Mercedes Formula 1 boss Toto Wolff believes it is untenable for a cost-capped F1 not to have a driver salary limit – and hints it would need to be even lower that what had been mooted in the original proposal.
An initial proposal of a $30million driver salary limit came about back in 2020 as F1 brainstormed ways of cost-saving in addition to its new overall cost cap – which excludes driver salaries, as well as those of the top three earners in the team.
Talk of the the aforementioned limit went quiet for a long period but has now re-entered the public agenda – and pretty much every driver asked about it in Baku voiced their ardent opposition, citing that F1 is currently growing in popularity and that capped salaries in F1 could create a knock-on effect of junior drivers struggling to find sponsorship due to limits on backers’ longer-term return on investment.
Speaking on Saturday in Baku, however, Wolff indicated that even the proposed driver salary limit numbers were too far out of proportion with the current cost cap, which for 2022 stands at $141million.
“Certainly it has come up as a controversial topic, we can see that we’re facing a very difficult situation in Formula 1 overall, the sport is booming and Formula 1 is earning more money and that is trickling down to the teams, but we have a cost cap,” Wolff said.
“We have $140million for 1000 people, with inflation, we haven’t even been able to pay the inflation. And I think the talk about [even a] $30-40million salary allowance is inadequate when you take that perspective.
“Now clearly drivers will have an opinion on that, and maybe as a driver, I’d say the same thing. But the US leagues that are the most successful in the world have introduced salary caps 15 years ago, it works pretty well over there.”
Haas team principal Guenther Steiner echoed Wolff’s suggestion that F1 should “learn lessons from these American big-league sports” on how to limit the stars’ salaries.
Of those US championships, the National Football League and the National Hockey League have hard salary caps, while the National Basketball Association allows cap breaches in certain circumstances. Major League Baseball has no salary cap but rather a luxury tax, in which teams are forced to contribute extra money if their payroll exceeds a certain threshold.
The cap figure in US leagues results from collective bargaining between a players’ union and the league/teams. And that collective bargaining also yields a mandated minimum salary, and sometimes an overall salary floor for a team.
“Formula 1 is looking at it without an immediate solution to it,” Wolff continued. “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’s certainly clear it’s going to be one of the main areas because you can’t simply have a [driver] salary bill in some of the top teams that is $30/40/50million when the rest of the team has to be divided by $140million.
“Having said that, they [the drivers] are tremendous superstars, they deserve to be among the top earners in the sport in terms of direct salaries. They already are.
“And then we need to find a way of unlocking the endorsement, the capability of doing endorsement deals, which is two-thirds, if not more, [of sportspeople earnings] for US American sport teams – but direct salaries, Formula 1 drivers are paid the most.”
The proposal that gained traction within F1 is that of a driver salary allowance rather than a cap – which would mean that a team could pay their drivers above the allowance as long as the excess funds came out of the team cost cap figure.
Wolff also made clear that he wanted to see the top three non-driver earners’ within the team – currently not incorporated in the cost cap – have their salaries limited.
Ferrari’s Mattia Binotto, who was widely in agreement with Wolff’s stance, cautioned that any movement on the driver salary cap wouldn’t be swift – and that it was not an “urgent” matter.
F1 already has many drivers contracted beyond even the upcoming 2023 season, while Red Bull’s Max Verstappen is on a big-money deal through to the end of 2028.
“It’s a tricky one, I’m not sure there’s a solution to be honest,” Binotto said of a driver salary limit.
“It’s not only a tricky one – it’s not an urgent one, and the reason why is that the salary cap for drivers will only affect three or four teams maximum teams, no more than that.
“Those teams that will be affected already have long-term agreements with their drivers. So long that it’s not something that we need to put in place for next year. It will not be before 2026.”
