August 12, 2022

Mercedes Formula 1 boss Toto Wolff says it’s untenable that a cost-capped F1 has no driver salary cap – and suggests it should be even lower than what had was mentioned in the initial proposal.

An early proposal for a $30m driver salary cap came in 2020 as F1 considered ways to cut costs on top of its new overall cost cap – which excludes driver salaries, as well than those of the first three employees of the team.

Discussions of the aforementioned limit remained silent for a long time, but have now returned to the public agenda – and just about every driver asked about it in Baku voiced their ardent opposition, citing that F1 wins. currently in popularity and that salary caps in F1 could create a ripple effect on junior drivers who find it difficult to find sponsors due to limitations on long-term return on investment from backers.

Speaking in Baku on Saturday, however, Wolff said even the proposed salary limits for drivers were too disproportionate to the current cost cap, which for 2022 stands at $141 million.

“It has certainly become a controversial topic, we can see that we are facing a very difficult situation in Formula 1 overall, the sport is booming and Formula 1 is making more money and that is reflected in teams, but we have a cost cap,” Wolff said.

“We have $140 million for 1,000 people, with inflation, we couldn’t even afford inflation. And I think the talk about [even a] A salary allowance of $30 million to $40 million is insufficient in this perspective.

“Now it’s clear that drivers will have an opinion on that, and maybe as a driver I would say the same. But the most successful American leagues in the world have put in place salary caps 15 years ago, it works pretty well there.

Haas team principal Guenther Steiner echoed Wolff’s suggestion that F1 should “learn the lessons of these big league American sports” on how to limit star salaries.

Of these U.S. leagues, the National Football League and National Hockey League have strict salary caps, while the National Basketball Association allows cap overruns under certain circumstances. Major League Baseball does not have a salary cap but rather a luxury tax, in which teams are obligated to contribute additional money if their payroll exceeds a certain threshold.

The cap figure in the US leagues is the result of collective bargaining between a players’ union and the league/teams. And that collective bargaining also gives a mandatory minimum wage, and sometimes an overall wage floor for a team.

“Formula 1 is looking into it with no immediate solution,” continued Wolff. “But I think like every other sport in the world, we have to find a way to act sustainably and 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 [driver] some of the top teams payroll is $30/40/50 million while the rest of the team needs to be divided by $140 million.

“That said, they [the drivers] are huge superstars, they deserve to be among the best paid in the sport in terms of direct salaries. They already are.

“And then we have to find a way to unlock the endorsement, the ability to make endorsement deals, which is two-thirds, if not more, [of sportspeople earnings] for American American sports teams – but direct salaries, Formula 1 drivers are the highest paid.

The proposal that has gained traction within F1 is that of a drivers’ salary allowance rather than a cap – which would mean a team could pay its drivers above the allowance as long as the funds excess would fall outside the team’s cost cap.

Wolff also made it clear that he wants the salaries of the top three non-drivers on the team – currently not included in the cost cap – to have their salaries capped.

Ferrari’s Mattia Binotto, who broadly agreed with Wolff’s position, warned that any move on the driver salary cap would not be quick – and it was not an “urgent” matter.

F1 already has plenty of drivers under contract beyond even the next 2023 season, while Red Bull’s Max Verstappen is on a big contract until the end of 2028.

“It’s tricky, I’m not sure there’s a solution to be honest,” Binotto said of a salary cap for drivers.

“It’s not just tricky – it’s not urgent, and the reason for that is that the driver salary cap will only affect three or four teams at most, not more than that.

“The teams that will be affected already have long-term agreements with their drivers. So long that it’s not something we have to put in place for next year. It won’t be until 2026.”