Big bucks in Formula 1, but not for everyone

When Lewis Hamilton passed the checkered flag in the Japanese Grand Prix a fortnight ago, he did so in third place, giving his team yet another 15 points, and in turn giving Mercedes a sixth consecutive constructors’ title.

As a driver, Hamilton is richly rewarded – his salary this year salary is said to be £40 million (R754 million).

Following behind Hamilton was Red Bull’s Alexander Albon, whose fourth-place finish gave his team 12 points. However, he is certainly not as richly rewarded as Hamilton – in fact, far from it.

At the start of the season, when still driving for Toro Rosso, the 23-year-old earned £120 000 a year. That is how much Hamilton earns every 26 hours.

There are few other sports in the world where payment to competitors in the same competition are as unequal as they are in Formula One, in which the top five highest-paid drivers (Hamilton, Sebastian Vettel, Daniel Ricciardo, Max Verstappen and Valtteri Bottas) earn nearly six times as much as the remaining 15 who race against them.

F1's most cost-effective drivers

Hamilton and Vettel, who is on a salary of £30.5 million, are in the top 30 on the Forbes list of the top-earning athletes worldwide, with Hamilton ranked 13th and Vettel 30th. That, however, includes endorsements, which are not as high in Formula One as they are in many other sports.

In terms of straight salary, Hamilton is the 11th-highest paid athlete, while Vettel comes in as the 13th-highest. What makes a comparison between the top drivers particularly interesting is the fact that the salaries do not always go hand in hand with success.

Ricciardo, who is said to be the third-highest earner with £26.5 million, has “only” secured 42 points, which equates to £630 952 a point; Albon has managed 64 points at £2 031 a point.

Another driver who is astonishingly “poorly paid” is Ferrari’s Charles Leclerc, who has exceeded expectations in his first season with Ferrari (only his second season in Formula One).

The 22-year-old driver is on £2.5 million, but is third in the drivers’ standings.

Ferrari team principal Mattio Binotto has said that Leclerc’s situation will change: “Contracts with drivers are redrafted when there are reasons and conditions for doing so. Charles and I have invested in the future and Sebastian is happy to be with us. During the off season next year, the Ferrari duo will still be there.”

Documents released by Mercedes showed that, last year, notwithstanding the high salaries and running costs of the team, they made a small profit. The team said the investment was worthwhile.

“Formula One makes an important contribution to the brand’s status as the eighth most valuable in the world.”

With Mercedes having secured six consecutive drivers’ and constructors’ championships, there are fears that the sport could lose its appeal, which would in turn result in less broadcasting revenue.

To try to ensure that Formula One remains competitive, the sports’ governing body has agreed to a number of changes for next season – one of which will result in the team’s budgets being restricted to £138 million.

Drivers’ salaries, salaries paid to the three best-paid executives, and the budgets for sponsorship and marketing are excluded from this figure.

Another reason teams justify high salaries is the money the drivers earn for their team in terms of prize money.

A complicated formula, which includes past performances and internal team performances is used to allocate prize money per driver.

And it is here that there seems to be a definite correlation between the salaries and the money earned, with Vettel and Hamilton leading the pack. The Briton may well have been ahead of the German had all the points his team (then McLaren) achieved in 2007 not been declared null and void over a spying incident.

Kimi Räikkönen’s high position in this ranking results from his performances in previous years, with six finishes in the top three of the drivers’ standings. Similarly, Max Verstappen’s reasonably “low” position is determined by the few seasons he has raced in the sport, as is Leclerc’s non-appearance on the list.

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