Drivers observe the national anthem, Bahrain International Circuit, 2022

Are F1 drivers thinking only of themselves by opposing a salary cap?

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While Formula 1 teams continue to grapple with the difficulty of staying within the current budget cap, a potentially significant future change became a focus of debate in Baku.

Drivers’ salaries – which are a particularly significant expense for some teams – are not included within 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 at the team until the end of 2028 for a reputed £40 million per year, was among the most vocal critics. The reigning world champion concluded it would be “completely wrong” to introduce a driver salary cap at a time when Formula 1’s popularity is soaring and revenue growing along with it.

F1 made a profit of £27.5 million ($34m) over the first three months of 2022 as the effects of the Covid-19 pandemic lessened, while the total revenue generated by the F1 Group doubled.

“At the moment F1 is becoming more and more popular and everyone is making more and more money, including the teams, F1 [owners] – everyone is benefiting,” Verstappen observed.

Max Verstappen, Red Bull, Baku Street Circuit, 2022
Drivers take the risks and deserve their fees, says Verstappen
“So why should the drivers, with their IP rights and everything, be capped? [Those] who actually bring the show and put their lives at risk, because we do? So for me, it’s completely wrong.”

It’s not just today’s Formula 1 drivers who would feel the knock-on effects of such a cap, Verstappen claimed. He foresees a real impact for junior drivers in their efforts to reach the top. Drivers racing in lower categories rely heavily on sponsors or financial backers to further their careers, which becomes less of a lucrative investment if their future earnings could potentially be lower.

“In all the junior categories, you see how many of those drivers have a sponsor or a backer, who eventually will have a certain percentage of their income in potentially F1 or wherever,” Verstappen explained. “I think it’s going to limit that a lot because they will never get their return in money if you get a cap. So it will hurt all the junior categories as well and I don’t think you want that.”

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Alfa Romeo’s Valtteri Bottas echoed the world champion’s view. “In the end when you come up with the different categories you need financial support and eventually the investors who invest in you they are expecting a good payback,” he said.

“If that is being limited, with already being this big risk for the investor, it will become an even bigger risk.”

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 supporting limiting their pay.

“I’m sure no driver is voting for the salary cap because we feel like we earn a decent amount from doing what we do, risking our life and working as hard as we can and actually being the centre of the show.

“F1 is really booming at the moment, we’re doing more and more engagement with the fans, more and more work off the track. It doesn’t quite make sense that at this time that F1 is going up that the drivers’ salaries should go down.”

Mercedes team principal Toto Wolff, however, believes the idea has potential and could work. He also suggested the time may have come for the salaries of team principals and senior members of the teams to be capped as well.

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

“The sport is booming and Formula 1 is earning more money and that trickles down to the teams but we have a cost cap. We have $140m (£115m) for a thousand people. With inflation, we haven’t been able to even pay it and I think the talk about 30 or 40 million dollar salary allowance is inadequate when you take that perspective.

“Clearly the drivers will have an opinion on that and maybe as a driver I would say the same thing but US American leagues, that are the most successful in the world, have introduced salary caps 15 years ago.”

The NFL (American football) and the NBA (baseball) are two major leagues which introduced a salary cap for their teams. Of course the rosters of athletes in these competitions are much larger than F1’s teams of two drivers each.

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

Even seats in junior categories go for seven-figure sums
“It works pretty well over there,” Wolff believes, “and Formula 1 is looking at it without an immediate solution. But I think, like all the other sports in the world, we need to find a way of how we can act sustainably and become independent from sovereign funds or state-owned teams.

“Therefore it is certainly clear that this is going to be one of the main areas because you can’t simply have a salary bill in some of the top teams that is $30, 40, 50m when the rest of the team needs to be divided in $140m. But having said that, they are tremendous superstars, they deserve to be among the top earners in the sport.”

But drivers remain concerned a salary cap could make it harder for the sport’s future superstars to make it through the junior categories in the first place.

