Kimi to earn $1m US per week.

Yeah, I don't get the "he makes too much" arguments. Envy?

I would have no problems paying for a CEO or athlete if it gave me a great branding or long-term return on investment.

Tiger Woods makes nearly $100 million a year. But the PGA doesn't hire "golfers". The tour puts up the tournaments, prize money (with sponsors, golf courses, ect.) and the golfers determine who takes home the prize. But Tiger's income comes from mostly his deals with Nike (and they are making a lot of money with him), American Express, Buick, EA Sports, and whatever else he does. He's starting a golf course design company (with his first course to be in Dubai), so he's going to follow the ways of Greg Norman and others.

What does it matter to you what other people make?

 

You have to look at the impact of Alonso as a whole. Not just his ability to win championships, but his ability to help the team bring in sponsors, sell cars, ect.

 

Actually, Briatore is a cheap man when it comes to his F1 spending with Renault. Does Briatore enjoy his life through his personal income and other businesses? Of course. That's his choice.

To be honest, F1 is built on the glamour and "luxury". Without, I don't think the popularity of the series would be as large as it is. Just picture F1 without Monaco.

 

Westworld,

What do I care what someone makes? Well, if that cost is passed on to the consumers, it drives the price higher. I don't like that too much. Moreover, as consumers, if we choose to purchase the goods and services of these companies, we are, in effect, endorsing their choices.

Sorry, but I do not endorse paying the kinds of compensation that are being thrown about so easily. Of course, it would be nice to be making this kind of scratch. Of course, if I were I'd be arguing vehemently against any kind of rational approach. The more insanity, the better.

Being a free market economist and a capitalist, I accept the fact that the market pays what it must to get talent. I also accept that some are more fortunate than others. It's not fair or just, but it is what it is. On the other hand, it's certainly difficult from my perspective to understand these kinds of compensation levels. I'm not arguing that compensation should be regulated, but it's fair to say that the market for compensation, at least in the corporate world, has been broken for a long time. There have been numerous attempts to fix these disconnects, each of which results in more and more generous comp packages. And, where there is a way to "game" the system, it will be gamed. I think this is much harder to do in this context where your performance is open for everyone to see every other Sunday. But, it's also true that driver's may benefit from or suffer as a result of actions that they had nothing to do with (tire manufacturer, design flaws, mistake at pitstop, penalties for other drivers, and so on).

That said, I'm still stupified at the compensation levels. And, about Alonso: as the 2x WDC, I respect that he should be one of the highest paid on the grid. But, $35MM? That's almost $3MM a month! The driver pay escalation is just absurd! And, I'm not picking on Alonso alone. Frankly, I just don't see how they justify paying Ralf $16MM. Is Raikkonen almost twice as good as Alonso? Just mind boggling.

CW

 

Schumacher earned what he earned because those who were paying him received a commensurate return on their investment. As I said before, Ferrari was only making $50m profits in 1996, and about $160m today - it would make NO SENSE for Ferrari to pay anyone so much. It was bad enough when in 2004 Montezemolo "awarded" himself a $20m "bonus" at the end of the year. So, Ferrari (Fiat) only ever paid Schumi a few million $ per year. The rest came from sponsors (Marlboro on top) who obviously paid an amount that they reputed commensurate to the returns they were expecting from the association with Schumi. It's plain old management accounting. Nobody gives money away for an "investment project" at less than their discount rate, it makes no economic sense.

By the way, what really gets me is the unfairness of the huge wage difference between Schumi, Montezemolo, Todt and a few others, compared to all the other boys and girls in the Ferrari F1 team.

Maybe you guys in the USA do not know this - but how much do you think a senior engineer - someone with a Masters' degree or a PhD, working on complex calculation algorithms for powertrain, combustion or gas dynamic simulations - earns at Ferrari??? I tell you... about $3-4000 per month, maybe $5-6000 for the track engineers. And a mechanic, the guy who actually puts together the car that Schumi will drive on sunday? $2000 per month for the young ones, which can get up to $5000 per month for the track team that have to spend sleepless weekends around the world for 9 months per year. No wonder Schumi always felt a bit guilty towards the other guys in the team, to the point that in 2004 he gave each one of them a Rolex watch as a thank-you gift!

And just how important are these people to Ferrari's success? Would Montezemolo and Schumi be capable of screwing together an F.1 car if the mechanics went on strike? Would Todt be able to design a new intake manifold that gains 2BHP or a new aerofoil that gains 0.5% better downforce? No. No. No. Then WHY are these guys earning only the breadcrumbs? I tell you, THIS is what is really sick about F.1.

 

Yes, agreed. Its no wonder these guys are peddling their team jackets/uniform's and any other F bits and pieces they can get their hands on...who could blame them.

Disclosure...I am one of those willing buyers BTW LOL!

