Several years ago, Mercedes began its terrorizing reign in Formula One, and if you were a Mercedes driver or team member, it was great; Lewis Hamilton was winning and competition was laughable at best. Unfortunately for the Silver Arrows, that reign of terror was relatively short lived and budget caps plummeted their operating budget to just $145 million. This was a stark contrast from what Mercedes spent in its 2020 Championship run, which was $459 million.
While teams have had to make significant adjustments in the cap era, perhaps, considering how much Mercedes spent in 2020, we should give Red Bull more credit for Max Verstappen’s title win–especially as it was the debut season for the cap. However, when we consider that the cap was supposed to be an equalizer of sorts, we have to make the argument that if driver and team principal salaries aren’t baked into those caps, is the budget actually the equalizer it was supposed to be? That’s debatable.
For example, in the National Football League, teams have salary caps which are separate from their operating expenses, which include coaches’ salaries. Teams have a salary cap of $208.2 million for the 2022 season, and have to make this work for 53 roster spots. This requires teams to have to go to players with guaranteed contracts to see if they’ll restructure them to make space in the cap for other players. These moves aren’t taken lightly either, and are usually necessary to fill a vital position. Some players, such as seven-time Super Bowl champion Tom Brady, are friendlier to the practice of restructuring, but some players who aren’t as marketable are more averse, and rightfully so. In relation to Formula One, if Red Bull didn’t have the budget for both Max Verstappen (who earns $50 million-plus annually) and Sergio Perez ($10 million), Verstappen would either have to restructure, or Red Bull would have to find another driver they could afford.
Most teams have their main driver and that wouldn’t change, but a solid wingman who can drive defensively comes in clutch when it comes to the Constructors Championship. Unlike major sports league’s, Formula One has two world titles that aren’t mutually exclusive to one another, and that significantly raises the stakes from a strategy perspective. With that said, you have to wonder, if drivers weren’t allowed to make as much money, would teams still favor one driver over the other in terms of race strategy? Or would this neutralize competition and force teams into the Mercedes approach of letting drivers call their own audibles? That culture was forced throughout the Hamilton-Bottas era, and we saw George Russell carrying the torch in the Dutch Grand Prix this season when he pitted, leaving Hamilton a sitting duck ahead of Verstappen. In short, Russell did what was best for his strategy.
Down the line when Hamilton retires, if Russell is still with Mercedes, decisions like that will impact his earning potential.
The cap was supposed to end the monopoly, however, we’re in a new era of Red Bull dominance. Again, credit to Red Bull for managing that, but in order to avoid fans growing restless at the prolonged predictability, Formula One might need to get clever–and fast.
Of course, salary caps aren’t a popular choice. Why should drivers be limited in their earning potential when their marketability is the jet fuel propelling the sport’s popularity? When Formula One decided to change its draconian social media rules, drivers grew into household names. While they have potential to earn money outside of the sport, that demand has a significant impact on their F1 contracts, too. In short, everything in Formula One is part and parcel of one another, and there is no easy resolution in terms of driving competitiveness.
Since Alpine’s horrendous handling of Oscar Piastri’s contract led to a disaster with McLaren and Daniel Ricciardo, there’s been talk about iron cladding drivers who are under developmental contracts. But would that make developmental contracts look like prisons? With drivers knowing their worth and adding to that worth through robust social media presences these days, it puts drivers–quite literally–in the drivers seats when it comes to their leverage ability.
The last time the drivers went on strike was in 1982 at the season opening South African Grand Prix. This strike was over the former governing body, FISA, wanting to give teams full control over driver contracts. Fast-forward forty years and even the thought of the FIA being in control of all driver contracts is a scary thought. With that said, I think that tightening contracts should be up to the teams themselves, but if the FIA interfered in contracts these days, it could lead to another strike.
While we’ve explored two of the most realistic ideas, it’s still hard to say what the answer is to creating a more entertaining podium. However, I think it has more to do with teams getting creative in developing drivers (and keeping them) than risking a potentially messy strike over dictating the value of the drivers–especially considering how dangerous the sport is. Until teams can figure out an answer, it’s Max Verstappen’s world now, and we’re just living in it.
