As discussions over the proposed cap on driver salaries continue, it is understood that a $30m limit is to be agreed.

In February it was announced that a working group was to be set up to look into the possibility of a salary cap for drivers and leading staff, for despite the introduction of the budget cap this year, one of the most contentious aspects of teams spending appeared to have been overlooked.

While the overall team budget cap is $145m this year - reducing to $135m by 2023 - the salaries of drivers and a number of 'leading' personnel are exempt.

Getting the teams to accept a budget cap was one thing, but the idea of limiting what they can pay their drivers and top staff quite another, and, understandably, a number of the drivers are not happy.

Indeed, it is believed that Lewis Hamilton's one-year deal with Mercedes is worth around £40m - at $55m, more than a third of the 2021 limit his team is allowed to spend on its entire race programme.

Following February's meeting of the F1 Commission it was announced that a working group was being set up to investigate the possibility of introducing a cap on salaries.

"As 2021 sees the introduction of a cost cap for the first time in Formula 1, various topics around controlling costs and how this overall objective can be achieved over the coming years were tabled during the meeting," read the official statement. "As part of this, a working group will be created – including the drivers themselves – to discuss the topic of driver and senior team management contracts."

Three months later and the teams are thinking along the lines of a $30m cap.

"At the end that is up to the teams," said AlphaTauri's, Franz Tost recently. "I think it should not be more than around 30 million for both drivers but once more this is in discussion and it depends then always how much financial resources the different teams have and in which direction we will go."

"I think the number that Franz mentioned was mentioned in the discussion, so in that region," agreed Otmar Szafnauer.

"We are in early discussions so I think there needs to be done a lot more work before we get to a number and how it is applied and all that stuff, so I don't want to get to a number." said Guenther Steiner.

It is understood that under the current proposal, teams would be allowed to over spend in terms of the driver salary cap, but the excess amount would then be deducted from the ($145m) race budget. However, should they underspend the remaining money could not be used for other purposes.

It's understood that only Mercedes spends in excess of $30m on its drivers.

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READERS COMMENTS

1. Posted by kenji, 19/05/2021 0:20

"@ TS Goodchild...I have no problem with top drivers earning top salaries but that has to be seen in perspective. Finding accurate figures to test the comparisons between Indy Car and F1 for example shows [ possibly ] a factor of around 10/1!!! in favor of F1. IndyCar may not be as fast as F1 but for all intents and purposes they share the same risks, possibly higher owing to oval racing! Either Indy Car drivers are underpaid or F1 drivers are overpaid. I tend to favor the latter. As for Shumacher and his earnings...he was grossly overpaid IMO just like a few of todays drivers. If you look at motorsport in general, then if anyone should be paid stratospheric sums surely it should be Moto GP riders. They race wheel to wheel under the most dangerous conditions of all. Marquez at the height of his racing was being paid around $15M annually but below him the figures taper off substantially....to below double digits. F1 drivers are cosseted in highly protected machines with maximum survival elements built in, in the event of serious accidents. Grosjean's accident is a perfect example. Moto GP riders have absolutely none of that. Nothing at all between them and total annihilation should they suffer a maximum failure and they regularly hit 350KPH on the straights....One more point is this. Russell's race is possibly more difficult than Hamilton's yet he gets 10 times less for his efforts. Should Russell get a huge increase or should Hamilton be paid less, because the inequity here is massive. Good debate here....
"

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2. Posted by F1 Yank, 18/05/2021 18:50

"Ok, this is quite the discussion. How much money should the drivers make? When in doubt simplify. I for the most part agree with Kenji on this one and the Russell experiment example. The larger perspective (as far as total $$) is too distorted in regards to F1. (just my opinion) Ultimately you have to initially look at the teams budgets, costs, winnings, losses, sponsorships. (all within F1) Then you can expand the scope outside of F1 and what it might be. I would love to see how these numbers are generated since they can be easily skewed. F1 has created a problem through enablement, how can you go back or give someone a pay cut? This salary cap through contract agreements would be supplemented with sponsorship payments, perks, whatever to cover the difference. F1 should implement a salary cap and limit sponsorships as well. Are they drivers or not? How about cap the salaries to the least paid driver on the grid? I wonder how that would go over! TSGoodchild, yes F1 is the top in motorsport and it should have the best drivers, but if those drivers are just looking for the most coin, they are in it for the wrong reason."

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3. Posted by kenji, 17/05/2021 22:32

"@ Chicken FarmerF1....You make some very good points re salaries however I see it a bit differently. To a large extent it depends whereabouts the cost is taken up in the P & L. If it is deemed to be a direct cost within a broad range of M & P then it varies the analysis. If it falls into the overheads then it once again is seen to differ in analysis. As a DITWC I look at the application as part of a bigger picture. Driver contracts, I would think, do not allow for parent company performances as they apply to shareholders in general. They invest on a 'risk V reward basis and can lose as easily as they can win. I would rather see contracts fall within the proposed cost cap with a bonus system for points scored maxing out at the proscribed amount. Perhaps it would help spread some of the better drivers into lesser teams and lift the overall performances from the current level. No driver IMO is worth $50m PA irrespective of the size of the parent company. Your reasoning re Hamilton is flawed insofar as the Russell experiment proved. When a backmarker driver can 'virtually' win his first and only race in a Mercedes and he drives for a paltry $4.00M [est ] salary one has to ask the question...is Hamilton worth, conservatively, 10 times the Russell salary? I think not. Enjoy Monaco....."

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4. Posted by ChickenFarmerF1, 17/05/2021 19:48

"@kenji - perhaps I'm more of a dyed in the wool capitalist, as I think any spending cap, whether for driver salaries or total team expenditures, is not a good thing. And deciding what someone is "worth" being paid is dependent to a large extent on the revenues they generate. It's partly why the "fight for $15" minimum wage here in the USA is so wrong-headed. If you don't produce more than $15 (plus overhead) in revenue per hour I'm not going to pay you that much. Force me to pay that much and I'll eliminate that job either by closing up shop, or automating, or something. If the Merc bean-counters credit Lewis with increase sales to the tune of $100mil extra profit per year, then he absolutely is worth $50mil. They clearly think keeping him in their cockpit is worth the $$,so that is all that should matter. Why should Lewis have to take a 40% pay cut when all that will do is add to the pockets of Daimler shareholders, especially when said shareholders are quite happy with what they're getting already?"

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5. Posted by BrightonCorgi, 17/05/2021 14:39

"You'd think some teams would love a salary cap, they just don't want to say that. Let the drivers take on individual sponsors to a higher degree than most teams allow to make up the difference."

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6. Posted by jcr, 17/05/2021 13:48

"Hammi is packing his bags already !!
Big push to finalise contract before summer break ??
IE, Before any cap is agreed."

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7. Posted by jo6pac, 17/05/2021 12:37

"Will there be a cap on pay to drivers. I don't think there should any."

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8. Posted by kenji, 17/05/2021 12:03

"As a dyed in the wool capitalist i am all for drivers being paid reasonable salaries, however I'm of the opinion that the current salaries of some drivers are simply ridiculous. No driver is worth in excess of $20M. That is a helluva lot of money in anyones language. "

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Teams still discussing driver salary cap

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