While some such as Lance Stroll, Lando Norris and Nicholas Latifi were in the privileged position of having financial backing from their parents, many others such as Esteban Ocon, Pierre Gasly, Valtteri Bottas and Lewis Hamilton had to win backing from F1 teams or other sponsors. Without that backing, those drivers have run out of money before reaching F1.

“I’ve had a lot of friends unfortunately who would have needed this backing when they were younger and they had the talent to make their way up,” Gasly remarked. “Unfortunately, they didn’t have the chance.

“I don’t think by moving that direction we’re going to give more opportunities to these young talents without financial backing.”

With the luxurious lifestyles many of the 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 caravan for a long time as his parents struggled to pay the costs. Even a seat in F3 costs as much as €1m (£860,000) per year.

It’s easy to dismiss drivers opposing salary caps as simply being greedy. But in a sport where money can make all the difference to securing a seat, the potential knock-on effects of a driver salary cap would effect more than just today’s competitors.

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Author information

Claire Cottingham
Claire has worked in motorsport for much of her career, covering a broad mix of championships including Formula One, Formula E, the BTCC, British...

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  • 31 comments on “Are F1 drivers thinking only of themselves by opposing a salary cap?”

    1. They’re 100% thinking about themselves but they’re in a sport where everyone does that! Liberty are happy to leave beind iconic tracks in order to rake in more money to race on car parks. The teams have no issue with dodgy sponsorship deals to try and get around the ban on tobacco advertising. The FIA are happy to be involved in what happened at the end of last season to improve “The Show.”

      The teams aren’t struggling to pay the drivers! Most of them would happily spend a lot more overall than they are currently allowed to and are lobbying the FIA to be allowed to spend more! The teams that can’t afford to spend more are paying their drivers less than what the salary cap would be anyway so don’t stand to gain anything by this….

      I’ve heard a lot about capping drivers’ salaries but I’ve yet to hear a single reason suggested as to how this would improve anything for anyone inside or outside of F1 other than for the top teams who appear to be desperate to spend more money than they’re currently spending anyway!

      1. I think the idea is that this would open up the lesser teams to be able to get the top drivers along with the top teams, but that’s a pipe dream. First and foremost because the top drivers would still prefer to drive for the top teams because they want to have the best cars.

        End of day, it would just mean the drivers salaries were capped, and most drivers would sign a separate sponsor agreement with their respective teams parent company to make up the difference and nothing would change.

    2. Same as we do when we negotiate our own salaries. As they should… Same goes for the business owners, they push their own interests too. The moment you stop pushing and accept things without a fight, you become a victim. Sure, it’s easy to be less sympathetic to someone being paid 10 or 100 or 1000 times more than most of us, but the principle is the same and we’d do the same if we were in their shoes. If my government issued a legal limit on my wave, I imagine I’d have something to say about that (to put it mildly, very mildly).

    3. What about having a sliding salary cap?:

      The top earner should not earn 10 times more than the lowest earner.

      E.g. If Verstappen is the top earner with 40 million pounds, then the lowest salary on the grid cannot be below 4 million pounds.

      1. If you phrase it like you do than the team that gives their driver 10.000 Euro makes it so Hamilton can only make 100.000.

        But even if you reverse it to comply with the example, it would be wrong to force that minimum on another team just because a Mercedes, Ferrari, or Red Bull can offer much more.

    4. Not totally against the idea, but Verstappen and Bottas bring up a good point. If F1 is netting more and more profit, where does it go if not to the people earning it (not only drivers, but also staff, mechanics etc.). If it only goes to enhance the Liberty ROI, I think the drivers are absolutely right.

      1. A couple of ideas to burn off some of that profit.
        1 – reduce the price of tickets
        2 – Make all races free to air

        after all, its bums on seats and eyes on boxes that have got then there in the first place.

