Lewis Hamilton, Mercedes, Red Bull Ring, 2020

Driver salary cap mustn’t force “superstars” out of F1 – Wolff

2020 F1 season

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Mercedes team principal Toto Wolff supports the idea of introducing a cap on drivers’ salaries but warns it mustn’t risk losing “superstars” from Formula 1.

Next year, Formula 1 teams will limited to a maximum budget of $145 million. The cap will be reduced over the next two seasons but some major expenses will be exempt, including drivers’ salaries.

The possibility of capping drivers’ salaries has also been discussed. “The salary cap is something that we have supported,” said Wolff.

“I believe, similar to the leagues in the US, if you cap the team at 145 million [dollars] with a downward slope, you need to at a certain stage also cap high salaries. But I don’t think we should we should lose the superstars of today. So what we have proposed is to gradually come in with a cap.

“We don’t want to lose the superstars out of this sport. So it needs to be a gradual introduction from 2024 onwards so that the future generations of drivers end up on a more sensible level in considering that we have a cost cap on the team.”

Limiting drivers’ salaries “would be good for the sport”, Wolff believes.

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“They need to be inspirational, the drivers. And as you can see in the US, the top football players and the top basketball players are still very inspirational.

Drivers, Circuit de Catalunya
How much are F1 drivers earning in 2020 – and should their pay be capped?
“I think high salaries is what they deserve because they are global superstars and they are the best of the league. But I think it should not end up in up in an ratio salary of an individual compared to the team cap that over certain time is going to create controversy that is not needed.”

Wolff’s driver Lewis Hamilton is believed to receive the biggest pay cheque of all the drivers. He rejected recent media reports claiming they are at odds over his fee for next season.

“All the things that are out there about contract negotiations, whether him demanding a hilariously high salary or me saying it’s only 50 per cent of that, they are all made up,” said Wolff. “We haven’t had a single conversation about money.

“It’s sometimes weird to read this stuff in the press when you know that it’s just total nonsense. Lewis is very aware of the financial realities of the auto industry and about Formula 1 and in the same way, I am very respectful of his achievements and his class and therefore it’s going to lead to, I think, a satisfactory outcome for all of us.”

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58 comments on “Driver salary cap mustn’t force “superstars” out of F1 – Wolff”

  1. I don’t think capping drivers’ salaries is fair. Unlike other team sports, there’s only two main drivers on each teams. It should be included on team cost cap in general. They should had a freedom to allocate limited money resources. Either on drivers, human resources, chassis or engine.

    1. The right question should be “is it fair that these people receive more money than a whole sports series has in turnover” @ruliemaulana.

      In my view the same goes for sports people as they should go for top managers – Sure, they deserve a high income for good work (as Wolf mentions, they should also be inspirational), but those should not be completely unhinged from the “real world”.

      A pay cap either based on some kind of maximum budget (as in many US sports) or a pay cap based on a relation to average or minimum pay in a company, or even compared to say the salary of a prime minister or president (like we have for public sector wages in the Netherlands) make sense.

      It is well founded that higher salaries above a certain point do not motivate. They only help to function to drive up those same salaries when compared. Nobody “needs” tens of millions of salary.

      1. @bascb my concern is the math. If drivers salary cap is set at 10 millions, Lewis can get 15 when Sean Gelael pay 5 millions to be at Merc. I knew Sean can afford it.

        1. Then Mercedes might just risk losing the WCC is they don’t have two decent drivers.

        2. Jockey Ewing
          9th July 2020, 12:27

          Allowing to substract money brought by one driver from the “driver’s cost cap” and having separate a pocket for driver’s cost cap is again a way to create complex rulesets instead of simple ones which are less subject to hacking and easier to judge if respected by it’s spirit or not.
          Drivers can be paid out through sponsors and outside of F1 way’s anyway.
          At transfermarkt.com a similar tendency can be seen, I don’t remember whether there is a stat that expresses, how much the average estimated value of a player grown year by year, or I just deducted that browsing the stat’s a bit. As I remember it was not that demanding, or I read it in an article (half year before maybe?), anyway in the recent years pricy player’s value rised by around 10% / year. That’s something like the average long term inflation of a second world country, with occasional sovereign default possibility. This is how money pumped in effects. And less aware, capable or caring principals then unable or reluctant to sign other than paydrivers at F2 or F3 and so on.
          For example I can’t really imagine Gelael gathering the necessary superlicense points in the 3 years timeframe defined by the rules. He will have so strong competition by the newcomer talents, that maybe even buying many free practice outings would not be enough for him to gather the superlicense points. I don’t know how meetings about signing an obvious paydriver going, but those can be occasionally funny to participate. That’s so corporate.

