Column Marc Limacher: The end of big salaries for the World Champions ?

Tue, 21 October 2014, 02:05

In recent weeks two theories exist in the media. The theory that indicates that the salaries of the champions of the world will explode in 2015 and theory which considers the end of big salaries. In reality wages have never declined.

In 1992, Williams had a budget of $ 33 million. Nigel Mansell had a salary of $ 12 million. 36% of the English team’s budget was devoted to the English driver. In 1996, when Ferrari signed Michael Schumacher for $ 25 million, its budget was $ 120 million. Or 21%.

During the 1990s, the Williams and McLaren teams have developed a salary cap. Williams has never spent more than 13 million dollars per year from 1992 to 1998 for its drivers. While its budget was increased from 33 million to 120 million dollars over the same period. McLaren has never spent more than $ 20 million for its drivers between 1992 and 2003. Over the same period its budget had increased from 50 million to $ 320 million.

But this expansion on budgets also meant that salaries would increase thereafter. McLaren spent in 2006 a total of $ 60 million of salary for its pilots, while its budget was more than $ 350 million at the time. Between 1996 and 2006, Ferrari spent up to 20% of its budget for its pilots. In 2007 the team’s budget was $ 445 million, while Kimi Raikkonen and Felipe Massa were $ 60 million of salary dollars. Or 14%.

In 2014, according to the publication BusinessBookGP, Red Bull Racing and McLaren devote 5% of its budget to the salaries of pilots. Ferrari and Mercedes AMG 10%. While the number of employees in the teams is more at least at the same level as before 2010.

In 2014, 40% of the budget of the teams came from revenues of the Concordes agreements. In 2002, it accounted for only 15% of budgets. In 2008, Hamilton was 12 million euros this year, the same salary as Juan – Pablo Montoya in 2005. Fernando Alonso was at Renault a base salary of $ 35 million ($45 million with bonuses), while in 2007 he was receiving salary at McLaren $ 30 million and in 2010, Ferrari his salary was equivalent to about $ 40 million. In 2013, the driver was less but its world title premium allowed him to find an income equivalent to that of 2010.

When Michael Schumacher signed with Mercedes AMG F1 for 2010, his salary was set at a maximum of € 40 million per year for 2010/ 2011/ 2012. In his discussions with Ferrari Fernando Alonso had proposed a fixed salary of € 12 million and bonuses for a maximum of € 30 million per year. Either more than what he was receiving for two seasons.

For more than 20 years, their never was a world champion drivers pay cut. The only time it was in 1994 with Ayrton Senna who had asked Williams $ 8 million (the original application was 16 million). But this decline has been granted only because the English team was also $ 8 million to Alain Prost, who had a 1994 contract and, as the French pilot estimated that Frank Williams pushed him to retire. A contest of circumstance.

Marc Limacher
BusinessBookGP editor

You may also like