    5. Just not sure it’s necessary. I doubt driver salary costs are whats keeping any manufacturers out of the sport and I don’t see a world in which a cap is agreed at a level that is sufficiently beneficial to the smaller teams but that the bigger teams and drivers would all agree to.

    6. I don’t hugely mind either way, but since NFL, NBA, NHL, & MLB have had a player salary cap for a while & they’ve survived, so would F1 equally survive with a driver salary cap.

      1. @jerejj I can’t agree with the analogy of salary caps on F1 drivers to the team (not player) salary caps of Major Leagues like NHL, NBA, MLB, and NFL. For one thing, these are sports for which the equipment isn’t the issue. These teams and their success depends totally on the mix of players they have in any given season and that mix is constantly changing year to year. The main purpose of the team salary cap is to prevent the most resourced teams eg. New York Yankees from being able to buy up all the best pitchers and hitters for 25-30 mill a year and walking their way to Championships time and time again.

        Nothing prevents the best athletes in the Majors from getting the huge and often multi-year deals…the players themselves aren’t capped but the teams are, from loading up on all the stars when they have way more money than many other teams, due to their history and their market.

        Further to that, and to show how athlete-centred the Majors are, in the NHL for example the teams that did the worst in a season get the best picks of the new young players coming into the league, to try to keep more of a balance amongst the teams that way and give the lessor teams/markets and chance to build themselves up to compete at the top level so that they don’t just always lose games and therefore ticket sales and draw and excitement towards their team, especially if they are in weaker market areas that aren’t New York for baseball, or Toronto for hockey.

        In F1 the teams have now been capped to avoid the similar scenarios of he-who-has-the-most-money-wins which is great and was needed. But to me capping the individual drivers salaries would be wrong and unprecedented in sports, since the athletes themselves in all these cited Major sports aren’t limited to what they can make at all, it is the teams that are limited to the mix of athletes they can have through the caps.

        Sure sometimes a top player in a negotiation might decide to take a few million less in order to play on a top team he desires (say 28 mill instead of 30) to help the team stay within the cap or even to help the team take on another certain player with whom that 28 mill guy sees as someone he wants on the team as that will help them in the odds of winning a Championship, but in general the players are free to make what the market will bear.

        F1 drivers should be free to be paid what the market will bear based on their talent just like any other sports team does. We are talking about two athletes per team here. They are the star ‘pitchers’ or ‘quarterbacks’ that are a big part of the draw to a team and it’s ability to succeed. And as is being pointed out, they have backers that won’t back them anymore if all their time, money, and resources is ultimately going toward a limited, capped potential for return on investment.

        To me, to make the analogy to Major sports work I think F1 would have to include let’s say the drivers and their travelling teams of garage personnel that are at each race (not managers as they aren’t part of caps anywhere either) and cap said personnel on a whole. Isolating the stars of the show and capping them seems to me wrong and unfair and would make them the only athletes of top level pro sports globally to be capped, or at least paid less than the market would bear.

        As well, the top teams have just been truncated by hundreds of millions of dollars that they normally have to spend, while the lesser teams are getting more for their participation in F1. Seems to me the money is there for them to pay the drivers who are the focal points of the teams their fair market value. We are talking about an entity that operates in the billions. Drivers capped at 10 or 15 mill in the pinnacle of Motorsports driving the best cars in the world seems silly to me.

        1. @robbie Great analogy with which I ultimately find myself fully agreeing.

          1. @jerejj Good stuff. Glad I didn’t waste any ink with that novel;)

    7. I just don’t see the reason. The best teams (those that drivers want to drive for) all have backers with a ton of money. It is no problem. It’s not like the drivers’ sallary is subtracted from the team budget. Also practically it would be a nightmare to effectivly regulate a drivers earnings given all the different contracts they’re under. And does the FIA think to regulate a contract like Verstappens that is already signed and extens to 2028?

      Thinking of it – who even is the initiater of this? Wolff? The FIA? Liberty? … Their greed exceeds all drivers by a mile.

