Drivers, Circuit de Catalunya

Should Formula 1 limit how much teams can pay drivers?

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Formula 1 has agreed to reduce the cap on how much teams can spend next season from $175 million to $145 million.

The cap, which is being introduced for the first time next year, with fall in subsequent seasons, reaching $135 million in 2023.

However there are several exemptions to the cap, one of the most significant of which is driver salaries. Several drivers earn eight-figure sums which, from next year and increasingly so in subsequent seasons, will make up a considerable chunk of their spending.

Our earlier analysis indicated F1 driver salaries in 2020 top out at an eye-watering $40 million. So should driver pay remain exempt from the cap, or if it time they were limited too?

For

Salary caps are commonly used in other sports to keep spending under control. In F1, where the top teams are easily able to out-spend their smaller rivals, introducing one could obviously make a positive difference.

It would make good ‘optics’, too; it would be easier for manufacturers to justify a Formula 1 programme to their boards at a time of belt-tightening if the headline-grabbing drivers’ feed are limited.

Against

A driver salary cap would lead to all the top drivers being paid roughly the same amount, so you could say goodbye to teams luring drivers away from rivals with the promise of a fat pay day.

Some have questioned whether the incoming budget cap can be enforced and many would have the same reservations about a drivers salary cap. For example, what’s to stop a team’s sponsor paying a chunk of a driver’s retainer, as many have in the past?

I say

I remain doubtful about how easily the budget cap can be enforced. It would come as no surprise if we spend the next few years mired in innuendo over which team has or hasn’t over-spent.

But a driver salary cap might actually be easier to enforce than a team budget cap. Checking how much a driver has earned from a team, sponsor or wherever, could prove easier to tell than whether, for example, a manufacturer has used its road car research and development programme to assist its F1 team without the numbers showing up on a balance sheet.

That said, while drivers’ telephone number-sized salaries are always a matter of interest, I’m not convinced capping them would actually level the playing field that much.

As a matter of principle, I’m not keen on the idea. Those who perform the best should have to chance to extract a higher price. And anyway, I suspect the economic situation is going to force a downward pressure on driver salaries soon.



You say

Should Formula 1 introduce a driver salary cap? Cast your vote below and have your say in the comments.

Do you agree Formula 1 should introduce a driver salary cap?

  • Strongly agree (19%)
  • Slightly agree (12%)
  • Neither agree nor disagree (3%)
  • Slightly disagree (21%)
  • Strongly disagree (43%)
  • No opinion (1%)

Total Voters: 155

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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  • 52 comments on “Should Formula 1 limit how much teams can pay drivers?”

    1. As much as we tend to focus on them, drivers are a relatively small part of the power imbalance and lack of sustainability of Formula One. Sure, an elite driver can take a car to places beyond its “natural position”, but that ability has its limits and those are reached surprisingly fast. There is little to be gained from capping them, aside from optics, but a) F1 isn’t a good look in those terms anyway and b) the reduced willingness to spend much above the cap by all manufacturers not named Ferrari as a result of this economic crisis will throttle driver salaries a bit already.

    2. A driver salary cap serves no ‘leveling playing field ‘ purpose whatsoever.

      Neither do I think there is a strong call from fans for F1 to become a strong advocate for economic socialism; there are other social issues which are more urgent now where F1 can make a difference.

      1. @coldfly
        I disagree. Teams would use the drivers’ salaries as a loophole. They’d pay them more officially, only to get it back from them and spend it on car development. Thus they’d out-spend the budget cap.

        This has nothing to do with economic socialism. It’s about keeping costs under control.

        1. ?? and again ??, @srga91.

          Why first pay your driver, then get it back, and then spend it on the car. If a team wants to fraudulently spend more than the budget cap allows, then there are simpler, and less risky ways of doing it.
          It’s not a loophole, it’s breaking the rules/fraud.

          1. @coldfly Agree with you on both comments you made here and the one below, and voted strongly disagree for the poll.

      2. @coldfly In reality though, if all cars were equal, having Hamilton on your team would be the only way of winning the championships.

        It’s the same problem with football really. Where the richer teams can buy all the top players and become pretty much unbeatable that way.

    3. Darran Donald
      7th June 2020, 11:51

      Driver caps and the free spend on the top 3 team memeber is stupid. Put the budget cap up a bit higher and include driver and all team personnel in that window. Make teams decide if you want to pay big for a Verstappen or Hamilton or focus on the cars. I’m at a loss as to why the drivers wages are not included in the cap when there pretty much the only single team member that can boost there own earnings with sponsorship.

