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What's an F1 driver worth?
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What's an F1 driver worth?
Posted By:   |  26 Jan 2009   |  1:55 pm GMT  |  0 comments

Nick Heidfeld, ever the pragmatist, is quoted today saying that if drivers are to be asked to take a pay cut, so be it, ” We have to adjust ourselves just like everyone else.” Actually Nick is pretty good value at approximately £2.8 million per season. It’s the £30 odd million Raikkonen gets or the £20 million Alonso scoops up, which give the eye catching numbers. The average, according to Formula Money, is £5.5 million. So what are the drivers worth in the current economic climate?

I wrote a post here on Friday about the cost of superlicences and the drivers complaining about the increase in price again this season. To some this is a non-story, but if you look at the comment which is coming out of the drivers and also from Bernie Ecclestone about salaries, there’s no doubt in my mind that this is all starting to come to a head. The licence furore serves to highlight the fact that they are extremely well paid, that puts it on the news agenda and a debate about driver salary caps ensues, as it does from the ongoing debate about cost reduction. The drivers are starting to be caught in a pincer movement.

With teams slashing costs, cutting testing, going for long life engines and gearboxes, the savings already made are significant and yet sitting there on the balance sheet is this whopping great cost – the drivers’ salary. The lucky drivers are contracted forwards for a few years yet, like Lewis Hamilton who is only a year into a five year deal. Kimi Raikkonen is sitting on a contract which was extended last season to the end of 2010. They would have to agree to accept a pay cut, I cannot see how they could have one forced on them as they surely have a contract with payment schedules.

It’s not hard to see why the teams would love to get the costs of drivers down, but the irony is that the more they change the rules to standardise things and cut costs out of making and running the cars, the more important the faster driver becomes…and therefore the more valuable. And now with more things for the driver to do in the car, thanks to adjustible front wings and KERS, the premium on drivers becomes even higher.

But as ever with F1 it’s not as simple as that. Many argue that the most important part of a car is ‘the nut who holds the wheel’ and that is why driver salaries are high – for the best drivers at least. But nowadays a large part of the driver’s salary also reflects his image rights and his use as a marketing face for the brands which associate with his team.

Lewis Hamilton was up in the Midlands last week at a branch of Alliance and Leicester, now owned by Santander/Abbey, helping to draw attention to that fact.

Expect a lot more on this salary story as the season goes on.

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  1. Vincent Syson says:

    It would perhaps be unreasonable to expect the drivers to be paid less starting from next season, but hopefully the teams can somehow phase out this ‘super contract’ era over the next few years. I always find it unjust that some mediocre footballers can be paid £80,000 a week, but then again Kimi Raikkonen, who had an undeniably mediocre 2008, is being paid about 6 times that much. Footballers seem poor in comparison!

  2. dave the chef says:

    in this year of cut backs, crisis etc etc F1 in their wisdom has reduced the testing, no testing in the race season.
    Great for cost cutting , not so great for members of a test team who are forced to take reduced pay, redundancy etc.
    Are our so called pinnacle of racers taking a pay cut as they are not required to do any mid season testing like in previous years.
    wouldn’t it be great for humanity if an f1 driver gave up a small piece of his massive salary to save a few jobs in his team. Its teamwork i believe, better he spends it on his mooring fees in Monaco.
    Long live no testing say our supreme F1 drivers

  3. Chris says:

    I’m a big GP fan and understand drivers will always get paid a fortune compared to what we do. But I think it is unreasonable to think that drivers or any sportsmen are above the worlds economic climate.

    Companies all over the world are laying off staff and or implementing wage cuts. I don’t see why sport should be any different.

    I agree with James that this is a bit of a non story. The super licence does sound expensive. But as much as I’m a fan and love the sport and all that surrounds it, I’m not going to loose any sleep over whether Alonso or Raikkonen can afford their mortgage or put petrol in their car because times are hard.

  4. Andrew Fovargue says:

    I don’t believe a ceiling should be set on drivers’ salaries, provided it’s above minimum wage the employee / employer should be allowed a free rein to work on whatever terms they want.

    If the very best drivers carry a 0.3 sec per lap advantage over the field, that has to be invaluable? How much do you have to spend on R&D to get that back? More than a driver’s salary, I’d guess.

    Frank Williams had it right in the early 90s though – Build the best car and you’ll get it driven for peanuts.

  5. murray de schot says:

    In essence, the question over whether to reduce Drivers’ Salaries is largely a pointless one.

    We should bear in mind that a driver’s earnings are NOT solely dependent on the retainer they receive from their teams in the large.

    Instead, their wealth is fortified by personal sponsorship, personal appearances, merchandising and licencing deals and endorsements.

    That aside, their day-to-day clothing is profided – in the whole – free of charge. Their watches, if not paid to wear them, will at least bear their name in an exclusive agreement with the watch manufacturer, which reaps it’s own financial revenue stream for the drivers concerned. Likewise, sunglass companies are queing up at their business manager’s doors. The Superyachts and powerboats in the Med will no doubt be supplied at cost (at most!), in return for a few photos and handshakes given out at strategic boating shows. Likewise, the latest private jet or helicopter. Oh, and, of course, the day-to-day car will, quite naturally, be supplied by whichever motoring manufacturer has an alliegance to their team.

    Outwith all that, there is of course, the not-so-inconsequential matter of the investment returns that are made through hard-cash millions.

    In one interview I read about, in America in 1997 Willi Weber stated in a US Television Programme he estimated Michael Schumacher THAT year (1997 remember!) would earn $100 million!

    To top it all, 90% of the grid are ensconsed (or at least registered as living) in Tax Havens.

    Don’t cry for the drivers taking paycuts of a million or two. They’ll still have VERY restful nights sleep!

  6. Matt says:

    Hey James, I did believe your writing skills are far than the average columnist and even your commenting skills yet I have to say I’m changing my ideas.

    Firstly it’s known that Raikkonen has a contract that will expire at the end of 2010 rather than 2011. Or, perhaps you have an well connected insiders in Ferrari that tells you he has just got a new contract from Luca!

    Another thing is, the guy who used to get 2.8m pounds in the team is Kubica rather than Heidfeld. Nick got about 11m euro last year.

    Guy you are just disappoint your fellow guys!

  7. speedmerchants says:

    JA writes: Raikkonen’s deal was indeed extended to end of 2010, hence all my stories about Alonso’s deal tere being for 2011 – that was a typo in my original post on this topic saying 2011 – thanks to Matt for spotting it. However, Matt, as to Heidfeld’s salary, I don’t think he’s on anything like €11 million. The figure I got was from Formula Money, which is usually pretty good on these things.

  8. Boston F1 Fan says:

    - I have no problem with them being paid this much, and if in the current climate a corporate sponsor is against it, they should pull out. I believe that Honda made the correct decision in pulling out of F1; they were laying off workers, ending the livelihoods of hundreds of people and could no longer fathom the cost of the team as well as Jenson’s exorbitant salary.

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