers? And, will we see salaries such as $20 odd million being paid to drivers? Is this perhaps why Hamilton’s contract negotiations has stalled? Merc things they can build a car that anyone can win in so they don’t need a guy like Hamilton…

  8. a long time ago i watched a movie of Fangio in which pretty much of the economics of F1 get very clear (past and present). i recommend the op to get a copy of the film, a notebook, to pay attention and to get real. f1 is not the invention of the gods. like someone said before at one time they are all pay drivers

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