Drivers, Circuit de Catalunya

“Nothing decided yet” on $30 million spending cap for driver salaries – Steiner

2020 F1 season

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Haas team principal Guenther Steiner rejected claims teams have already agreed a cap on driver salaries will come into force in 2023.

Team principals discussed a proposal to introduce a $30 million (£23m) spending limit on drivers’ salaries at a Formula 1 Commission meeting earlier this week. Steiner said no final decision has been taken on capping what teams can pay their drivers.

“There’s [been] talks about that since a while, about the salary cap, and there is no decision taken yet,” said Steiner. “In the end I think it will be part of Formula 1 like there is caps in a lot of other sports. But there is nothing decided yet so it’s too early to speak about that one.”

Formula 1 is already due to introduce a budget cap in 2021 which will limit teams’ spending to a maximum of $145 million. However some major costs are excluded from the cap, including driver salaries, which can run to tens of millions of pounds for the sport’s top stars.

The salary cap proposal discussed would involve setting a limit of $30 million which teams can spend on driver salaries. Beyond that, any further expenditure would be deducted from their budget cap allowance. However any team which spends less than $30 million on its drivers would not be allowed to exceed the budget cap.

Steiner said F1’s introduction of budget cap rules next year means a framework now exists within which regulations limiting drivers’ pay can be developed.

“I think at some stage there will be that crossover point coming that if you invest in drivers you cannot invest [as much] in the car,” he said. “But we need to go step-by-step on these things.

“The ultimate goal would be that: How much you invest in the drivers and how much you invest in the car. But we cannot do that straightaway, we need to stabilise these financial regulations first, then we know exactly how it works and then make a step forward. That is what I always said: Having a financial regulation in place, we can now work with it, tweak it, like we do with the technical regulations.”

Other details of the cap are yet to be finalised. “I think everything is on the table on this one,” said Steiner. “But it’s not a short-term thing, it will be a few years away, at least.”

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17 comments on ““Nothing decided yet” on $30 million spending cap for driver salaries – Steiner”

  1. Just put every expense under the team budget cap.
    All staff – including drivers – are team members, and they all contribute to the team performance.

    Why does F1 need to over-complicate every tiny aspect and detail of everything?

    1. F1oSaurus (@)
      30th October 2020, 13:05

      because it makes sense to use the budget cap only for the cars

      1. Nonsense. The point of a budget cap is to contain costs and increase depth of competition.
        Exclusions only serve to undermine the intention and function of the cap.

  2. Not a good idea if you want the best drivers in F1.

    1. i agree!!

    2. petebaldwin (@)
      30th October 2020, 13:02

      Where would they go instead to be paid more and keep their sponsors happy? I don’t think it’d make any difference in regards to where the drivers end up. I don’t necessarily see the point in doing this though as it’s only the top teams who would spend anything like £30m on drivers – I assume it’s been requested by them to give them more power over their drivers in negotiations. If it wasn’t a play by the top teams – we wouldn’t have the clause added that if you spend less than $30m on drivers, you don’t get that added to your cap.

      In other sports where you have competition between teams, top players end up across various teams but in F1 where the same team wins every time, money isn’t really an issue. If Mercedes said “Lewis – we’re only offering you $30m. Final offer”, he’ll accept it because getting paid $30m to cruise to another title is better than getting paid $40m and fighting for 2nd. The alternate option is he retires and gets nothing….

      1. Yeah, David’s comment gave me a chuckle. Where on earth could any of these guys go (or even want to go) aside from F1 to make even a fraction of that?

    3. Salaries at Indy are much less than 10 million $ for most of the drivers. I guess then at other series it’s true as well. Although I guess they can have another sources of income (sponsor money, relics, adverts), so it’s not so sad for them :) Rookies and sophomores earn (at about or not much than) 1-2M$ at F1 nowadays, and that goes up to the range of 10-20M$ if they reach the level of champion candidates like Ricciardo (or when someone manages to sign a really good contract). So currently at about half of the F1 drivers would not be paid less due to that 30M$ cap (in the close future).

      Although inflation is quite high at well funded sports like F1 or top tiers of football. So how often do they intend to renegotiate these cost caps in the future and how much effect it will be on the “in-sport-inflation” is an interesting question to me. As spending more will not be available sometimes, I guess some of the some kind of costs can even go lower for a while. And probably they will make a new agreement on cost caps in something like 5years, to follow real world inflation in some way, because due to real world inflation the cost cap can become a bit too low as time passes.

  3. Next year only one team will spend over 30 mil on drivers.

  4. One group excluded from the budget cap wants to cap another group excluded from the budget cap?

  5. Is this 30m per driver, or 30m total?

  6. This ultimately should be down to market forces. Currently 1 WDC title commands 8-12m. 2 WDC’s commands 12-24m and 3 WDC or more is whatever a team is prepared to pay. If you cap the money then how do you attract the best driver? There’s already difficulty attracting a new driver away from their current team (look at the number of young drivers coming through their respective programs) where drivers are tied to a team. If you limit everything then why should driver A move from Team 1 to Team 2? In a grid where budgets (and possibly tech) are capped how do you stand out from the crowd?

    1. By having a faster car and smoother team operation…
      There isn’t a single driver in F1 who wouldn’t accept a pay cut to drive the fastest car and have the best chance at taking the championship.

  7. It would never work.
    Firstly, it’ll only really effect one team at the moment (as Seb will take a pay cut to go to Aston).

    Secondly, there is nothing stopping Mercedes paying Lewis $10million and letting Petronas for example pay him the other $20/25/30million directly. Brand ambassador of course!

    1. Happens now. Hilfiger pay Mercedes and Hamilton. Just have to amend the amounts. Or Mercedes will just up his Brand Ambassador salary thats in place for when he retires.
      It will hit the coming stars more. The likes of Max or Charles when they start racking up the WDC’s

  8. I can already see it:
    Salary from F1 Team: 10mil
    Compensation for promotional work for [insert sponsor here]: 30mil

    This will change nothing.

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