June 25, 2022

As Formula 1 teams continue to struggle with the difficulty of meeting the current budget cap, a potentially significant future change has become a topic of debate in Baku.

Driver salaries 鈥 which are a particularly large expense for some teams 鈥 are not included in the cap. Unsurprisingly, drivers almost unanimously opposed any suggestion that should change.

Red Bull’s Max Verstappen, who in March signed a new contract keeping him with the team until the end of 2028 for a reported fee of 拢40million a year, was among the most vocal critics. The reigning world champion concluded it would be “completely wrong” to introduce a salary cap for drivers at a time when Formula 1’s popularity is soaring and revenues are rising with it.

F1 made a profit of 拢27.5m ($34m) in the first three months of 2022 as the effects of the Covid-19 pandemic eased, while total revenue generated by the F1 group have doubled.

“Right now F1 is getting more and more popular and everyone is making more and more money, including the teams, F1 [owners] 鈥 everyone benefits,鈥 Verstappen observed.

Drivers take risks and earn their fees, says Verstappen

鈥淪o why should drivers, with their intellectual property rights and all, be capped? [Those] who actually bring the show and put their lives on the line, because we do? So for me, it’s completely wrong.

It’s not just today’s Formula 1 drivers who would feel the effects of such a cap, Verstappen said. It foresees a real impact for junior pilots in their efforts to reach the top. Drivers racing in the lower categories are highly dependent on sponsors or backers to advance their careers, which becomes a less lucrative investment if their future earnings could potentially be lower.

鈥淎cross all the junior categories you see how many of these drivers have a sponsor or backing, which will end up having a certain percentage of their income in F1 potentially or elsewhere,鈥 explained Verstappen. 鈥淚 think that’s going to limit that a lot because they’ll never get their cash back if you get a cap. So it will also harm all the junior categories and I don’t think you want that.

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Alfa Romeo’s Valtteri Bottas echoed the world champion’s view. 鈥淎t the end of the day, when you come up with the different categories, you need financial backing, and eventually the investors who invest in you expect a good return on investment,鈥 he said.

鈥淚f it is limited, with already this big risk for the investor, it will become an even bigger risk.鈥

Toto Wolff, Mercedes Team Principal, Baku Street Circuit, 2022
Salary caps already exist in other sports, Wolff pointed out.

Bottas also acknowledged the obvious reason why drivers were unlikely to support limiting their pay.

“I’m sure no driver votes for the salary cap because we feel like we’re making a decent amount of money doing what we do, risking our lives and working as hard as we can and being at the center of the spectacle.

“F1 is really booming at the moment, we’re doing more and more engagement with the fans, more and more off-track work. It doesn’t really make sense that at this time F1 rises, pilot salaries should fall.”

Mercedes team principal Toto Wolff, however, believes the idea has potential and could work. He also suggested that now might be the time to cap salaries for team managers and senior team members as well.

“It has become a controversial topic,” Wolff said in Azerbaijan on Saturday. “We can see that we are facing a very difficult situation in Formula 1 as a whole.

“The sport is booming and Formula 1 is making more money and that trickles down to the teams, but we have a cost cap. We have $140m (拢115m) for every thousand people. With inflation, we weren’t even able to pay it and I think talking about $30 million or $40 million in wage allowance is insufficient from that perspective.

鈥淥bviously the drivers will have an opinion on this and maybe as a driver I would say the same thing, but the American American leagues, which are the most successful in the world, have introduced salary caps there. 15 years ago.”

The NFL (American football) and the NBA (baseball) are two major leagues that have implemented salary caps for their teams. Of course, the lists of athletes in these competitions are much larger than the F1 teams of two drivers each.

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The NFL uses a “hard cap”, which means that no team is allowed to exceed the limit for any reason. In 2022, this limit was set at $208.2 million, after a major drop in 2021 due to the pandemic. Even signing bonuses must be included in the cap.

Even places in the junior categories cost seven-figure sums

鈥淚t works pretty well there,鈥 Wolff believes, 鈥渁nd Formula 1 is looking at it without an immediate solution. and to become independent from sovereign wealth funds or public teams.

“So it’s certainly clear that’s going to be one of the main areas, because you can’t just have a payroll in some of the top teams that’s $30, 40, 50 million while the rest of the “Team is to be split into $140 million. But that said, they’re huge superstars, they deserve to be among the top earners in the sport.

But drivers remain concerned that a salary cap could make it harder for the sport’s future superstars to move up into the junior grades in the first place.

While some like Lance Stroll, Lando Norris and Nicholas Latifi were in the privileged position of having the financial support of their parents, many others like Esteban Ocon, Pierre Gasly, Valtteri Bottas and Lewis Hamilton had to gain the support of F1 teams or other sponsors. . Without this support, these drivers ran out of money before reaching F1.

鈥淚 unfortunately had a lot of friends who would have needed that support when they were younger and they had the talent to move up the ranks,鈥 Gasly remarked. 鈥淯nfortunately, they didn’t have the chance.

“I don’t think that by going in this direction, we are going to give more opportunities to these young talents without financial support.”

With the luxurious lifestyle that many drivers enjoy, it’s easy to forget the sacrifices some of them had to make to get where they are. Ocon and his family lived in a trailer for a long time as his parents struggled to pay the fees. Even a seat in F3 costs up to 鈧1million (拢860,000) a year.

It’s easy to dismiss drivers who oppose salary caps as simply being greedy. But in a sport where money can make all the difference in securing a seat, the potential effects of a pilot salary cap wouldn’t just affect today’s competitors.

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