What Is the F1 Drivers’ Salary Cap?

F1 has been planning a series of moves which will hopefully see the sport’s competitive balance improve. Of late, there has been a lot of predictability, which is something that sports should not ideally have.

With that in mind, the $145 million budget cap for teams from the 2021 season is a step forward in the right direction. The idea is to have a more sustainable and entertaining Formula 1 competition.

However, the latest news suggests that F1 teams have provisionally agreed to a $30 million salary cap on both drivers from 2023. They might have done so keeping in mind the rising costs involved in competing in the premier motorsport division.

Can Formula 1 actually implement the salaries’ cap?

Some drivers might have contracts running until 2023. So, because of the complexities involved in the employment laws, enforcing changes in salaries at present will not be a possibility.

Red Bull team principal, Christian Horner said, “The discussion of a cap is, at the moment, exactly that. There’s no firm rules or regulations, it’s not been voted in. It’s not become part of either sporting, financial or other regulations.”

“We’ll see where it goes, but it’s far from being a set of regulations. Because there’s all kinds of legal ramifications that need to be looked at. And actually, is it implementable.” concluded Horner.

The framework of the $145 million budget cap currently does not include the drivers’ and top three employees’ salaries. Teams could still go ahead and invest in their personnel. Although the idea is that this ‘overspend’ on the salary cap would get deducted from the teams’ $145 million budget from 2023 onwards.

Are there downsides to enforcing a salary cap in F1?

In a bid to regulate competition, global superstars could look elsewhere if earnings become limited. So somewhere, F1 might lose a bit of its appeal, if the best drivers are not competing on the grid.

Mercedes’ boss Toto Wolff stated, “Formula One teams, in order to be sustainable long-term and attractive as sports franchises, need to show profitability like any other company out there. And I think we all need to achieve that.”

“On the other side, it’s clear that drivers, the ones that are in Formula One, are the best in the world, should earn high salaries like all the other top stars in sport.”

So, all things considered, introducing a salary cap makes sense for most parties involved. However, the FIA should closely work with the teams, drivers, and representatives. This would ensure there are no resulting controversies and complications that could directly affect the sport itself.