Lewis Hamilton’s Lucrative $55,000,000 Contract Under Strict Scrutiny After Red Bull’s $7,000,000 Crimes Hand a Lesson of Lifetime to FIA

Speculations of Lewis Hamilton asking for a $319,000,000 contract have been reported. With Toto Wolff suggesting the deal will be closed soon, Hamilton is rumored to be asking for a 5-year contract. Nonetheless, his current $55 Million contract has come under scrutiny before the contract extension was signed. All thanks to Red Bull, whose $7 Million crimes taught FIA a lesson of a lifetime. What is FIA doing sneaking around Hamilton’s contract?

Red Bull was found guilty of overspending during the 2022 F1 season by about $1.8 million while $145 million was the ceiling. According to Red Bull, they were $4 million under the cost cap. However, they did not include catering costs, gardening and sick leaves, and the UK tax situation. FIA included all of these and handed the team a $7 million fine and a 10% reduction in Aerodynamic Testing time as a penalty. As it was the initial year of the rules, the loopholes and the gray areas were exploited. 

Nevertheless, FIA made amendments to the financial regulations earlier this year, clarifying the rules relating to the drivers, the three highest-paid team members, travel costs, marketing expenses, registration fees, sick leave, legal fees, and activities that go beyond the horizon on F1. Some teams were also running a separate division on technical projects beyond F1 and the R&D from there was shared with the F1 team. However, F1 put an end to it with the TD 45. 

According to FormulaPassion.it, the FIA has now asked for clarity from the Top 4 teams, namely Red Bull, Mercedes, Aston Martin, and Ferrari around the ‘non-F1 related activities’. As FIA investigates any potential breaches with the change in regulations, the salaries of the driver and the 3 highest-paid executives will also come under observation. Lewis Hamilton is amongst the highest-paid F1 drivers with a current contract amounting to $55,000,000 a year and will be under scrutiny by the FIA. 

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As FIA digs deeper to make sure the regulations are being followed, TD45 was recently introduced as a much-needed revision by the governing body to close off another loophole. The Technical Directive will aid in leveling the F1 field. Let’s see how Lewis Hamilton and Co. along with the other top teams were taking advantage of the now-closed loophole.

FIA closes another loophole in cost cap with the introduction of TD45

Many F1 teams, especially the Top 4, were all running a separate division. The teams would employ their senior staff to these divisions as they worked on projects outside of F1 horizon. However, the R&D done for these projects was the. Shared back to the team as Intellectual Property. This way the teams saved on the salary of the senior staff as well as the R&D cost. Some examples would be Red Bull’s Advanced Technology division and Aston Martin’s Performance Technologies.

This is where TD45 comes in. It stops the teams from sharing IP from these separate divisions without being accounted for in the cost cap. As per Autosport, “TD45 states that while teams remain free to run these special projects divisions, any IP from them that is used by F1 teams must be accounted for under the cost cap, so cannot come from free sources within the same company.”

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What do you make of FIA’s decisions as they ask the top teams for clarity?