      1. Put the budget cap up a bit higher and include driver and all team personnel in that window. Make teams decide if you want to pay big for a Verstappen or Hamilton

        The (unwanted) consequence would be that if you have to increase to drivers salary to retain them that you have reduced pay or numbers of your staff.
        That feels wrong.

        1. But that’s exactly why it is right to include all salaries inside the budget cap.

          Is the driver really worth sacking 50 other staff for?
          Can one high-profile lead designer provide better value than 30 engineers and aerodynamicists?
          Which is the better investment for the team?

          The teams should be making these decisions/compromises, because F1 is a team sport. Right?

          Once the novelty wears off from having a star driver, teams would probably be more interested in investing their resources in the car than the one team member who sits in it and does what they’re told.
          And when their car is the fastest, the best drivers would be lining up at their door wanting to drive it for reduced pay just so they can be champion.

          1. S I think you are contradicting yourself. You have boiled drivers down to being ‘the one team member that sits in it and does what they’re told.’ If that’s all they are then why would a team care about the best drivers lining up? If they are just sitting there doing what they are told I guess we can do away with the concept of F1 having the greatest drivers in the world, and we can also forget the ongoing debate about Goats and whatnot? After all, the novelty just wears of anyway, right?

            I think you have solidified the argument as to why drivers’ salaries should not be included in the budget cap, and indeed why they have not been.

            1. Do you really believe that the drivers in F1 are actually the 20 best racing drivers in the world?

              I certainly don’t.

              As to greatest of all time or whatever – no one can ever measure such a thing.

            2. S No I don’t and that’s the point. Some have paid to be there and some are there because some teams cannot afford better. Limiting how much a team could pay for drivers would only ensure a continuation of that as opposed to a propped up and improved F1 being able to collectively have a much stronger grid overall by having all teams able to compete for the best drivers in the world rather than settling.

            3. If a driver wishes to be World Drivers Champion, there’s only one way to do that – accept a place in a top F1 team which may pay less than they might get from a team with a slower car.
              Given the choice, most drivers would choose to take a pay cut in order to achieve something that the most egotistical and self-centered drivers won’t. Money or championship.

              To suggest that any driver needs to be paid more just to compete in F1 does a massive disservice to the sport. If it doesn’t pay enough it isn’t attractive anymore?

      2. I think this is by far the most reasonable way, the team has a lump of money, and they can spend it how they want. Either for the best drivers, the most car development, the best engineers, the best coffee, nicest HQ or whatever they think will give the best bang for the buck.

    4. Voted for “no opinion”, as I don’t really have strong feelings either way.

      If there was a salary cap, I can see various sponsorship agreements coming into play to try to find loopholes in the regulations: team pays driver X amount, the sponsors the rest, and what can the FIA or anyone do to stop someone if they hire a driver to do PR work for a few days for a salary of 10m.

      1. Exactly this, what constitutes a drivers wage? Sponsorship and endorsements have always been a big part of this. Limit a wage from the team and the rest will still get paid one way or another by increasingly hidden methods.

        1. Precisely why including the drivers in any financial cap or allocation won’t work.
          If I recall, back a few (too many) years ago, Ferrari indicated that they didn’t pay Michael Schumacher, his salary was paid by Shell. Something on the order of $20 million.
          Yes, there are ways to include these payments, but likely there are even more ways to move it outside the budget cap.

    5. Driver salaries are possible to be managed if the teams draw the line, in an informal agreement. Yes, there are drivers and there are drivers but no driver can get more than 100% of what that car is capable of. If Mercedes for example said that they would not pay their No.1 driver one $ over, say $20M then so be it. He would either have to accept or look for another team but then that would be paddock gossip very soon and other teams would know. There is nothing to stop them, if questioned, to simply say that it was a financial decision to not renew. That would then encourage other drivers to apply and, if the car is good enough, to accept less just to get into it. Whilst i fully endorse market freedom and push pull economics i just don’t believe that any driver is worth US$60M PA.

      1. And if for example Red Bull pays Max 15 milion there are no rules for Dietrich Mateschitz paying Max 30 million from his own pocket. So this is a rule for just to make a rule.

    6. No doubt about it!

    7. If one is for a cost cap that limits teams expenses, then it’s obvious that it should be to all the big costs, I can’t fathom how it could be any other way.

      1. @balue The aim is to get the cars on the same level. So giving all teams the same amount to spend on their cars is a all that’s needed for that.

        I cannot fathom how money spend on marketing, or drivers is related to that.

        1. @f1osaurus You do realize that teams operate to a budget, and that even with the cost cap there will be huge gaps between the have and have nots? It’s like you believe teams now will have money left over to spend on drivers.

          1. @balue Irrelevant.