    8. Are F1 drivers thinking only of themselves by opposing a salary cap?

      Of course they are. That’s not even a question.

      While businesses and corporations can sponsor drivers to get their branding shown in the global media, they will. That won’t change.

    9. If you can’t afford a driver, you can’t afford him end of story.
      No team is forced to pay a driver a high salary.
      This is more to protect teams from losing their drivers to a higher paying offer.

    10. For me there’s a few things to bear in mind. Sponsors used to pick the tab up for the drivers salary as without big name drivers at a team some sponsors won’t come along to you, so there’s nothing unreasonable about paying a driver a large salary. The next is that there “used” to be a sliding scale, 1 WC was a pay packet of 8-12m, 2 WC was 15-24m, 3 WC was basically what can you gouge out of the pockets of the team. Now before people start jumping up and down on this point remember that after Senna died in ’94 there was no WC on the grid until Schumacher took the title, so once Hamilton and Vettel retire there’s only Max (at present) who has a WC and he’s already on a large packet so teams need to be able to encourage drivers to come to them ‘cos otherwise where is the incentive to move teams? Last point and it really shouldn’t need pointing out but erm Bahrain….Barrier….Fireball…..Motorsport is and will always be dangerous, yes safety is much much improved but accidents happen and no eventuality can be ruled out. If people think F1 salaries are bloated look at the footballers who get paid more than the majority of F1 drivers for kicking a ball of air around, in F! its really only the cream of the crop who get bumper pay days.

    11. Yes, yes they are.

    12. Yes.

      But it would be interesting to know more about the contract constructions junior drivers make with sponsors. Do they need to pay them back? Pay a %? Pay in attending sponsor events?

      1. It’s very costly to get someone in an F1 (or lower category seat).

        And there is a difference between sponsors and investors.

        A sponsor is mostly interested getting his ‘product’ in the picture. The thing a driver has to do for the sponsor is beiing a kind of ambassador for the sponsors product. That is mostly wearing the sponsors products (watches, clothes or whatever) or using it (car or other products) or making adverts with the sponsors logo (A store or prodcut like oil or so) or attend events that the sponsors organises.
        These ‘obligations’ are well described in the contract between the driver and the sponsr (or tehir managements).
        So just doing things to get the product known by more people.

        An investor ‘invests’ in drivers.
        When an ‘investor’ sees someone from who he thinks that he can get in F1 (or another competetive racing class) he makes a deal with that guy (or his manager).
        The deal is that the investor is going to ‘invest’ in that drivers career. So he is willing to pay money but only when he gets a contract in which is stated that when the driver gets to a point where he is getting paid to drive in a car the investor gets a percentage of the drivers income.

        So, if there should be a budget cap it’s getting less interesting for people to invest in drivers.

    13. Verstappen is Right. It cost Millions to get a Driver Trough Karting F4 F3 F2… If a Driver reaches F1 they can repay those Millions. But if there is a Salary Cap less people would invest in Drivers..

      1. Indeed drivers (who aren’t so lucky to have rich parents or racing parents) has to borrow money ….. They have to repay that.

    14. Yes, drivers are 100% thinking only of themselves, but that is appropriate in this situation because teams are 100% thinking of themselves in this situation, and F1 and the FIA are thinking of themselves as well. With everyone looking out for their best interests it would be foolish for drivers to be the only magnanimous party at the table.

      The other thing to note with NFL, NBA, and NHL salary caps is that a players union collectively bargains with the governing body on a recurring basis to determine/adjust the cap values and other revenue-sharing adjustments as profits go up or down. So the GPDA would have to bargain collectively with either the FIA or F1, whoever is determining the cap values, and if they come to an impasse, the result is either a union strike or a lockout. Both of which are extremely harmful to a sport trying to gain ground in new markets. So Toto and whoever else is in favor of a salary cap need to think long and hard if the risk of future work stoppages due to failure to reach agreements on the cap values is worth the money saved by instituting a cap. For the NFL and NBA, the cap is definitely worth the trade-off for the occasional work stoppage. For the NHL, which is not as profitable as the NFL and NBA, I think they have suffered pretty greatly when they have stoppages and it has damaged them more severely at the very time when they have been trying to make in-roads into becoming one of the major sports.

