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Ron Dennis sheds light on Hamilton contract talks
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Posted By: James Allen  |  11 Jun 2012   |  9:38 am GMT  |  254 comments

There has been a lot of talk in recent weeks about championship leader Lewis Hamilton’s next F1 contract, with his long term deal with McLaren due to expire at the end of this season.

Hamilton is now managed by Simon Fuller’s XIX entertainment group and clearly the next contract for Hamilton is an important one, both financially and in terms of his competitiveness.

Yesterday McLaren group chairman Ron Dennis shed some light on how they see it, in an interview on Sky,

“It’s a complex situation,” said Dennis. “He is on the end of a contract which was signed a at a time when the economy was somewhat different. Now there has to be a balance.

“He’s obviously going to look at what’s available, where could he go. We’re going to look at who’s available. At the end of the day, hopefully the fact that he’s been part of this team from the beginning of his career will play a significant role in whatever decisions both sides make. But it’s a little early to be talking about it.

“He’s very highly paid,” Dennis added, “He’s certainly paid more than I am.”

Hamilton signed on to race for McLaren in 2007 and after a stunning debut season he inked a longer contract to the end of 2012. The world economy was indeed in a boom at the time and McLaren also had Mercedes Benz as a partner and shareholder.

Since then the global financial crisis and the departure of Mercedes as a shareholder in 2009 means that McLaren is in a different place.

Although it is set to receive a boost to its share of income from the commercial rights of the sport, with the agreement it made with FOM in March, McLaren clearly feel that they are in a reasonable position in this contract negotiation round.

Hamilton’s options are Mercedes, who must be looking carefully at him as a replacement for Michael Schumacher and, perhaps less likely, Red Bull, where his presence would electrify things on a marketing level, but would be considered by the racers in the team to be potentially destabilising with Sebastian Vettel. However if they feel that there is a realistic chance of losing Vettel to Ferrari in 2014, then they may move for Hamilton.

Dennis and McLaren F1 team boss Martin Whitmarsh have enormous experience of these kinds of negotiations. Anyone who went through several negotiating rounds with Senna in particular, will have been to hell and back in trying to get the best deal for the team.

One solution may be for Hamilton to be allowed to have his own sponsors, something the team has been reluctant to do since Ayrton Senna had Nacional bank on his overalls and cap.

Hamilton’s win yesterday was his 18th in 97 starts. According to GP Guide.com he has an 18.56% win ratio and a 47.4% podium/starts ratio.

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1

Lewis will only stay if he has a winning car all the cockups in the pit lane are sorted I don’t think money talks he is a passionAte racer with all the fanese and makes formula one all the drivers should be grateful to him he has made f1 more watchable and exiiting so what ever team he goes to it will be money well spent. Theres no one out there who can better Lewis on the track you either have it or you don’t no money can buy that .hea what Mohammed did for boxing he’s done for racing, fay bristol

2

Funny isn’t it?

Soooooooooooo many drivers wish to join top teams like McLaren, even more wish to simply drive in F1 as their career. He’s lucky enough to be in F1, especially in a top team straight away, yet Hamilton is the only one who’s considering not wanting to be there?!

He really needs to be told how mighty lucky he is. I wish F1 is my career and driving for McLaren.

3

How mighty lucky he is? That’s like saying Kobe Bryant is lucky to have the Lakers.

It’s the other way around, my friend. Hamilton is a rare talent and he’s McLaren’s best shot at another WDC and WCC, given Button’s lackluster performance as of late.

And as Fantomius wrote earlier, Hamilton’s sheer skill set would’ve guaranteed him a driver’s spot regardless. I’d hate to see Hamilton leave, but if McLaren doesn’t improve their support system, he’s got no choice.

4

You’re surely right in general terms, but your point is a bit unrealistic. I mean, everyone would be happy even to drive a f1 car, but Hamilton is a rare talent. He would have been in Formula 1 in any case, sooner or later, even without McLaren support. And drivers like him could’n accept to drive. They want to race. And win. Why Alonso isn’t stayed at Renault? He was lucky, too, wasn’t he?

5

My point is more focused on being a top team, which Hamilton is currently having the luxury of being in. Alonso’s Renault was in a decline.

6

The point for me, is not the amount of money, which for sure is massive. The point is Hamilton is paid something like 15-20 millions euros per year and Alonso (reportedly) 30 millions… So, how the hell could a a younger and faster driver accept to get paid nearly a half of an older less-quick colleague?? And, even though Ron’s arguments are reasonable, how can he “complain” money issues after having resigned Button’s contract in 2011 (one year ago!)for 12 millions euros per season?? If they have 12 millions for Button, they HAVE to find out at least 24-25 for Lewis. Or they will end to be a “Button-team”. Good, but not enough. Losers.

