A cap on Formula One drivers’ salaries is under discussion as it is believed that teams have agreed in principle to the idea. It proposes a £22 million cap for teams to pay drivers, starting from 2023. Teams can pay more but the excess will be deducted from a £105 million annual budget – another cap for all teams by 2023.
Formula One superstar and soon-to-be seven-time world champion, Lewis Hamilton, is paid an estimated £40 million a year, although he is yet to negotiate a contract for 2021. Speaking to Reuters, Mercedes team boss Toto Wolff said it was an emotional issue:
“Formula One teams, in order to be sustainable long-term and attractive sports franchises, need to show profitability like any other company out there and I think we all need to achieve that.
“On the other side, it’s clear that drivers, the ones that are in Formula One, are the best in the world and should earn high salaries like all the other top stars in sport.”
It is clear that there is disparity in the salaries of some Formula One drivers at the moment. Hamilton, of course, earns a substantial amount when compared to Williams drivers, Nicolas Latifi and George Russell, who each earn around £1m. The sport needs to do all it can to bring the teams closer together both on and off the track, as this will in turn increase the appeal and popularity of the sport.
Mercedes are the Constructors’ World Champions once again for a record seventh consecutive year, and their spending has played a part in their dominance. Fans want to see closer, more exciting races every single week, and the proposed salary cap is a small, but positive step towards achieving this.
It will also help put a lid on spending as the sport faces an uncertain financial future as a result of the Covid-19 pandemic, with income streams likely to be affected for several years to come. The caps on annual budgets and salaries suggests that the sport intends to do all it can to level the playing field and make it a spectacle that is harder to predict than ever before. There are still many more things to be done for this to really happen, but signs point to a different and exciting future for Formula One and its fans.