Being a Formula One driver is a tough life. You have to travel around the world to drive cars worth millions of dollars that are specifically designed to your tastes. You only get to stay in the nicest hotels. And at the track, you might not always be the fastest because your multi-million dollar team is, frankly, the public school equivalent to your private school competitors. And now, after all that, the series is going to start capping your salary! It is, truly, far more difficult an existence than anyone gives you credit for.
It’s true: starting in 2023, F1 wants to cap driver salaries at $30 million per team. That means that, say, Mercedes would have to divvy up $30 million between Lewis Hamilton and Valtteri Bottas, or Red Bull would have to explain why Max Verstappen makes five times what his replaceable teammate makes.
Now, this proposal isn’t finalized, but it is part of the series’ efforts to lower its consistently skyrocketing costs. F1 started introducing those measures last year as part of a proposal for 2021 and beyond. The original hope was that limit of $145 million for car development would help even the playing field, make things a little more competitive, and maybe prevent teams like Manor Marussia or Caterham from shriveling up and dying a sad, backmarker death.
The initial deal didn’t include caps to driver salaries or the salaries of the top three highest-paid team personnel, though. COVID-19 has pushed F1's hand on that point.
Right now, the proposal would impact any driver contracts inked for 2023 and beyond, which means there will be a few years to adjust to the change.
There’s an interesting clause in this whole deal, though. $30 million is basically just the accepted salary cap. A team can actually decide to pay a driver more... it would just have to take that extra money out of its car development fund. So, a team could spend more to sign a top driver, but the thinking is that a compromise on development is a fair trade.
As F1's highest-paid driver, the caps will likely impact Lewis Hamilton the most. While driver salaries are protected, Hamilton’s estimated salary is somewhere around $40 million per year, and rumor has it that, if he signs a new contract with Mercedes, his salary will be even higher.
That said, most teams will likely not come close to hitting their max salary budget. Again, only six lawyers have access to the hard numbers, but RaceFans estimates that only five drivers in 2020 are paid more than $10 million, with over half the grid making $5 million per year or less.
Whether this comes to fruition or not—and whether or not it will actually make a concrete change to the sport—remains to be seen.