7

Lewis wiill end up at Red Bull – for many reasons; if he has any common sense. The ”drinks company” are the ones most likely to provide him with a championship winning car. Even if McLaren can provide a car competitive enough to win the title next season, they will make a meal of it via their less than sharp strategies and uneccessay errors. Red Bull have shown it’s strategy is often at the sharp end more often than not in the past 3 seasons whilst McLaren make life difficult for themselves – even when Big Ron was there (Ron lost him a championship in China by not pitting him when it was clear that his tyres were shot).

Also, from a marketing perspective, Red Bull would be insane if they do not have plans to sign Lewis at some point in the future. Lewis has the box office draw, he single handedly put F1 on the map for many casual fans, and is the best known F1 driver outside of Europe. In fact, if you mention F1 anywhere in Africa, Lewis’s name immediately crops up, followed only by a certain Messrs Schumacher. He is the first black F1 driver, the Tiger Woods of F1. He has the superstar girlfriend, and counts Hollywood stars as his friends. His image is young, vibrant and dynamic. If this combo cannot sell fizzy energy drinks whose brand is marketed as young vibrant and dynamic – then nothing can. It would be a particularly explosive synergy.

The Red Bull owner is not stupid. The primary purpose of the company is to sell more drinks, and Lewis can do this over and above any driver on the grid – far more than Vettel can. Add to the fact that he is just as likely to win them a championship as Vettel, then the decision to pursue him becomes a no brainer.

Lewis has also indicated he is happy to face Vettel or indeed Alonso in the same car, but they both dont seem less tha enthusiatic about the prospect, as it would present a clear threat their number one status in their prospective teams – and Horner even seems more scared than Vettel is.

Lewis only has 2 options – Red Bull or McLaren. The crunch will be based on if McLaren allow him to have his own sponsors. Lewis wants to win more championships and has already indicated several times that he would gladly take a pay cut if he could get a championship winning car. Red Bull can give it to him, and so can McLaren (if they stop tripping over themselves). But there is brand Lewis to contend with. IMO this is the big elephant in the room. With Red Bull, he can get a big pay day, probably get a winning car, but no brand Lewis. With McLaren, they are already fudging on the big payday, and the winning car is more of a hit and miss . So if he resigns with McLaren, he may have to take a salary less than at Red Bull, and no guarantee of no strategy cock-ups as is the norm for McLaren – so it will all come down to if he is allowed to develop his brand. Imagine Lewis doing a Pepsi or Coke advert!

8

XIX/Fuller are very shrewd. I wouldn’t be surprised if they have already made contact with McLaren sponsors. Some of them are there because of the global exposure Hamilton has. (Button isn’t marketable this year).

McLaren are taking a big risk by asking Hamilton to take a pay cut, because if he does leave, the net result may cost them as the sponsorship money will follow wherever Hamilton goes.

Fuller knows it, thats why they competed for Hamilton’s services, Hamilton knows it, even Dennis knows the sponsorship draw Hamilton brings, he’s just playing hard ball, trying to lower Hamilton’s expectations, but he’s dealing with the wrong guys (XIX).

9

Didn’t Ron promise Lewis a McLaren F1 if he wins another title? It’s very likely if Lewis chooses to stay he’d win another title with them.

Lewis don’t want that now and prefer SLS AMG / Red Bull drinks / a Ferrari supercar?

I’d pick the McLaren F1 any day! 😀 😀 😀

10
Mike from Colombia

James, it seems that there are some parallels with the Senna negotiations in 1993:

a) Global recession

b) Star driver has not won the title for the last 2 years (3 years in Hamilton’s case)

c) McLaren had just produced its first road car the McLaren F1 a year earlier

d) McLaren was seeking a new engine partner

I can distinctly remember a interview with Ron Dennis where he reflects that Senna’s salary demands were deflecting resources from the rest of the company.

McLaren is a much bigger team now and driver salaries must be a lower % of the overall budget.

It would be great if someone could try to find the words from the Ronster’s interview – if only to get an insight as to how he thinks when negotiating.

11

Remember his anguish when Senna left, as is very clear in the Senna movie.

12

Well, let’s see later this year what Webber and Schumacher decide on.