    2. Michael (@freelittlebirds)
      9th July 2020, 13:20

      There’s no point in having a salary cap – it only invites other types of compensation such as team ownership which aren’t fair to other drivers. If Lewis owned 20% of Mercedes and Vettel owned 20% of Red Bull, it would be very hard for another driver to be treated equally and drivers wouldn’t move to another team.

      1. That’s a good point of view.

  2. A budget cap with exceptions is pointless. It’s just inviting creative book-keeping.

    Bottom line for me – if a driver wants to be World Champion, there’s only one way to do that – race in F1 for the fastest team.
    If the budget cap is all inclusive, the driver may need to swallow some pride and ask for less money and spend it on the car instead. That’s how a budget works, after all.
    They can greedily earn their squillions from endorsements and marketing privately. While they are part of an F1 team, they should be paid as a member of a team. If the team overspends on a driver, they end up with an under-developed car.
    It’s a wonderful to increase competition and depth throughout the field.

    1. Exactly, I would like to watch passionate sportsmen and women who would pursue their dream even without pay. Sure, big past investments in their career should be levelled. But 1-5 millionn a year will be sufficient. There is no need to go above

    2. The drivers didn’t become greedy, they were in demand and the teams were bidding for their service.
      Then you have the money the teams can make off their merchandise and the other knock on effect like increased interests the team brand and affiliated products.

      1. I haven’t heard of drivers donating the majority of their salary to charity, or back to the team.
        I suspect they aren’t arguing for lower pay. It’s called ‘contract negotiations’ for a reason.

    3. Michael (@freelittlebirds)
      9th July 2020, 13:26

      I agree. You can’t pay Lewis Hamilton 1-5 million when Oblak (a goalie) makes 10 and the lowest paid players at Celta Vigo – it’s a spanish soccer team for all of you that have never heard of it – make more :-)

      Even in Tennis winning a grand slam will earn a player more money and that’s for the women’s championship which is less popular in terms of viewership. Should F1 drivers make the same as F2 drivers?

      What about talent like Newey? Does he need to take a 10 fold cut and make 150k? Horner’s rolling on the floor. What about Horner? 200k sound about right? The gasoline for his helicopter costs more…

  3. Not impressed, after the drivers’ salary it will be Totto’s salary the one that will be capped.

    1. If you check the fine print …. “a gradual introduction from 2024 on-wards …”.
      Standard ploy, sign up for something that will impact you personally, but agree to a time-line that has you out before implementation.

  4. How will you even enforce a driver’s salary cap?

    Mercedes F1 team will pay driver Lewis Hamilton a salary of 2 mn in-line with salary cap

    However, Mercedes global may invest 38 mn in Lewis Hamilton’s vegan burgers. F1 doesn’t even have jurisdiction over such a transaction.

    1. Spot on ! That’s exactly what happened in the case of Neymar jr when he was transferred from Barcelona to PSG for a record 220 million euro fee and a stratospheric salary of more than 30 million euro a year. Despite the strict financial fair play rules imposed by the UEFA, PSG were able to bypass those restrictions and to satisfy a rigorous investigation.
      In fact, Neymar signed to play for them for free, however the transfer fees and his salary were paid through lucrative sponsorship deals with Qatari corporations (QNB,Ooreedo,…)

  5. ColdFly (@)
    9th July 2020, 8:04

    Capping drivers’ salaries might be seen as logical, but I don’t think it is needed.
    Firstly, non of the other staff in F1 will have its salary capped. If a driver’s salary is such a burden than just include it in an overall cap.
    But more importantly, as long as F1 is the top of motorsports and with only 20-26 seats available it will always be an oversupplied market (more drivers than seats) in which the costs can be kept under control. If Mercedes refuses to pay $50M to Hamilton, then don’t expect another team to do it. For a good driver the strength of the team is more important than the pay package.
    And at what level to set the cap? €25M? How does that solve the many drivers who are overpaid (Ricciardo, Ocon, Grosjean, Sainz IMO) but well below that limit?

    1. I agree with you that it would be a good idea to include the driver salaries (and other top managers’ renumerations, who are also excluded) in the budget cap @coldfly, that would make sense.

      It would also make it a realistic part of strategizing – does a team put in a more expensive driver, do they get an expensive aero guy (newey, for example) or do they get pay more towards other aspects of the car. A bit like what management games offer :-)

    2. @coldfly

      If Mercedes refuses to pay $50M to Hamilton, then don’t expect another team to do it.