            1. @f1osaurus To say it’s irrelevant to the idea of cost cap that teams will have more to spend on car development is irrational.

            2. @f1osaurus The budget cap is designed for leveling car development budgets. Period.

              You can try dragging irrelevant nonsense into the discussion, but that would be … irrelevant. I cannot fathom the point of wasting time on that. Pretense maybe? Nah why bother.

    8. It’s all about the tenths. As Ron Dennis (I guess…) said once: “Senna is the cheapest 0.5sec in F1”, meaning that the cost to engineer and develop a car to gain those 5 tenths was much higher than paying Senna to drive a subpar car while achieving the same results. In ’93 Senna was making $1mi per race plus bonuses to drive a one-horsed chariot and manage to keep Prost and Adrian Newey’s incredible fast Williams honest to the very last race, winning some of them along the way.
      That said, I think drivers salary should be part of the budget, because it affects both the performance and the bottom line.
      But I believe that is impossible to control, due to personal sponsors and other benefits of the package.

      1. Its not just speed, the best drivers should be defined as the ones who make the least number of mistakes. That is where the huge gap between a Hamilton and a Vettel resides.

    9. This urge to control every aspect of the sport, and in doing so level it down, will kill F1 as sure as it killed the Soviet Union and the Marxism in the Chinese communist party.

      F1 does not live in isolation – it is in global competition for the best managers, engineers, drivers.

      Do you think that if Hamilton said “That’s it, I want to be off to IndyCar” a scrum wouldn’t wave a cheque book at him offering the same salary as he gets now with them all shouting over one another,” Me,me. Sign with me!”?

      Do you think Toto Wolff and James Allison would stick around if they couldn’t get at least the rewards offered elsewhere? Do you think Red Bull would even run one team if there was no glamour, no pazzazz.

      The greying out of F1 would generate an exodus from the sport which would rival the flood of boat people fleeing socialist Cuba. And we would have a wonderful Trabant festival instead of fun, glamour and racing, watching the best struggle to win, through skill, imagination, innovation, talent and grit to do so.

      1. So F1 should attract not just corporations, but individuals who are primarily motivated by greed and wealth?

        If they love F1 enough and want to succeed in it, they’d stay there on 1/10th of the pay. The ones who should be in F1 are the ones who want it the most.
        Higher pay will not make them more passionate.

      2. I’m getting a brain freeze from the hyperbole… ouch…. But I will say that the Chinese seem to be doing OK.

    10. I voted for slightly agree because for the sake of consistency they should be, but I also agree with your opinion.

    11. “Checking how much a driver has earned from a team, sponsor or wherever, could prove easier to tell”

      That would be naive to believe. Most drivers probably bring their revenue already into a purposely made company for tax optimisation. Drivers can create and use the same structures as the team. Tracking revenue can be made extremely difficult. The only worry for the driver would be the liquidity of the financial assets.

    12. If the sponsorship is separate it becomes a nonsense, and if sponsorship is included we have the likes of Bottas on $10 million and Ham paying (through his sponsors) to drive. The Hilfiger contract alone is worth something like $45 million to Mercedes.
      It all becomes a nonsense when you have someone like a Senna, Schumacher or Hamilton that transcends the sport. They know their worth; and more importantly F1 know what they are worth to the sport.

    13. Michael (@freelittlebirds)
      7th June 2020, 14:36

      F1 is slightly different from other sports like soccer, football, and basketball which have entire teams of players with deep benches. There are only 20 spots for all of F1. Sadly many drivers actually have to pay to get a seat in F1.

      So there should be no cap in salaries. In fact, if anything, the question should be whether F1 drivers should have to pay to drive in the sport.

      I think they shouldn’t have to.

      1. @freelittlebirds Agreed. Let’s recall that many have discussed over the years that an F1 that has drivers needing to pay for their ride is an F1 that does not have the top 20 drivers in the world, or at least not the 20 of the best quality they could have. Of course we know this has been largely because of what has evolved over the years into a necessity for survival for some teams as opposed to what used to be more of a voluntary idea. And yes of course drivers have always brought sponsors with them. But yeah, hopefully what evolves next with budget caps and better money distribution amongst the teams, along with the expectation of a better product on the track and therefore a resurgence in audience and sponsors, will be a removal of the necessity for lesser teams to take on lesser drivers with big chequebooks.

    14. No. The cap is already causing job losses. As expected teams will do whatever suits them best, and not what the rule makers intended. Stop making more rules, since the top teams approve the rules, continuing this way is like handing the whistle to lionel messi.

    15. Or we could limit the amount of money F1 investors can take out the sport. Or is it only those on the front line who should do it on the cheap as its their passion?

