Should F1 drivers take pay cuts?

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Kimi Raikkonen is believed to be F1\'s highest-paid driver
Kimi Raikkonen is believed to be F1's highest-paid driver

NASCAR star Jeff Gordon has offered to take a pay cut to ease the strain on his team during the financial crisis:

I’ll do whatever it takes for us to have the best team we can possibly have. If that means take part of my salary to keep certain people on… I would be open to it. I never got into this to make millions of dollars.

Is it time Kimi Raikkonen, Lewis Hamilton and F1’s other big earners followed Gordon’s lead?

The exact sums earned by F1’s top drivers are often speculated on but rarely known for certain. However the elite F1 drivers certainly command eight-figure salaries, and that goes for world champions Kimi Raikkonen, Lewis Hamilton and Fernando Alonso plus many of their rivals.

Max Mosley wants to cut F1 teams’ budgets to $20-40m – around a tenth of what they are now. But if that’s going to happen, surely the drivers will have to take pay cuts?

Frank Williams is sceptical about that ever happening:

Drivers? salaries are the one major snag, an area not addressed in the teams? unified decision to reduce spending. If McLaren don?t want to pay Hamilton ??15m, then someone else will. Any suggestion of a gentleman?s agreement on this would never happen.

It seems to me the only way this would happen would be if the Grand Prix Drivers’ Association agreed all its members would offer to take pay cuts. And even then it wouldn’t have much of an effect on drivers who are expected to bring money to their teams, such as whoever Toro Rosso puts in its cars next year.

Are F1’s mega-salaries here to stay? Which F1 drivers are overpaid? Have your say in the comments.

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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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27 comments on “Should F1 drivers take pay cuts?”

  1. Nearly every professional sport in the US has some sort of ‘salary cap’, that is the maximum amount any one team can pay for all if it’s players combined salaries.

    The scenario runs into some snags due to each team having only two drivers however. In most salary capped sports, the “Lewis Hamiltons” are just given large salaries at the expense of the lesser players on the team. Perhaps in F1 it would just make sense to have a ‘per-driver’ cap?

    Or, perhaps you simply ignore the issue and just join it with the team budgets. That would give each team the choice of spending their $$$ on good drivers or good cars. THAT would make for some interesting racing…

  2. Supply and demand… I think it will all work it’s self out in the end…

  3. Why take a pay cut if your teams isn’t having trouble?

  4. SuperKarateMonkeyDeathCar
    11th December 2008, 16:36

    One thing not mentioned in the article is that Gordon is part owner of the team, so he has a greater interest in the team’s bottom line than any of the other drivers at Hendrick.

  5. From what I gather, driver pay will be out of any agreement reached concerning reducing costs. It’s up to a team to decide how much a driver is worth. Lewis isn’t earning as much as Kimi or Alonso.

  6. Good point from SuperKarate which I was also going to make. Also, Keith, the problem with your GPDA idea would be that two of the drivers you mentioned, KR and LH, aren’t even members and I don’t think FM is either! The best teams will continue to employ these 3 and Nando because they’re the best – so I don’t think driver pay cuts are going to happen

  7. Difficult one. Would the cap cover the salary paid by the driver’s team or would it include personal sponsorship and endorsement deals as well? How could teams be prevented from arranging for their main sponsors to pay drivers directly and reduce the amount the goes to the team accordingly? Would benefits in kind count – e.g. Mercedes providing Lewis Hamilton with the use of an SLR or Ferrari covering Felipe Massa’s travelling expenses? Would cross subsidy (the income from a pay driver being used to fund the other driver’s salary) need to be taken into account as well?

    I’m not sure the GPDA idea would work – drivers aren’t required to be members and not all currently are.