      I think it is the exact opposite, one of the reasons Hamilton has been very well paid is because there is a competitor that is desperately willing to sign him. Hamilton when negotiating with Mercedes has always brought the Ferrari card on the table, Ferrari on the other hand are more than willing to sign a superstar with huge following especially in the US (their biggest market) like Lewis Hamilton to boost not only their sales which BTW are rocketing but the other brands sales (Alfa, Jeep,Dodge… and maybe Peugeot in future)
      It will be a transaction à la Cristiano which contributed massively to the evolution of Juventus as a brand through his impact on the merchandising, social media following and their share prices in the market. It didn’t happen however because Hamilton has other plans though.

      1. Fair point @tifoso1989. Although in those cases the sponsor/owner can pay the driver for marketing services outside of the cap as suggested widely.
        PS the Fiat brands are no longer linked to Ferrari. And for shared board members to confuse the interests would be illegal.

        1. PS the Fiat brands are no longer linked to Ferrari. And for shared board members to confuse the interests would be illegal

          @coldfly
          That’s correct, Ferrari & Fiat group were split from each other in 2014 and they become separate legal entities since. That didn’t stop for example Sebastian Vettel from doing commercials for both Alfa Romeo & Dodge.

          1. Fiat/Alfa Romeo was a Ferrari sponsor until 2018.
            Vettel also did ads for Shell.

          2. @coldfly

            Fiat/Alfa Romeo was a Ferrari sponsor until 2018.

            Thanks for the info, I’ve missed it.

  6. Are the drivers in F1 competing to be champion, or merely to become wealthy?

    1. ian dearing
      9th July 2020, 8:51

      Bit of a nonsense. The superstars bring budgets through sponsorship to a team. As others have said how do you then turn round to a driver and say; sorry we can’t pay you for what you bring to the team in money, publicity and results. As for Hamilton its an easy fix. Pay him his $20 million, and instead of the last Hilfiger contract (which Hamilton was responsible for) sponsoring Mercedes to the tune of $50million and $8 million to Hamilton, it will be adjusted accordingly with Hamilton ending up with what he and the team believes he is worth. And Liberty will not let any superstar walk out the door over money as they know exactly how much a driver or team is worth by the way the market reacts. As we see over in MotoGP when a cash cow comes along they are more than happy to change the rules to accommodate them (Marquez). And I expect F1 will do exactly the same in the future.
      Not that I ever see this becoming a problem anyway. The last big bucks superstar is Hamilton and he will be gone in a relatively short time.

      1. ian dearing
        9th July 2020, 8:52

        Opps. That wasn’t me replying to you. so ignore.

  7. Wolf adding fuel to fire.

  8. There’s some common sense to be had here. If your a driver who is capable of wrangling a car around a track and making the difference between winning the world title or not, companies will pay whatever it takes to get that person in their team. Also recognise that death is a real possibility in this sport and some money is required as compensation should this go wrong. Add the limited life span you have racing and its amazing to discover that most of the F1 grid earns less than Premiership footballer, it’s only the very top that earn high money. If teams don’t want to pay the salary they won’t, which i suspect is partly why Ferrari haven’t kept Seb, its $30m they don’t need on the books especially if they diversify into Indycar

    1. Ferrari didn’t need a salary cap to let go of Vettel.
      No driver is forced on a team, the teams can always go to GP2 or 3 to get cheaper drivers.

  9. I seem to remember Sutton Senna driving for McLaren on a low salary and so much bonus per point, that would be the way to go.

  10. I think they are way overpaid, but at the end of the day, if my company was prepared to pay me ridiculous amounts of money I would not say no.

  11. Where are these superstars going that are ‘forced’ out of F1? IndyCar? Le Mans? DTM? Surely teams in those series can pay tens of millions to drivers…

    1. That was my very first thought.

    2. If the drivers are primarily interested in money, sure.

  12. Its the global car manufacturers, billionaire team owners and super rich Liberty shareholders I feel sorry for. Where are they going to find the money from to fork out for a handful of superstars? Meanwhile Russell, Lafiti, Norris and Stroll are left wondering ‘What’s a budget cap?’

  13. Hmm, salary caps for drivers, right?
    So, Mercedes F1 team sets up a 20 m contract for Lewis commiting him to do his job (race duties) on race friday, race saturday and race sunday + 2 weeks of testing and Daimler/Petronas/Hilfigger/etc. sets up a 20 m contract for Lewis commiting him to work on the other days as a PR spokesman……what can they do about that?

  14. Are we saying that drivers would not go into F1 if they could only earn up to £10 million a year for example? It’s not like most of the field are above that salary as an example either imo. Complete non issue for the majority of teams and drivers and does remove another barrier where rich teams can outbid the smaller teams.

  15. Would Lewis really stop racing if salleries were capped to 30 million per year?

    What would the cap be? 30 million for both drivers?

    30 million with penalties for exceeding it?

