Jump to content


Photo

Team budgets and driver salaries


  • Please log in to reply
10 replies to this topic

#1 glorius&victorius

glorius&victorius
  • Member

  • 4,327 posts
  • Joined: June 02

Posted 05 February 2008 - 09:06

I was just reading this (semi conspiracy/analysis) story on http://www.f1i.com/c...nt/view/6909/1/ about Schumacher's retirement which mentioned the incredible salaries that drivers get paid and the options that teams are prepared to pay for having the first choice for their services.

I remember somewhere in 92 that Senna's salary hit 25 million and that was a new record. I don't know what the annual budget of McLaren that year was. Perhaps 125 million?

Now we're talking of 45 million - 70 million dollar per year contracts, paid by the big teams McLaren and Ferrari for the top drivers.

I was wondering: to what extend is the rise in team's overall budget (over the last 15 years) accounted for by rising driver salaries? In other words: have driver salaries been an increasing and growing factor in thrusting up the teams budgets?

And how will that relate to the upcoming budget caps? Will driver salaries have to stop growing? Will teams with budget caps take a different approach... pay less for the car, lets risk to pay the "0.6-bringing-driver"....
and especially now that driver skills are more worth (less driver aid technology).

I can imagine teams having the rationale that its better to pay more for the driver than for the 20 extra engineers to be hired to develop technology X.

Also will we also see (with budget caps) see a trend that teams allow drivers to get their own personal sponsorship deals (as in Senna, Schumacher, and now Hamilton)

I there is lots to be analyzed and discussed here. It would be nice if we can have some facts and figures... some percentages perhaps.. (difficult in F1 but I am sure someone can dig them up)

Advertisement

#2 Lifew12

Lifew12
  • Member

  • 4,551 posts
  • Joined: May 06

Posted 05 February 2008 - 09:49

Originally posted by glorius&victorius

Now we're talking of 45 million - 70 million dollar per year contracts,


Are we? I would have said they were multi-year figures.

#3 Yellowmc

Yellowmc
  • Member

  • 1,916 posts
  • Joined: May 07

Posted 05 February 2008 - 10:05

Remember in some cases, the teams do not pay the salaries, one of the sponsors takes up that duty.

Also, the figures you mentioned are multi-year figures.

#4 glorius&victorius

glorius&victorius
  • Member

  • 4,327 posts
  • Joined: June 02

Posted 05 February 2008 - 10:27

Originally posted by Lifew12


Are we? I would have said they were multi-year figures.


I was also thinking about multi year figures till I saw this (in the previously mentioned article) :

As far as Robertson was concerned, it was all going to be pretty straightforward. He couldn’t comprehend Räikkönen leaving. The contract was up but Dennis had options to renew it well into the future. These options all stemmed from the original contract Räikkönen had signed in September 2001. Dennis had paid a small fortune to secure Räikkönen’s services including a rumoured US$14 million to compensate Peter Sauber. It was a complex contract – two years (2002 and 2003) at a modest salary and then three years (2004-2006) for a much larger retainer culminating in the near US$45 million he was being paid in 2006. But Räikkönen was far from a free agent at the end of his McLaren contract. By all accounts it was at Dennis’s option to take up another three years if he was willing to pay an escalating salary.
Dennis had security, but at a price. There is no way of telling what that price was but it was likely to mean Räikkönen receiving at least US$60-US$70 million a year by 2009. But Dennis, who had been bamboozled into agreeing the high price four years before in 2001, just before the 9/11 terrorist attacks when economic conditions had been very different, did not want to pay, although he still wanted Räikkönen to drive for him.



OK, pre-911, but it cannot have been much lower afterwards...

#5 former champ

former champ
  • Member

  • 2,537 posts
  • Joined: February 07

Posted 05 February 2008 - 11:57

IIRC, from an F1 Racing article years back (1999), Schumacher and Villeneuve were the 2 highest paid drivers in the sport and were on $850,000 and $500,000 a week respectively or thereabouts. Your talking almost a decade ago there and, clearly, driver salaraies were well and truly beginning to skyrocket even then.

I can't see it slowing up though. What's Raikkonen on per year, $50 million I think? All funded by Phillip Morris of course. ;)

#6 COUGAR508

COUGAR508
  • Member

  • 1,182 posts
  • Joined: February 07

Posted 05 February 2008 - 20:56

I would suspect that overall, driver salaries as a proportion of overall budgets are probably less now than in the Senna/Prost/Mansell era.

#7 giacomo

giacomo
  • Member

  • 6,977 posts
  • Joined: December 05

Posted 05 February 2008 - 22:12

I see no good reasons for McLaren to guarantee greenhorn Raikkonen a $45M salary for 2006... back in 2001.

All those figures are looking more than just a bit exaggerated.

#8 Ferrari_F1_fan_2001

Ferrari_F1_fan_2001
  • Member

  • 2,961 posts
  • Joined: May 01

Posted 05 February 2008 - 22:37

Budgets and salaries have always been the subject of much speculation and open to much exaggeration. They are closely guarded secrets which I feel only drivers, sponsors and the top brass really know and don't like to tell others.

#9 k1ngy

k1ngy
  • Member

  • 156 posts
  • Joined: January 08

Posted 05 February 2008 - 23:15

Surely those figures ie 70million for Lewis is 5yrs if i remember would as mentioned be picked up by a sponsor but would have to still be part of the team budget?

#10 hobbes

hobbes
  • Member

  • 889 posts
  • Joined: December 07

Posted 05 February 2008 - 23:20

what happen if part of the salary is converted into a bonus from the sponsor? would that be considered a part of the team budget?

#11 Ferrim

Ferrim
  • Member

  • 818 posts
  • Joined: October 07

Posted 06 February 2008 - 09:07

Originally posted by COUGAR508
I would suspect that overall, driver salaries as a proportion of overall budgets are probably less now than in the Senna/Prost/Mansell era.


I agree.

By Dennis' accounts, Senna's big salary didn't allow McLaren to properly develop their 1993 car, when they didn't have Honda's support anymore. That was in the region of $15-$20 million. I don't believe McLaren's budget that year was anywhere close to $100M: that's 15 years ago and F1 costs have more than multiplied by 5, by all accounts. If McLaren had a budget of say $75M, it's clear that paying a driver the fifth part of that would make development slower.

No driver is being paid a fifth of his team's budget nowadays.