13

I think Hamilton should change teams. We can await to see however 2012 engs but regardless of success or not, he would benefit from a change IMO.

Perhaps racing drivers think differently, but I would think that after 3 years of trying perhaps both Hamilton and McLaren need a fresh start.

For instance, his presence at Mercedes could shake that team up a bit and give Hamilton a new type of challenge.

Red Bull would be a more short term thing for success, but would be more interesting for fans.

None of this could be the most copmetitve option for Lewis, but how much more of his career can he do the same thing at McLaren?

If he won a championship in 2012 then the case for a fresh start is even more justified.

14

One thing to consider is that Lewis may feel the new to ‘prove’ himself outside of McLaren.

Obviously as a one time WDC he doesn’t really have anything to prove, but it probably niggles a little bit all this McLaren protégé business, team built around him, relationship with Ron etc.

Therefore he might be tempted to move elsewhere just to show that he can do it at another team, even if pure logical reasoning concludes that staying at McLaren makes the most sense.

In the Senna film Ron Dennis makes the point that when Senna moved to Williams he felt that Senna underestimated the impact of leaving the ‘family’ at McLaren and working with a bunch of new guys who don’t really know you and aren’t plugged into your mindset etc. Putting competitiveness to one side (or lack of it) he saw a man less happy than before.

This is a good point really. When the differences in performance are as marginal as they are now between Red Bull, Ferrari and McLaren why take both the risk in moving and the pain of integrating into a new team?

Protracted negotiations may well help McLaren because I see Lewis winning 2 out of the next 5 races and if that happens he will likely have a decent lead in the WDC and it will make the decision to stay at McLaren all the easier.

15

Similar to Vettel’s situation with Red Bull, growing up with that team. I reckon Hamilton will flourish in new surroundings, but where can he go? That said, I think what Dennis said indicates that they’ve already lost him; I just don’t know if there’s a better drive out there for him. Somehow, I think Kimi would be a better fit at Red Bull, personality wise, with Vettel, and Hamilton could go to Bennetton/Toleman.

16

Interesting point. Probably more significant is the sheer level of competition now.

He has to beat Alonso and Vettel, both ultra high calibre drivers, not to mention drivers like Button, Webber, Rosberg who are also winners. Then there’s Raikkonen, Schumacher and the upcoming guys. It’s a competitive time to be a top GP driver…

Compare it to mid 1990s, or early 2000s for example..

17

Another thing to consider is whether Hamilton will be WDC, as then, his bargaining power will be that much higher.

For what it is worth, I believe he’s waiting to see what develops through the season, is being guided well, and will make a decision based on what team will give him the best chance of more race wins; I believe he thinks more about the legacy he will leave, than the money he has, for lets face it, he’s an incredibly wealthy young man, and, accidents aside, probably has another 9 to 10 years in the sport, so has plenty of time to build on his little nest egg.

I also see him at Ferrari, but probably when he hits his peak, which he hasn’t, in 4 years time.

As for people denying the lad has talent, well, you’re obviously not students of the sport, for he’s exceptional, and defintely dines from the top table.

18

Hi James,

Slightly off topic but inline with your comments re outside sponsorship for Hamilton and Aryton Senna’s Nacional baseball cap…Why is it that Paul Di Resta never wears a baseball cap? Admittadly his teammate Hulkenberg wears one for personal sponsorship reasons, but Di Resta never even wears a team cap! Seems quite unusual…

19

Kingfisher has insufficient funds to make one for each driver heh

20

“Cap-gate” beckons…

21

Good question.

22

90% sure that LH will remain at McLaren. Not many options available to him. Ferrari a no go because of Alonso (and the chance that Vettel could land up in Ferrari). Mercedes is an option BUT they haven’t got it all together! Mercedes in definitely improving BUT lack the final “wow” factor! Maybe – just maybe LH is what Mercedes needs next year! Will wait and see! LH will not be going to Red Bull unless Vettel jumps ship!

Looks more likely that LH will renew his stay at McLaren (probably a one/two year deal – with performance related clauses)

2014 is when we will see big changes in the driver market!

23

So Ron is actually saying, ‘we want him but he is demanding unreasonable money’.

As much as I dislike Lewis personally – he seems quite weak and shallow character-wise, his driving skills are absolutely fantastic.

I just hope that XIX is not pushing him to go where the biggest pot of money is.

Hopefully Lewis will surprise me and accept the best prospect drive-wise rather than salary-wise.

24

I wonder if McLaren are regretting the 3 year contract they signed with Button last year.

