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Formula One is already reducing how much teams can spend to win the world race series that develop cars. Now they’re looking at tens of millions of dollars paid to superstar drivers like Lewis Hamilton.
The Federation Internationale de l’Automobile, the Paris regulator, is talking about a possible salary cap for F1-owned Liberty Media, sports teams and drivers who are ready to return to the Monaco Grand Prix after the 2020 race. canceled due to pandemic.
“The details of such a regulation are still at a very early stage of discussion and at this time no conclusions have been drawn about the specifics or whether this is something we will continue to pursue,” the FIA told the Financial Times.
Discussions came last year after agreeing on a limit on group spending, along with an agreement to distribute revenue evenly. A figure discussed by race leaders is split between two $ 30 million drivers each year, and they pose a mess for top drivers such as Hamilton, whose salary exceeds that number.
Otmar Szafnauer, team director Aston Martin F1 team, said one way cap “makes sense because you’re trying to waste money when you’re making sense [racing] performance and driving is a big part of performance ”. He suggested that teams should have the flexibility to pay drivers more if they reduce spending elsewhere.
Further tightening of financial regulations would mark the next step in the F1 transformation owned by Liberty Media, the investment vehicle of US billionaire John Malone, who bought F1 for $ 8 billion in 2017.
This season is the first to agree on a new cost of $ 145,000, which was agreed last year and aims to limit the extent to which Mercedes, Red Bull and Ferrari can overcome their rivalry in order to win.
Cap and wider The Concorde agreement, which regulates how F1 distributes revenue It was agreed in 2020 after a three-year battle between Liberty Media and the teams. But the limit, which will drop by an additional $ 10 million over the next two seasons, excludes salaries paid to drivers and the first three employees, as attention has now shifted.
A person close to F1 said the reason for the driver to constantly focus on cost control is to balance the “system” so [the] the best drivers could be attracted to other teams by reducing overall F1 spending ”.
Zak Brown, the general manager of McLaren Racing, said that a cap does not necessarily mean that drivers ’salaries will go down. One option, he said, would be to increase the group’s budget limit, for example, by limiting $ 30 million to include an allowance for driver contracts. The team would be free to sacrifice costs elsewhere to pay drivers more. Similar measures could be applied to the salaries of senior employees.
“This is something that all teams have discussed,” Brown said. “It’s important to make sure the sport doesn’t return to its bad habits, so if you still have some items sitting outside the sports-related sports cap, it looks like we have unfinished work.”
Investors have been throwing money at the sport for the past year Williams team changing by hand and McLaren has raised £ 185 million from MSP Sports Capital, as the pandemic disrupted the 2020 season and earned team income.
McLaren Racing chief Zak Brown says the cap will not necessarily lower drivers’ salaries © Jean-Francois Monier / AFP / Getty
But imposing limits on drivers ’salaries in the name of financial sustainability threatens a new rift within F1 after negotiating a wider cost cap. “Of course, when you put this on the table, drivers have a very negative reaction,” said Alejandro Agage, founder of the Formula E and Extreme E electric car racing competitions.
Teams need to balance the need to reduce costs against the risk of distracting star drivers who attract sponsors, fans and the media.
“I don’t know if it’s safe to bring [drivers] below the cost limit, “said Damon Hill, who won the world championship with Williams in 1996 for FT.” The driver’s career is short. “
Hamilton, who this week called F1 a “multimillion-dollar boys’ club ”that called for the sport to be more inclusive and accessible, has expressed concern about the salary cap.
The British star, who has been in the middle of seven constructors ’championships following Mercedes, is ready to negotiate a new contract. At 36, he is in the final stages of his career.
A person close to Mercedes said the cap would not matter to Hamilton as he won a joint F1 world seven-a-side record while continuing the race.
Although Mercedes allows the introduction of a soft cap, main team Toto Wolff he said any changes should be introduced from 2024 to prevent the loss of the sport’s “stars”.
The bet is also big for Red Bull, who believes in 23-year-old Max Verstappen to win his first championship since 2013.
“We understand the shared responsibility to reduce costs in all areas and are part of the discussions, but it is a decision that requires a balanced approach and agreement for all teams, which has not yet been achieved,” Red Bull said. “We also need to consider the athletes involved, as this directly affects the teams.”
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Wage limits are complex and difficult for police, according to several senior sports people, who warned that there are many ways to circumvent the rules, such as asking sponsors to cover drivers ’salaries.
The pay limit is also complicated, as team managers often have responsibilities beyond their organization’s F1 outfits, which means they can be paid by different parts of a larger group of parents. “It’s very difficult,” Agage said. “There are several ways around a salary cap.”
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