One of the great short and medium term objectives in Formula 1 is to reduce your costs. In the new regulation that will come into force in 2022, work has been done on this path, putting a budget limit to teams: first of $ 145 million for 2022, $ 140 million for 2023 and $ 135 million for 2024-2026.
The objective is to ensure that the big companies do not skyrocket their costs to achieve mechanical superiority (more budget, more technical capacity) and thus not distance themselves competitively. On paper, it will be a way to even the competition.
However, Formula 1 is still too expensive a sport. In that already approved budget limit the cost of the pilots’ salaries was not considered, which takes a good bite out of the total amount each team can spend. Although the contribution of sponsors is key to the health of the teams, if they have to dedicate part of that briefcase to pay the riders, the economies of the teams suffer.
The discussions to limit the salaries of the pilots had already been going on for a long time, but with the crisis that the pandemic has left, it has become a must. Thus, the Formula 1 Commission and the team leaders have ratified this salary cap as of 2023.
From now on, teams will only be able to dedicate a total of 30 million of your total budget to the salaries of its two pilots, which can be distributed as they want: 20-10, 15-15, 25-5 … In addition, the salaries of the three executives who earn the most will also be limited.
This salary cap will be related to the budget limit. That is to say: the teams will be able to overcome the first if they compensate it with the second.
Hamilton’s continuity beyond 2023, in the air
This season, the rider who earns the most on the grid is Lewis Hamilton, followed by Sebastian Vettel. That of Mercedes reaches about 40 million euros per year, while that of Ferrari is close to 30.
With the change from German to Aston Martin (current Racing Point), that salary will be noticeably cut, but Hamilton has no contract for 2021. In fact, that is one of the great unknowns that remain to be determined this year.
Although both Mercedes and Hamilton have had enough of repeating that both want to stay together, this new budget limit can be a barrier. At least temporary, since will not affect Hamilton’s salary until 2023, when it will come into force.
The hexacampeón, who is on his way to the seventh title, has already warned that he does not want to extend his stay in Formula 1 much longer, so this budget limit may mean, de facto, the end of his stage in the Gran Circo in 2023 .