Why do top teams pay so much to their drivers?

Why does a dominant team like Mercedes need to pay $50 million to their number one driver?

In my opinion modern day racing performance largely depends on the car, and little on the driver's skills. I think all the top 10 drivers today can all get 1st or 2nd place in the race if they are in a Mercedes.

Hypothetically even if Mercedes pays $1 to their drivers, still many drivers would like to take the seat and win the race. The team can better spend the $50 million on getting the best engineers and make the car even faster.

The same holds for Ferrari and Red Bulls. Leclerc is a perfect example, costing way less than Vettel and performs on similar level.

In my opinion the salary bargaining power is entirely at the team side as the top seats are limited, potentially only 6 seats that can win a race. Are you afraid that Hamilton might leave Mercedes if he can only get 1$ salary? To where can he go and win another race?

 

Lauda explained it in his book "Art and Science of Grand Prix Racing"

The argument goes:: If you are already spending $30M to put the car on the grid, what is another $3M for a driver that can put the car over the line first?

Adjust 10× for inflation.

 

Drivers sell products and merchandise too

 

Leclerc signed for less because it was his first contract. As soon as he is successful and about to resign the price will be much higher as well

 

Why companies pay so much for CEOs?

Your opinon is wrong: the most talented drivers are the ones who make the difference.

If you are investing almost 400M a year, why aren't you going to want the best of the best? It's like having a company investing tons of money to develop a top notch business and hire a regular Joe as CEO.

 

10% of the annual budget is quite significant in my opinion. Also it's not about whether a company is able to pay that much, but why would a company pay that much to a driver?

 

I would imagine a brand like Ferrari is much bigger than his drivers.

 

Well that's the thing. What's the bargaining power of Leclerc when he renews his contract? Will there be any seat available in Mercedes and Red Bulls. Right now both Mercedes and Red Bulls have a strong number one driver. If Leclerc goes to either team, there is a chance he will be beaten and that's very bad for his career. So his best bet is staying at Ferrari because he is likely to become the number one driver at Ferrari. So he has very small bargaining power in my opinion.

 

Because unlike a normal company, driver skills only matter little. That's why almost any of the top 10 drivers can win a race in the current Mercedes. So I wouldn't compare drivers with CEO's.
The real heroes are the engineer's developing the car.

 

Easy answer, because they have to. If it were true that anyone could extract a top performance, or even true that any top 10 driver could drive a top car, then the market would sort that out. As it is, teams and drivers weigh a bevy of factors and come to an agreement that makes sense for them.

/Econ 101 Lesson

 

IMO, they´re paid too much: that money spent on the car can make a bigger difference. But the market is what it is, so once you have a good car, if you want an experienced and proven driver for it you have to play the game. Also there is the marketing aspect, and even a darker one: "popular" drivers get a preferential treatment from FIA; there is an extra return from that investment apart from the driving itself.

In summary, for Mercedes paying an absurd ammount of money for Hamilton could make some sense. But I´m not sure if the same goes for Ricciardo and Renault, for example.

 

I agree with your logic, but logic doesn't matter in F1.

I would be willing to bet if you were to ask Hamilton, Vettel, Leclerc, Madmax ECT........, If you had a choice to drive the current Mercedes for 5 million a year or the current Williams for 50 million a year they would all take the Mercedes with less money. JMHO

 

Enzo Ferrari would, more than likely, agree with you.

 

Disagree with most of the sentiments in this thread. IMO the driver is - relatively - one of the least expensive components of the performance equation. When you have teams spending tens of millions of dollars on development to eek out half of tenths in performance or less...putting the right or wrong driver (even at the elite F1 level, where most everyone is 'fast') can instantly gain or cost you full tenths of performance.

Because he's a sophomore driver and his pace compared to a multi-time WDC, and his ability to perform in a top line team was remained unknown. If he continues this upward trend, he will be paid handsomely come next contract time, you can be sure.

The difference in laptime time between an Alonso and a Trulli/Fiscicella in laptime isn't hugegreat in the end...maybe a couple tenths. But that's often the difference between winning a couple races here and there, and winning 7 races and the WDC.