  8. SuperKarate – Ah I did not know that (I don’t watch NASCAR).

  9. schumi the greatest
    11th December 2008, 17:02

    i have to agree with what frank williams said, its not too hard to believe that if all the teams made some sort of “gentlemans agreement” to not pay any driver say over £10million a year, someone like ferrari would go and nab hamilton on a massive salary or something!

    i think a budget cap that included everything, driver salaries, manafacturing, designing r&d, oversizes motorhomes, chefs, you name it a complete budget limit for everything!

    quite how the fia would police that i have no idea but i think that is the best way forward

  10. i think a budget cap that included everything, driver salaries, manafacturing, designing r&d, oversizes motorhomes, chefs, you name it a complete budget limit for everything!

    Driver Salaries were not part of cost cutting measure proposed some time back.

    Drivers Salary is Akin to C-Execs Bonuses and Paychecks, the Organization may be limping, but will that stop from execs to make their bucks no.

    In case of drivers though, the teams will bump them off on slightest of excuse or difference of opinions,a lot more happens internally with the team to which we have no visibility. So I wouldn’t blame Drivers to act in their self interest. Charity is not a one way street

  11. Jeff Gordon is half owner with Rick Hendrick of the 48 car driven by 3 time champion Jimmie Johnson. The other 3 cars are owned by Rick Hendrick, possibly in partnership with others.

    Most NASCAR drivers like Gordon make more in outside sponsorship than in salary and race winnings, hence his willingness to give his salary back to the team. Regardless of it’s impact to him personally, he is making a responsible gesture out of loyalty to the team that has made him a millionaire and a 4 time champ.

  12. Chaz is correct.

    Pure market forces are at work here. Whatever they can get, is, by definition, what they deserve. Each team must decide what they can afford, just as each driver needs to “price” his services.

    In fact, the question, “How much should they make?”, is fallacious because there is no established and universally accepted standard to which the word “should” can apply.

    The only parties relevant, indeed necessary, to deciding this issue should be the driver and the team.
    Please, no arbitrators, or judges, or informed committees…

  13. Oliver, Lewis isn’t earning as much as Button unbelievably enough!

  14. Very true S Hughes.

  15. Drivers have relatively short, somewhat risky careers. The best ones would never agree to a salary cap or reduction. Anyway, having “stars” is part of the appeal of the sport.

    This all starts to sound like just a big game of F1 fantasy manager. Give every team the same budget, and out of that, they have to pick an engine, chassis, tyres, and two drivers.

  16. So much focus on Lewis’ salary when actually other drivers are making more than such as Kimi, Alonso, Button….

  17. any salary cap (or salary cuts) would only be possible if some sort of at least gentleman agreement is reached between the FOTA members. otherwise no chance

    in individual cases I can imagine drivers in danger of loosing their seats to accept a cut to make themselves more interesting proposition

    but take for example Button. why would he accept a pay cut now ? whether Honda team finds a buyer or not, Honda would still have to pay him what is in the contract. his salary may not even affect the budget of the new owners of the team if Honda keeps paying that part of the bill. and why would Button want to save Honda some money after what the company did ?

    but at the end it is the same as in any other business. the employer can offer employees less than what they are used to. if they accept, good, if not, both parties have to be prepared to face the consequences. team may loose the driver to competition, drivers may loose the seat

    it does look though that the teams have a bit better negotiating position than drivers these days. the number of seats is limited and there seems to be enough young guns ready to step in if the expensive older quard keeps asking for big money

    but I would not say the drivers are overpaid. they are paid exactlyy as much as the teams think they are worth :-) whether they really are worth that money is another question

  18. Why not just give the teams a fixed budget and allow them to ‘buy’ two drivers with that money. That would make sure that you’d never have 2 top drivers in one team, but would spread the good drivers a lot better.

  19. I guees it depends of the driver. Button salary for this year is probably safe, but he is certainly aware that he goona need to take a huge cut for 2010 whatever car he will be driving. Also there’s drivers with reasons to be loyal to their teams that I imagine would do it if the teams really needs it (let’s say Trulli at Toyota, or even Lewis and Massa) and off course many of the veterans or younger drivers who aren’t very hot names right now would probably accept whatever deal they got (for example, Rosberg or Vettel have no reason to accept a pay cut, but Glock or Sutil do).