    15. I don’t see any reason for a salary cap. They are paid what they are worth. If they are too expensive, teams have other options…

      No driver joined F1 with a 30 million euro contract. They get to negotiate such salaries after showing results. A team decides who to sign up also bearing in mind what the driver brings to them, be it results, sponsorship, prestige or whatever. I bet Red Bull or Mercedes are happy to pay what they pay to Max and Lewis just so the other team doesn’t have each of them!

    16. If we look only at Formula 1, one driver has been killed in the last 27 years, and in the same time period three marshals have been killed. I don’t agree with the sentiment that the drivers deserve their enormous salaries because they are ‘risking their lives,’ because in reality if F1 drivers were paid nothing at all, every one of them would still want to be on the grid (as evidenced by the fact that marshalling is more dangerous according to this admittedly cherry-picked statistic, but they do get paid nothing and still want to do it, and driving an F1 car is a much more desirable job for most than marshalling, even for no money). Some may boycott to take a stand, but if no pay was the norm then the same drivers would all be racing in F1.
      While the likes of Esteban Ocon may have had to live in a caravan in order to race, that is not evidence that those who make it should be paid huge amounts of money; it is evidence that it shouldn’t be so expensive to fund a career in the first place. If the salary cap was somehow able to reduce that cost (I doubt it would be used to do so), then it would certainly be a good thing. And, being realistic, we are not talking about the drivers suddenly not living luxurious lives, the cap will still be an enormous amount of money. But maybe the salary cap would have to be used to reduce the cost of funding a career in order for it to fully work for reasons given in the article.

      1. Indeed, it’s not that they’re talking more risks than regular road drivers, if anything it’s their performance that earns such a high salary, there’s not many people who would be competitive with the best f1 drivers, even though certainly there are some around who are held back by money.

    17. F1 drivers earn way too little for their salaries to be capped. You look at top earners among athletes, you have football, basketball, tennis, boxing, golf, American football, and Lewis is 17th and then Max at 26th. All these other lame sports have higher earning potentials and these guys aren’t travelling across the world every week nor are they risking their lives playing (maybe except boxing) and none of them had to take a big financial risk getting there (a football is cheap, racing is not). It’s way more competitive, only 20 seats.

      F1 should be competing to be the best sport and it’s illogical if the sport doesn’t think it’s star athletes are as valuable as other athletes. I think team principals, and the F1 and FIA CEOs or upper management salaries should be capped because literally anyone can do their jobs. Give it to people like Newey, Seidl or Allison who actually work for their jobs instead of talking to the media the whole day.

      1. F1 drivers earn way too little for their salaries to be capped.

        -1
        Sport isn’t about being paid the most money. Nobody wins in that competition.

    18. Tim (@tsgoodchild)
      15th June 2022, 23:06

      I genuinely believe it will rip the sport apart until another motor racing series or breakaway series tempts the best drivers to race for greater returns. Look what is happening to golf currently with the LIV Tour tempting those away from the prestigious PGA Tour. If an F1 driver can “only” earn say $10m per year, but a new championship or even IndyCar offered a $10m race win bonus, you’ll suddenly see drivers go elsewhere. Let teams run their payroll as they see fit – lets just concentrate on the budget cap for putting two cars on the track.

    19. Self-serving egomania? How can you even think of it?

    20. Maybe there should be cap as to how much profit Liberty can make. It’s funny how often you hear wages are too high but no one talks about how high company profits are. There is no limit to how much money a company can make. :-) Perhaps give Liberty a cap and the profits beyond that line can go to charity. lololololol. One day the people will wake up.

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