When introducing any budget cap, whether it’s running a Formula 1 team, paying salaries, or whatever, there is always one question that comes first: How do you manage to comply with check the ceiling? With this question in mind, the introduction of a salary ceiling certainly seems like a sham.
Because what is the plan? At the end of October, it was announced that Formula 1 is considering introducing a salary ceiling for drivers by 2023. The teams would even have agreed to this. It was not yet entirely certain how low that ceiling should be, but $ 30 million would be a realistic estimate. Mind you, both drivers must be paid from that amount. In concrete terms, this means that drivers already Lewis Hamilton, Max Verstappen, and Daniel Ricciardo would be significantly worse off, as they now reportedly earn more than that $ 30 million on their own.
The acceptance of such a proposal is remarkable. Some time ago, Mercedes team boss Toto Wolff called out that people had to be careful with those kinds of plans. It could just scare away the superstars of Formula 1, he reasoned. Nevertheless, he would now also have agreed to the plan on behalf of Mercedes, because the reports are about a ‘unanimous agreement’.
On the other hand, it may not be that remarkable at all. Toto Wolff will also know that there are structures to bypass the ceiling. He has to, because he knows better than anyone that superstars like Lewis Hamilton don’t settle for less.
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What Christian Horner said immediately after the reports is completely true. He explained that a salary ceiling is legally very difficult to hammer down, because once again, a salary ceiling is difficult to control, even more difficult than the regular budget ceiling. In that case, it is, simply put, a matter of keeping the receipts well.
This is more difficult in the case of driver salaries. Although under contract, they are also separate from the team. Hamilton earns his money as a Mercedes driver, but is also, for example, under contract as a ‘brand ambassador’ with Tommy Hilfiger. Max Verstappen can say the same with clothing brand G-Star. They already supplement their income with side activities and such constructions offer F1 teams the opportunity to play.
If an F1 team finds $ 15 million as a driver’s salary too little and wants to supplement that salary, a team can appoint a direct partner to bridge the gap. Mercedes can, so to speak, ask title sponsor Petronas to come over, if necessary, parent company Daimler will compensate the oil giant for this. As long as the transactions take place outside the administration of the Formula 1 team.
Another method, suggested by Christian Horner, is to supplement the salary from your own wallet, with the regular budget of 145 million dollars. Of course that is not a desirable way, but it does indicate how the Formula 1 teams think. “Where do we get that money if the drivers don’t agree with 15, 20, or 25 million?” The teams will find those answers anyway. That is really not rocket science.
Is Hulkenberg the ideal teammate for Max Verstappen? Tom Coronel, Ruud Dimmers and host Thomas van Groningen discuss it below in the latest RN365 podcast.
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