 

Because if they make excessive amounts like that, it should be put to better use like the billions of people that are poor or hungry in the world. We are not jealous because we all realize that this is completely idiotic to pay one person that much money.

 

Thats ridicoulus, its called an F1 "TEAM" not an F1 driver, I mean its ridicoulus that one man is getting paid almost as much as all the people working for him. If I was Schumi, why stop at a watch when you could easily buy them all Ferraris. Running backs in the NFL are much more sincere to their offensive line buying them gifts even though they already make millions. The engineers/mechanics need to wise up and demand more money.

 

I agree with you on the first part. If Ferrari, the sponsors, wouldn't be able to market and gain the return on investment on guys lik Schmi or Kimi, then they wouldn't spend that.

As for the second part, what's forcing these guys to stay? I believe that NASCAR pays a lot more. That leads an interesting thought. I wonder if F1 and NASCAR are starting to have to compete over talent?

 

I would have no problem paying someone a certain amount of money if they could return that investment, plus some. I'm looking at it from a business standpoint. If your going to operate in a free-market, capitalistic society, then you will get companies that will pay more for what they consider better investments. Is that excessive? Not if Ferrari, Nike, or who it may be, are able make a profit on those returns.

 

Lets simplify things...

They are worth whatever someone is willing to pay for them. Period.

 

Kimi better win the WDC next season or some people are going to be realllly pissed..

 

great words. Or we will get into arguments - why ferrari cost 200K$ for the car with less cupholders then Chevy Tahoe

 

How much of a pay raise is this for Kimi, how much he bring in from McLaren? Anyone know. How much do testers get paid compared to race drivers?

 

Exactly.

If the owners didn't have it, they wouldn't pay it.



And, Tiger Woods is the highest paid athlete, has been for about 7-8 years now.

 

Because it's a Ferrari, nothing else need be said.

 

Schumi was a few hundred thousand short in 2004.

More than double.

It would be different for every driver, depending on team, contract, etc. When I last spoke (in 2004) with someone who is family friends with Luca B, they said he lives comfortably on several hundred thousand a year, IIRC.

 

Well, it's the epitome of the whole market economy, is it not? It exists in show business, the film industry, big corporations and motor racing.

"If you really want me, offer me more than my present wage/retainer."
It happens in everyday life when someone is 'headhunted', the figures can become astronomical

On one side Ferrari shows Raikkonen that they are seriously interested in him to find and offer that amount of money.
On the other side, Raikkonen wouldn't move unless there is an advantage.
The 2007 Ferrari may be better for him than a 2006 McLaren, or it may not, and damage his career. So in between, it's "Show me the money"

If somebody is really wanted, his price tag goes up: Adrian Newey from March (?) to Williams, then from Williams to McLaren (and almost poached by Jaguar!!), then from McLaren to Red Bull. The demand for that guy has never stopped, and he must be minted by now!

Now take the case of Gascoyne, sacked by Toyota, I don't think he had much bargaining power to negotiate his wages with Spyker, do you?

I agree that some figures don't seem to represent the real value of some drivers on the track; there are anomalies. But it's too late after the contract is signed to find that the driver don't perform as well as expected and is poor value for money. How can Toyota justify paying Ralf so much? But he can always turn back to critics and say that the car isn't good enough...

Pay cuts have been happening in F1. Nelson Piquet raced with a performance related bonus at Benetton, even after winning 2 WDC with Brabham. I am not sure that Senna's contract with Williams was fantastic in financial terms (Williams notoriously don't like to pay drivers), but Senna was frustrated by his last season at McLaren and went there thinking he had a better chance to recapture his title.

 

I can't understand why everyone is so upset about high F1 driver wages. WE are the reason they are paid so much. WE spend hundreds if not thousands on race tickets, merchandise, the products made by team sponsors, etc, etc... WE indirectly pay these drivers' salaries.


If you're so upset about it, boycott F1.


As for me, I can't wait until next season! I could care less if Kimi makes $52 mil next year. I can't do what he does... if I could, I'd be making $52 mil a year. So I'll just be content watching him do it and paying for it.

 

Amen, brother!

 

Actually Bild (not always the most reliable) said that Kimi will earn $25M per year, not the reported $1M per week......

Bild added that Kimi Raikkonen will make $25m next year, contrary to recent reports that said the Finn will simply take over Schumacher's Philip-Morris bolstered wage that tipped the scales at an estimated $50m.

The same publication said world champion Fernando Alonso's McLaren salary is 'only' $20m.

"No one will ever again earn as much as Michael did," Schumacher's manager Willi Weber said.

 

This is pretty much what I heard. Except that Willi Weber is a blow hard, Senna in his 1992 season with Mclaren Honda made $22M a year, just as in any sport someone will end up earning more than the champion that preceded them.

 

+1