What's in an F1 drivers contract

[pistonheadforum]

Hello,

Whilst it's unlikely Julian Jakobi will be a PH member and happy to dive into the details I'd be fascinated if anybody has any insight into what is typically included in a F1 drivers contract.

With Lewis and others saying that they are complicated and take some time I do wonder what is in them that's so detailed other than the typical negotiating tactic of waiting until the last minute before showing your hand or the size of the wheelbarrow you expect to fill with cash.

Any input for the PH massive who have some knowledge of these type of sports contracts and what's in them? If you are Julian Jakobi then so much the better. In particular any business structuring, contract clauses (riders), performance breaks in the contract (from both sides) or anything interesting and unique.

Thank in advance.

[Sandpit Steve]

pistonheadforum said:

Hello,

Whilst it's unlikely Julian Jakobi will be a PH member and happy to dive into the details I'd be fascinated if anybody has any insight into what is typically included in a F1 drivers contract.

With Lewis and others saying that they are complicated and take some time I do wonder what is in them that's so detailed other than the typical negotiating tactic of waiting until the last minute before showing your hand or the size of the wheelbarrow you expect to fill with cash.

Any input for the PH massive who have some knowledge of these type of sports contracts and what's in them? If you are Julian Jakobi then so much the better. In particular any business structuring, contract clauses (riders), performance breaks in the contract (from both sides) or anything interesting and unique.

Thank in advance.

I’m not Julian Jakobi!

The obvious bits are the basic pay and performance bonuses for driver and team performance. Points bonuses, win bonuses, driver and team position in the championship bonuses are all common.

The contract may be tied to sponsorship contracts the driver brings to the team, and vice-versa, with break clauses.

Drivers will also have personal sponsors, so something about how those integrate with the team, logos on suit and helmet, number of guest passes over the season.

A longer contract might have break clauses on both sides based on performance of car and driver.

The contentious bits for the top drivers are how many days they are available outside race weekends to be at the factory, host sponsors, guests of the team, journalists etc., what outside interests they are allowed to persue and how conflicts are resolved.

For lower drivers the contentious bits are things like travel expenses (private jets, baby!), staff expenses such as personal trainer and medical bills.

Corporate structures will almost certainly be offshore companies somewhere, with the driver paying himself pocket money as salary wherever he lives, to minimise income taxes.

Edited by Sandpit Steve on Monday 10th May 11:08

[belleair302]

Brian Jones ex IMG has written ore contracts than Julian who was at IMG when they were the contracts specialists. Most drivers contracts cover a wide range of Rights and topics, plus caveats regarding performance, behavior and image and social media topics. Number of days at a factory, clothing if a team has a supplier for events, what glasses to wear, watches and shoes too. Travel costs be it leasing a jet or flying with the team commercially. Hotel rooms for the limited entourage or motorhome costs, hire cars and insurance, salary and bonus payments, number of PR appearances for sponsors and private events if necessary. Other additional clauses I have seen include fashion lines, promoting certain products away from on car sponsors, social media sites, video gaming and gambling. Does a driver want a management team to look after everything away from racing and training or will the family or others arrange this? I have seen a thirty six page contract detailing everything from dental insurance through to a helmet museum, two cars per year going into a museum, new road cars at a discount, golf club membership, night club access, pool cleaning and full home management services. Early years contracts can be more tricky as family and managers can be awkward but more senior drivers keep theirs less complex once they are settled. Annual salary and bonus, expected performance at certain points each season and break clauses are the easy part. It’s the additional lifestyle issues that require handling more delicately. In the 90s contracts were more simple today not so with so many interested parties and the involvement of manufacturers and social media experts. Does this help?

[Nampahc Niloc]

Button says in one of his books that at some point in his career he started insisting on being able to keep his trophies. Apparently standard practice is for the team to keep them.

It’s the little details like this that no doubt take all the time to resolve.

[pistonheadforum]

Thanks to those above - much apprecaited and very insightful.

I find it fascinating that the most complex part is not the driving but rather the ancillaries and I do (somewhat jokingly) wonder if the complicated parts are manufactured somewhat by the agents to keep them in gainful employement.

It's clear that with drivers already alligned to other sponsers it's very much an escallation of things they have already agreed to being able to continue when faced with other commitements. Negotatiing over who cleans the pool seems to just burn consultancy time for the agent!

Much easier back in the early years when the garagistas just sorted it out over a pint!

Thanks for taking the time to respone.

[Mr Pointy]

Well these days there will be a considerable amount of time spent specifying the extent of the team's support for the driver's favourite social justice campaign.

[supertouring]

I watched this recently. Some interesting bits but did not dive into the details as much as I was hoping.

[belleair302]

In the 70's a drivers contract would probably be somewhere around four to five pages mostly covering salary, medical, hospitality and travel. Few drivers had agents and many drove anything of the money was there across many disciplines.

The tobacco companies and the involvement of bigger salaries and more fly away races increased contract negotiations.

Many would regard the late Sir Stirling Moss as the first really professional driver and probably Ron Dennis as the most difficult team owner to negotiate with.

