Formula One has been in turmoil over the budget cap this year. During Covid, the larger teams agreed to cut the spending limit from $170m to $140m for fear smaller teams might not make it through the pandemic. However, the cost of living global crisis which has seen Western countries suffering inflation rates approaching 10% has seen the bigger teams argue the cap should be increased. In the meantime, Fernando Alonso has ranted to the media over the issue of driver pay and its proposed new relationship with the budget cap.
Mercedes have already laid staff off and Ferrari stated they will breach the budget cap this year. There are certain team spend items outside the budget cap and one of those is driver salaries. The suggestions so far from the teams against any increase in the budget cap has focused on the bigger teams reducing the in season development budget.
However, the conversation is moving on. The latest suggestions include capping the amount the drivers earn to save money.
Lewis Hamilton last summer signed a new contract worth £80 million for the 2022/23 seasons.
Red Bull racing signed a title sponsorship deal with Oracle recently reportedly worth $500m over 5 years and accordingly Max Verstappen as world champion has seen his pay more than double to match Lewis’ £40m a year.
F1 drivers have traditionally required personal sponsors to even entertain a drive in Formula One unless they are extremely talented and arrive in the sport via a young driver programme route.
Yet not all the teams have external sponsors that cover the entirety of the drivers wages, so the argument proposed is by including the drivers in an inflated cost cap, more can trickle into team development from the sponsors.
Fernando Alonso has spoken out against any kind of driver salary cap.
“I don’t think it’s needed,” he said. “Drivers have been always outside this topic and I think the drivers, they are using us more and more to promote Formula 1.”
AS Racefans writes, “Alonso’s first season in Formula 1 was in 2001, when the calendar consisted of 17 races. This year 23 were planned. Alonso said the series is putting greater and greater demands on drivers’ time for publicity purposes.”
The Spanish double world champion concludes, “We do more and more events,” he said. “We are more in contact with the fans, the paddock. They are asking more and more from us and they are benefiting from that. So we should be outside of that cap.”
This argument is predicated on the notion that the F1 drivers are being fairly remunerated at present and compared to other global sports figures this may be true.
However, the sponsors who pay all or significant sums of the drivers’ wages also place demands on them to promote the sponsor’s own brand extensively. Best known of these is Tommy Hilfiger who promotes Lewis Hamilton.
So in reality it is questionable whether Alonso’s argument holds water as clearly the F1 drivers’ wages are not exclusively paid to promote F1.