25

MW must be ripping his hair out!

26

So Ron goes from offering 5m more to stay last week to saying that there is not any more money. Definitely someone on the weaker side of the negotiating table. Of course Mclaren wil win races without Lewis, but not as many as if he stayed while he is racing. Not sure how sensible it would be for Lewis to leave before the big regulation change in a couple of seasons. He only needs to look to his idol to see that. Senna quickly realised that Williams were not invincible once all the gadgets were banned on the car. That said I reckon he will go to Red Bull if he gets the chance. Which I think could be like Prost and Senna at Mclaren all over again.

Lewis’ management are likely to gain additional revenue streams which is the only way he will truely earn a fortune (relatively of course, as he already is). Clearly Ron Dennis is aware of how much that would cost which is why they are against it. Also I suspect Lewiswill cut down on his Mclaren duties as he has expressed this previously.

Regarding Schui I think the relationship is with Ross rather than Ferrari. Can see Vettel going there in time, but will not be for a while.

27
Mike from Colombia

As long as Alonso and Vettel will not move over – McLaren does not have a leg to stand on in terms of negotiation at the moment.

Hamilton is too valuable an asset for them – bith as a driver and an attraction for sponsors.

Could you really see sponsors lining up to be part of the “exciting” line up of Jenson Buttonas No.1 driver along with Paul “one pit-stop only” Di Resta?

If Hamilton goes then Vodafone have a good case of not paying as much money for sponsorship going forward.

Fuller might be a great marketing man, but how good a negotiator is he? He is an enigma. His last foray into F1 was the baffling “my earth dream”.

And why XIX entertainment. Why the obsession with 19…is this the average age of the reality show contestant that it exploits?

If Hamilton goes then McLaren’s sponsors will be none too pleased and will feel that they are paying to sponsor a B team driver pairing. What about the McLaren brand itself with its road car programme? How much would this be devalued without having a top level driver in the team.

An unhappy and undervalued Hamilton is of no use to the team either. McLaren will have to pay.

James, I am sure that I have heard Dennis repeat very similar words about Ayrton Senna’s salary in 1993-1994. If anyone can find them then it would be great to compare them wit what he is saying today.

28
Mike from Colombia

My messages have not been going through for over a month – hopefully changing my name will help

29

Hooray!

30

Lewis will sign a one year extended contract, then move to Mercedes

31

Having read all the comments, I think LH is best placed to stay at McLaren until his second title (if it comes!).

If Mercedes weren’t so tepid about their future involvement in the sport, I think Lewis and Nico would be a phenomenal duo.

But I can’t see Ferrari or Red Bull offering a better bet than what he has now at Macca.

Unless Uncle Roman decides to invest BIG in Sauber next year, alongside Carlos Slim. Then you could be talking about a whole new ball game.

32

I think Weber will go to Ferrari, KImi will go to RB. Paul-de-resta will be Nico’s team mate at Merc. Ham to stay put

33

I wonder if LH will want to wait to see if he wins the WDC before making a decision. If he can get a second title maybe he will be more willing to go to a team not quite consistently in the top tier (Merc or Lotus), if no second WDC maybe he will rather be at McLaren. He may see them as having a better chance for a championship.

Though it would be fun to see him at Ferrari in the same car as Alonso. Imagine an entire season of who is faster debate: Alonso or Hamilton.

34

I think we’ve witnessed they are both just as fast in 2007, it’ll be a question of who’s the #1 lol. Could be a shared #1 which’d be pretty stupid but entertaining for us to watch heh 😀

35

Cant help but think that choosing XIX was a poor decision that reflects the Hamilton who likes the celebs and fame, rather than when he first came to F1 to be the best and smash records.

36

I think it is a bit of posturing on both sides, but I think the reality is that currently they need each other. Arguably McLaren have made a lot of mistakes plus designed some indifferent cars over the last three years. If Lewis did leave it would be Red Bull or Ferrari, Mercedes have not shown they can produce a proper front running car not to be confused with a car that’s got to or near the front due to set up and balance.

37

I think Hamilton will stay as its the best option for him, but I think McLaren have an issue in that if he did leave, the list of candidates to replace him is so short. There is Di Resta, which is very possible, but there is still the issue that Mercedes might want to keep hold of him. Other than that, Kobayashi?? I can’t think of anyone else who isn’t tied up/they would be interested in.

A line up with Button with his current problems, and Kobayashi who whilst great and should win races (but a championship would be a stretch), but is looking increasingly like the number 2 is a pretty weak line up.

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