A little while ago I was contacted by Sports Illustrated magazine to help them out with information for an article they were preparing on F1.
One of the things they were interested in was the drivers’ salaries and how they have been affected by the financial crisis of the last two years.
This isn’t something I’ve really bothered with much in the past, but I did some asking around among people in F1 whose job it is to know this kind of information and I found it quite interesting. What we have here is by no means exhaustive and is based on best estimates of agents, managers and team figures. But it gives you a flavour.
When it comes to money, it seems that like everything else, the team strives to give Sebastian Vettel and Mark Webber equal treatment – they get around €3.5 million each in retainer and so could more than double that on current trends of results this season. Webber has won four races and leads the championship, while Vettel has won twice and is well within striking distance in the title race. But from my experience of the pair, I don’t think money is that strong a motivation. I think they are both highly motivated to win races and clinch the title with this exceptional car.
Towards the end of last season there was quite a bit of driver movement and the teams were trying hard to drive down the cost of retainers. It took place against the backdrop of the global financial crisis and the withdrawal of big spenders Toyota and BMW from the sport. The teams agreed a Resource Restriction Agreement, which does not include driver salaries or marketing, but you could tell that they were keen to get a grip on high retainers.
The driver’s agents were sharing information so that they didn’t get the wool pulled over their eyes. They and their clients were however forced to accept that retainers had to come down as part of a wider cost cutting programme, which has seen costs slashed in F1.
Lewis Hamilton was lucky to escape this squeeze, as his five year deal was signed at the peak of the economic cycle in Autumn 2007, after his sensational debut season. The total value of his contract is understood to be €50 million. He also has endorsements with Bombardier jets and Reebok totalling around €3 mill per year. So he could be described as ‘recession proof’.
Another big earner is obviously Fernando Alonso – he is quite difficult to assess as it’s hard to say how much of his retainer is paid by Ferrari and how much by Santander. The best estimates of the driver agents out there puts him on between €12m to 15m per season.
Felipe Massa has just renewed his Ferrari contract for two more seasons starting in 2011. His current three year deal was struck at the peak in 2007 and is a whopping €12 mill a year. I’m not sure whether he’s been able to keep it at that level, it may well be that he’s had to accept the new financial picture, especially in light of his performances.
Jenson Button moved to McLaren as world champion from Brawn for several reasons, which had to do with all kinds of things, including a dispute over a chassis. He is paid €8 million a year by McLaren – this is an increase on the approx €3 mill he received last year from Brawn but he was on around €7-8m in the Honda days.
Still one of the drivers collecting the most from an F1 team is Kimi Raikkonen, even though he’s not racing in F1 any more. His severance package from Ferrari for 2010 was €19 million, with a clause that if he found other employment the income would be offset. He is retained by Red Bull/Citroen at around €10m per year, so Ferrari pays €9 million. In the good old days Raikkonen was earning over €30 million a year from Ferrari. One wonders how long it will be before we see those kinds of salaries again. This is three times more than the most highly paid footballer.
Michael Schumacher is hard to assess, as Mercedes insist that he is not being paid the enormous sums he got in the Ferrari days, which was in excess of €25 million. His presence in the team has helped them to attract sponsors, so it’s unlikely he will be earning less than €10 million.
Most of the top seats are already confirmed for next year so there are likely to be very few major driver negotiations this year. It’s a quiet year for big driver deals.