  20. Fantastic idea, but no way it happens in F1…..

    I very much like the first comment that mentions many American sports have a salary cap that limits the total payroll of the teams in the sport. The NFL and NBA use this to great result- the big-market clubs naturally grab many of the top free agents after their first contracts are up, but good management and coaching ensures that small-market teams can compete. As an example, see the Pittsburg Steelers. While playing in one of the NFL’s smallest markets, their passionate fans and brilliant ownership see that the team is always in the playoff mix.

    The problem with F1 is that, in this analogy, it is much like Major League Baseball, where the rich teams have been the most successful, and they have no desire to stop getting richer. McLaren and Ferrari are like the New York Yankees and Boston Red Sox of F1- for all intents and purposes, they can out-spend their way to championships.

    The Yankees are about to sign superstar free-agent pitcher C.C. Sabathia to a record seven-year, $161 million dollar deal- something his previous teams in Cleveland and Milwaukee could never dream of- much like Williams could never afford to sign Kimi or Lewis at their current value. Indeed, some of the smaller outfits could probably run their whole operations on the combined salaries of a few of the top drivers- nxt season the payments the Yankees make to Sabathia plus their other top two stars, Derek Jeter and Alex Rodriguez, wil be more than the entire payrolls of many teams in the sport.

    If there was going to be a salary cap,reat, but the teams would probably fight it to the very end. Just look at a guy like Alonso, along with his millions of fans and millions in sponsorship dollars. Dose anyone really think that the top teams would give the smaller teams a chance to afford a superstar like that?

  21. I think I can see a Mad Max-ism on this coming soon, forcing the drivers to have a maximum salary (as I am sure some must be earning as much as he is). Although I am sure the teams would top this up with free cars, shares and encouraging the drivers to find more personal sponsorship.
    Don’t the likes of Alonso and Old Schuey before him already have massive personal sponsorship? I would have expected that is the only way to go for the drivers anyway….after what Bourdais was saying about Sato.

  22. Of course they should take a pay cut BUT SO SHOULD BERNIE AND MOSELEY the sport would be better served without these two,.

  23. George,

    Let’s not forget that Jeff Gordon is also the co-owner of his own car, the #24, although he does not receive points for it in the Owner Standings.

    Jeff Gordon is everything that is right about NASCAR, and motorsport in general. He’s one of the greatest racers who has ever lived, and every bit of his immense talent is matched with immense class. It’s a shame we never got to race in a Formula One car, as he would have been very good.

  24. A salary cap is unworkable in my opinion, like comment No.7 Tim said the sponsors could just pay the drivers directly.

    This came up when Schumacher was still driving, I remember someones point was that Malboro could pay him however many millon for promotional work while Ferrari would pay him a realativly small amount to race cars.

  25. Paige,

    Thanks for the insight re: Jeff and part ownership of his own car. I agree with your assessment of him as a class act.

    Relative to reducing current F1 driver’s salaries, it’s up to the teams to figure that one out. Can’t mandate that from on high, regardless of Spanky’s new found power.

    There will always be a disparity between the top and bottom teams, the haves and have nots. Ferrari can afford to pay Kimi $33 million a year and TR needs a driver who can bring sponsorship to get his seat for a year.

  26. Oliver, Lewis isn’t earning as much as Button unbelievably enough!

    I think you’ll find Lewis is meant to be on £70 mill for 5 years whilst Jense is on £8m a year… (plus personal sponsorship rights)…

    I’d say that makes Lewis as earning nearly twice what Jenson is getting… as a minimum….

  27. yes i think they should but not a major one just an amount that could be spent on other things within the team. but the reason why i think they should is by looking at Jenson Button nearly £20million a year and only getting 3 points!!!! now how can that be….? no wonder honda went bust they are just waisting money..!

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