      1. ecclesshekels
        8th June 2020, 4:56

        He probably won’t give his bit back and I think the bankers have spent theirs.

    16. They should be limit of drivers wage, how many millions does a driver need
      Avg team wage + 10%

    17. There should be system where drivers compete against each other in exactly same cars to pass “Mature exam”. No matter how much money your dad has and is able to invest. The group of the best has green card, the rest has to learn and practice but as long as they are too slow this shall happen outside F1.

      1. That’s all good, but pay drivers are often a necessity for some teams in F1, as they simply cannot survive without the income associated with the pay driver. I very much doubt Williams would have signed Stroll or Latifi over a more capable driver if they were able to.

    18. I agree there should be a way for limiting crazy spending on F1 drivers.

      No way Lewis does 150 million worth of work, for sure he would be just fine at 100 for a few years. What is the point of all this craziness?

      But not limit it totally, more of a soft cap like some sports, where beyond some point teams pay a penalty for paying their driver to much.

      1. But he did for more for his money than Daniel for £50m for his two years, but was Renault’s fault.

        But I like the idea of a soft cap. Yes you can pay £50m to your driver for one year, but we’ll take £10m off your budget.

        Any cap will be a nightmare to track for the FIA and this would make it even worse, but pay caps means seeing more of driver A being plastered everywhere selling me crap and I don’t want that either.

    19. I voted disagree. My main thought was that a cap on driver salaries might draw the top talent away to other driving series. This is especially true if you’re not currently in the dominant team – why take a lower salary in F1 if you are unlikely to win a championship in the near future when you could maybe earn $5-10m or more extra driving in Indycar for example? (I have no idea how funding is in other categories so don’t really have an idea which other series might be able to outbid a capped F1 salary)

    20. I voted no opinion.

      As many have said, a lot of drivers bring sponsorship money to the teams, which pays them. This is not new of course, it the days of big tobacco filling the coffers up and down the grid, a lot of drivers were paid by the tobacco companies. So how will it work? If Team A decides to pat Driver Y a million dollars per year, but the sponsors pays him 20 million a year. I’m not saying it will happen, but why can’t it happen? I’m sure a fair few drivers will already have similar arrangements.

      This whole budget cap thing as whole is going to be a nightmare to police, probably end up wasting too much time and energy auditing the teams. Am I against the budget cap? No. In principle, its great, but in reality, F1 teams have been known to find every loop hole in whatever rules or regulation for the sake of competitiveness. Perhaps all the front running teams have suddenly grown a conscience?

      How will teams with manufacturer or parent company backing be audited? Will Red Bull Technologies be held to the same standard of audit as the F1 team? How will Ferrari be audited considering that their race team and car factory are one business? I’m no financial expert, but if I’ve learned one thing in the last 10 or so year is that anything financial can be manipulated (quite easily at that).

      Is a budget cap required? Yes, but once again, I’m not sure if the current approach is a right one. A franchise approach may be better, easier said than done though!

    21. There is another way of looking at this. Is F1 really a team sport? Well. not really as there are two world championships. Maybe the entire concept needs to be refined and instead of having a WCC and a WDC just combine and have a WC. That would then mean that both drivers would need to drive for the team and not necessarily for themselves. It would mean that, if for example, Ferrari won then both drivers are WC’s. That would then eliminate, to a large extent, the ridiculous salaries paid to individuals as both drivers would be equally motivated to win for the team and then for their own glory in winning. The fact that no driver can win a WC without a race winning car to sit in. That fact alone should determine what salaries are paid.

      1. And they can all drive two seat Minardi’s – brakes from front, steer from rear & two accelerators!

      2. I have to disagree with Kenji. Its about incentive. Drivers are in the sport (f1) between 5 and 10 years some even less. They are risking their lives by driving at extreme speeds no meer mortal can hope to do. Yes we love the cars but the drivers make the car aswell. They add the human part to an otherwise mechanical machine. Would you pay to watch a printer? No we watch f1 to see who is the best driver in the best machine. No driver then whats the point? Theres no element of danger if the driver is missing. Theres no in your face achievement. (im not belitteling the work of engineers, mechanics and designers)

    22. No. If you put a limit on the most ultimate motorsport in the world, then it’s not that ultimate. But then, it appears that’s where they have been heading for a while now.

    23. For me, it’s not about having a driver salary cap but the drivers salary should be incorporated into the teams budget cap and let them decide whether they want to spend that money on Lewis Hamilton at the cost of car development or hire George Russell and build a better car.
      Same with marketing – VW camper/car development or expensive motorhome/compromised car dev.

      Too many loopholes & clauses in the budget cap for my liking.

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