 

"When you have teams spending tens of millions of dollars on development to eek out half of tenths in performance or less..."

The annual budget for the top 3 teams is 300M - 500M euro. >10M expense per 0.05 sec gain seems a bit exaggerating.
I agree 0.1 sec might make a difference for a mid tier team. But the advantage of Mercedes now is far bigger than that. That's why I think putting any of the top 10 drivers in the Mercedes can win the race.

 

But what is your problem with some drivers getting a lot of money?

The top teams can afford it without question; it's also part of their prestige to have highly-paid stars on their book.

The top athlètes in almost any other sports get a lot too (football, tennis, golf), more than F1 drivers, same for entertainers, etc ...

Top drivers attract sponsors, draw the crowd, and often bring results to their team.

What is wrong with that?

Do you also know that some drivers get paid very little in F1? As little as $150K per year.

 

If that’s true why hasn’t Bottas (Who is a hell of a race car driver) won as many races as Hamilton?

There is no doubt that the car is the dominant part of the equation in F1. It ALWAYS has been. But there is also no doubt that if you want to win you try to have the best of everything including drivers.

And if I may point this out.... The designers and engineers aren’t risking their lives for our entertainment. The drivers are.

 

they are absolutely worth the money - how many guys in the world can do that? how many messi and ronaldos are there etc? the market isnt dumb - if those numbers weren't supportable the checks wldnt clear. i dont understand posts like this

 

You can ask yourselves the same question while looking at an MLB roster. And this is why I personally find discussions involving athletes salary boring. As long as I'm not the one writing the checks, I don't care. Sure, I know Hamilton makes tons of dough. I also know he's a sought after spokesman that people look up to. I guess the value is their for the sponsors.

 

Leclerc is under the Ferrari Drivers Academy - so has a pre determined strike price based on performance etc... Basically F-1 driver salaries are the definition of the free market. you get what you can, and there is always someone else willing to pay more. Someone like Hamilton would attract at least half of his salary or more in just sponsorship opportunities to a team. So if he went to Williams - there would be no end of sponsors wanting a part of the action. But I do agree the cost has gotten crazy .... but I don't see anything stopping it.

 

The problem in my opinion is that the companies sponsoring are not able to measure the success of their investement... Just look at all the "influencer" that get heavily sponsored by a lot of them although one can doubt that they get back as much as they invest.
Same can be said about salaries of sports stars, how can you measure what they actually bring to their employer? Especially in a sport like F1 were the success is divided between equipment and driver...

 

Sir, you are very wrong. Put side by side the telemetry data of any current teammates and it will show you crystal clear why the most talented one is faster, at the same car. The most talented driver is not only faster on a single lap, but also more skilled on feeling the car and reacting to it by changing brake bias, differential settings, etc. Additionally, he has a better vision of the race as a whole and can change the strategy on the fly.

It's difficult to measure how many tenths differentiates an extremely talented driver, such as Verstappen, from a talanted driver, such as Gasly, but my guess is that it's less than 3 tenths.

Also, you are generalizing the whole sport by the current situation of the hybrid era: Mercedes dominance. Still, even in this situation it's indispensable to pay for the most talented: he will be the one who will give the best feedback for engineers to build the next car.

Watch some races when Ayrton Senna was driving the poor Lotus against Williams, Mclaren, and Ferrari, and you will see why talent really makes a difference.

 

Interesting interview with the legendary great Mario Andretti on UK top gear. Asked just how good the Lotus 79 was, he said.

Chapman told us to drive much slower than the car was capable so as not to draw attention" Sound familiar ?

Team or car, its a joint effort. Just right now LH and Mercedes are firing on all 6 cylinders and no one can break it. If LH quits then Bottas will move up the ranks. If Mercedes quit, SF move up the ladder. However I guess they would miss the next rung and fall

 

Different times--the driver was a bigger part of the equation. F1 has become an engineering competition.

Hmmmm

 

F1 has been a engineering competition from the beginning.