All teams today have in house legal departments and will then go to bigger law firms or specialists for the final drafts and then everybody signs.

Bernie was always very simple to discuss things with but they just carried a huge number at the bottom. He always delivered however and was always happy to talk, even if you could not agree.

Yes agents and families can muddy the waters but with patience and guidance from those with experience they soon appreciate the complexities of finding a good lawyer and a decent remuneration and performance packet.

Contracts for Grand Prix circuits and the insurance underwriting costs and contracts are hilarious reading.

[belleair302]

Peter Goodman a St Albans based solicitor could write a fascinating book about F1 contracts as he negotiated a great many and was very much involved with Senna and Williams plus Damon Hill, David Coulthard and a number of other drivers.

Julian Jakobi is more a manager than a lawyer and does represent drivers when discussing contracts but today is just one of many in this area of sports management and sponsorship consulting.

[ch37]

A few drivers have mentioned a list of sports/activities they can and can't do during their downtime.

[Teppic]

Didn’t Mansell’s contract at one point stipulate how may Mars bars would be left for him in his hotel room?

[pistonheadforum]

belleair302 said:

In the 70's a drivers contract would probably be somewhere around four to five pages mostly covering salary, medical, hospitality and travel. Few drivers had agents and many drove anything of the money was there across many disciplines.

The tobacco companies and the involvement of bigger salaries and more fly away races increased contract negotiations.

Many would regard the late Sir Stirling Moss as the first really professional driver and probably Ron Dennis as the most difficult team owner to negotiate with.

All teams today have in house legal departments and will then go to bigger law firms or specialists for the final drafts and then everybody signs.

Bernie was always very simple to discuss things with but they just carried a huge number at the bottom. He always delivered however and was always happy to talk, even if you could not agree.

Yes agents and families can muddy the waters but with patience and guidance from those with experience they soon appreciate the complexities of finding a good lawyer and a decent remuneration and performance packet.

Contracts for Grand Prix circuits and the insurance underwriting costs and contracts are hilarious reading.

Thanks for this - you sound particulary knowledgeable around this area and would be interested to hear of any particular examples (names/brands removed). Sounds like you could have an interesting book to write!

I do remember somebody who was involved in that area explaining the ridiculous riders about having a bowl of M&Ms in the green room with all the red ones removed as a particular part of a contract and this was less about them being divas and more about being able to arrive to the concert and with a quick check could guage how thorough the prep had been (not following that mean other things would likely be missed).

[pistonheadforum]

Teppic said:

Didn’t Mansell’s contract at one point stipulate how may Mars bars would be left for him in his hotel room?

Perhaps a variation on the M&Ms approach.

[pistonheadforum]

belleair302 said:

Peter Goodman a St Albans based solicitor could write a fascinating book about F1 contracts as he negotiated a great many and was very much involved with Senna and Williams plus Damon Hill, David Coulthard and a number of other drivers.

Julian Jakobi is more a manager than a lawyer and does represent drivers when discussing contracts but today is just one of many in this area of sports management and sponsorship consulting.

I guess this is the difference between manager and lawyer - one negotiates and the other makes it wriggle proof should it go to dispute.

[pistonheadforum]

What about performance breaks going against the team rather than the driver? How is that structured as I guess they could simply say the car is fine you are just not driving fast/carefully enough or the driver just sandbags round the track to escape the team next year.

[davidd]

pistonheadforum said:

Thanks for this - you sound particulary knowledgeable around this area and would be interested to hear of any particular examples (names/brands removed). Sounds like you could have an interesting book to write!

I do remember somebody who was involved in that area explaining the ridiculous riders about having a bowl of M&Ms in the green room with all the red ones removed as a particular part of a contract and this was less about them being divas and more about being able to arrive to the concert and with a quick check could guage how thorough the prep had been (not following that mean other things would likely be missed).

the M&M's thing is a band (I think Van Halen) rider.
http://www.thesmokinggun.com/documents/crime/van-h...

[belleair302]

Fleetwood Mac must have had an interesting 'Green Room' rider back in the 70's. Guns and Roses in the early 90's may have been colourful and he most recently the Rolling Stones with Oxygen, flavoured water and just fresh fruits! Keith you let the side down man!

Re F1 I know motorhome placement and security has been an issue and drivers NOT driving cars on the road to and from circuits, Lewis Hamilton in Australia and others!

[abzmike]

I"d have thought that the content of an F1 drivers contract is determined whether he is being paid, or paying for the privilige.

[EdJ]

pistonheadforum said:

I do remember somebody who was involved in that area explaining the ridiculous riders about having a bowl of M&Ms in the green room with all the red ones removed as a particular part of a contract and this was less about them being divas and more about being able to arrive to the concert and with a quick check could guage how thorough the prep had been (not following that mean other things would likely be missed).

Interesting, thanks. I'd never thought about it like that, but it makes sense.

[Gameface]

ch37 said:

A few drivers have mentioned a list of sports/activities they can and can't do during their downtime.

Pretty sure some sportsmen are not allowed to ride motorcycles.