    1. No, he has already spent the last year in negotiation with Mercedes for the ‘legacy’ part of his contract with Mercedes post racing career. So they will just add a few million a year to the first years of that contract. Plus as been discussed he will just get a bigger slice of the sponsorship pie. And are we talking about anyone else other than Hamilton? No one else comes close to his earnings. Although it would be interesting to see how they would police if he did a Wolff and took shares in the team instead of a salary.

      1. Vettel came close right until next year. This year he refused to take a pay cut, after being ditched by the team.

      2. Michael (@freelittlebirds)
        9th July 2020, 13:32

        Whatever salary Mercedes pay Lewis, it’s a discounted rate. Mercedes as a team are great and their car is fantastic but there’s no denying that Lewis made their car legendary, just as Vettel did for Red Bull.

        20 years down the road when we look back and say Red Bull, will we remember Max Verstappen driving for them or Sebastian Vettel? As Seb said in this last race, we’ll remember those days! They were glorious!

  16. Michael (@freelittlebirds)
    9th July 2020, 13:11

    No salary cap – F1 drivers are generally underpaid compared to other sports. There are only a handful of drivers paid over 10 million and that shouldn’t even be a talking point at all.

  17. Lewis and merc domination equals unprecedented global publicity equals high pay. Its the platform they use to advertise their merchandise. And cool things sell. Especially winning cool things. So if mercs were getn 500 million a year and they can calculate the effect lewis has had on that then they can also calculate his pay. Its accounting and math.

  18. Oh God, where does it end? I am reminded of Marlon Brando’s comment about Hollywood: “this isn’t art, we’re all just merchants”. You’d think by all the capping discussions that some folks still thought this was supposed to be a “fair” (whatever that is) “sport”.

    It’s a business in the way that a bank is a business. Is it “fair” that a CEO is paid 300x more than a bank teller? The CEO takes more risk.

    Does a successful driver take more risk than a less successful driver? How many drivers are actually paid rather than taking a fee (“salary”) from the money they bring to the team?

    It’s up to the shareholders (and workers’ reps if applicable) of the car manufacturers and sponsors to decide if the fee (as a contractor) is correct, otherwise we’ll get to the point that Central Funding Decision Making Bureau #1 issues a decree (in triplicate) that Driver #1 earns $2m and Driver #7 earns $1,796,542.33, say.

    Where’s that rock that I can go and hide myself under again? The constant bickering is doing my head in.

    1. The CEO takes more risk.

      When a ceo makes a mistake he or she gets paid millions of dollars to leave. The only risk the ceo has is to do with his or her investment in the company.

      1. Old adage from the business world …” you don’t get what you’re worth. You get what you negotiate.”
        Article in the paper today about Elon Musk. His salary is zero or near to it, with all his remuneration based on stock price, production and business value. In other words, performance.
        In the same way, drivers get bonuses for points and podiums.

  19. I don’t see the point in capping driver’s salaries. The teams aim to be profitable and if they choose to pay a driver to the point where they are in the red that’s their business. Similarly if they choose to pay a driver less and post higher profits that’s also their business. Teams should be free to pay drivers and any other employee what they feel they’re worth.

  20. Seriously bad idea, I don’t want Hamilton, Vettel, Alonso, Verstappen etc to go to NASCAR.

    1. Jelle van der Meer (@)
      9th July 2020, 19:42

      Seriously doubt Verstappen would ever go to Nascar and he certainly will not leave F1 for Nascar for the money.

      1. Yes I see. They risking their lives. It’s easier to be a football player and it gives more money. It could damage F1.

  21. Also don’t forget driver managers like wolff get a percentage when a deal is made. The lower the cost cap the less money wolff gets

  22. RocketTankski
    9th July 2020, 14:10

    FIA could set standardised pay bands for all sanctioned series?

  23. No salary Cap. The drivers bring fans and more sponsors to the sport. The deserve their superstardom, white mansions and private jets. Let it be free and let the teams pay them what they see fit. Whether it is through sponsorships or other deals.

  24. As Grosjean said, as the best drivers find their way to the top so the teams they leave behind usually get a %age of the contract fee. Sometimes that’s the only thing keeping the smaller teams afloat. Didn’t Williams benefit from that arrangement with Bottas?

    1. If memory serves me correctly, Bottas was under contract to Williams and they ” relea$ed” him early so that Mercedes could sign him up. Yes there was likely some coin changing hands, as one would reasonably expect.

  25. “We don’t want to lose the superstars out of this sport.”

    Unless it involves making a pact with another top team principal to never sign Alonso.

  26. Is that even legal? Sounds like a Communist rule that to me, not one from a capitalist Society

  27. Well, if Hamilton pushes too much Vettel is at arms’ length

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