In response to trying to reduce crazy spending, Formula 1 will set up a working group to assess the possibility of introducing stricter financial controls on the salaries of the best-paid drivers and managers in the teams, annouced soon after Lewis Hamilton signs a record-breaking 1 year deal of over £40 million with Mercedes.
Hamilton signed a new contract with Mercedes for the 2021 season, the new deal makes him the highest-paid driver on the grid by some distance at an estimated £40 million, plus other additional bonuses and sponsorship deals.
In its quest to reduce costs, Formula One has introduced for the first time this season a capped budget of $145 million per team, while this figure will be reduced to $140 million in 2022 and $135 million in 2023, in stark contrast to the estimated driver salaries of Hamilton compared to the rest of the grid:
- Lewis Hamilton: Mercedes – Annual Salary £40m
- Max Verstappen: Red Bull – Annual Salary £18.2m
- Charles Leclerc: Ferrari – Annual Salary £10.19m
- Daniel Ricciardo: McLaren – Annual Salary £10.19m
- Carlos Sainz: Ferrari – Annual Salary £7.28m
At present, marketing costs, drivers’ salaries and the three largest salaries for team managers are not part of this capped budget.
On Thursday 11th February, the various stakeholders in Formula 1 (team managers, FIA and F1) met virtually during an F1 commission and discussed the introduction of a salary cap in the coming years for the highest paid drivers and executives.
“As 2021 sees the introduction of a cost cap for the first time in Formula One, various topics related to cost control and how the objective can be achieved in the coming years were presented at the meeting.”
“As part of this, a working group will be set up – including the drivers themselves – to discuss the contracts of the drivers and team managers. ”
So no action has yet been taken on this subject, but this working group, which will be set up later this year, will have to work to find a compromise to help further reduce the teams’ expenses during a Formula 1 season.