The teams in Formula 1 have reached an agreement in principle on a salary ceiling for the drivers, reports Motorsport.com Wednesday. There will probably also be cuts in the wages of the highest paid employees.
The exact amounts have yet to be determined, but according to the provisional plan, two drivers together should only earn a maximum of 30 million dollars (25.5 million euros). The teams can divide that amount as they see fit, so that one driver can earn more than another.
The three highest paid employees per team will probably also have to hand in money. The plans were discussed on Monday in a meeting with all team bosses. Everyone reportedly agreed, but all details have yet to be finalized.
Teams seem to be able to get out of the salary ceiling in the coming years. According to Motorsport.com the financial agreements in contracts that continue up to and including 2023 (or beyond) must be respected. This applies to all commitments entered into before the rules have been formally established.
Max Verstappen extended his contract with Red Bull Racing at the beginning of this year until 2023. Lewis Hamilton is currently the highest paid driver in Formula 1, but his contract with Mercedes will expire after this season. If the Briton chooses to extend his contract until 2023 and he does so before the rules are official, then the salary cap will not apply to him in the coming years.
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Lewis Hamilton’s contract with Mercedes expires after this season. (Photo: ANP)
Driver’s salary ceiling is in addition to the budget ceiling
The plan for a driver salary cap is in addition to the overall budget cap that will be introduced next year. Formula 1 considers it necessary to cut back due to the corona crisis.
Formula 1 teams may only spend 145 million dollars (131 million euros) in 2021. Salaries of drivers and top employees were initially excluded, but with the upcoming salary ceiling, there is still a solution.
Reportedly, teams will not be officially prohibited from paying more than 25.5 million euros in salary to the two drivers. Race stables may exceed that limit, but then the difference will be deducted from the total budget of 131 million euros.
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