Drivers salaries set to increase due to spending caps?

[faa77]

From what I understand the current spending per team is something like:

Ferrari $400m
Mercedes $350m
Red Bull $300m
.
.

and spending will soon be capped to $175m.

Given driver salaries are outside the cap Ferrari will have a surplus $225m, Mercedes $175m etc.

Surely this surplus money will be re-diverted to attract the best drivers and we'll see the top driver salaries increase significantly?

[TheDeuce]

Well the top driver is already at the top team so I suppose they don't have to 'buy' him over just yet

I think you're broadly right of course, those that can afford it will potentially pay over the odds for a driver if they believe that driver brings a unique advantage. F1 teams have always paid silly money if they think it gives them an advantage.. and in buying in a driver, they also take that advantage away from a competitor.

It's not quite that simple though, as we're also entering a future of global economic struggle due to CV, and due to the cost caps the larger teams will need to shed staff anyway. That makes huge salaries a little embarrassing, unfashionably so..

So I expect short-medium term the value of drivers will remain around the same level as today - but longer term if the salaries remain excluded it probably will lead to a new spending race.

I imagine salaries had to be excluded so don't expect the situation to change, just have to see how it plays out.

[Megaflow]

I don't expect driver salaries to go up directly as a result. But here is an idea, what happens if a really well paid driver decides to do some of his own R&D and gift that information to his team...

[mikecassie]

If anything I think drivers wages will reduce now, well for new contracts at least. You are correct, their wages are outside the cost cap, but the recent events with Covid 19 will make teams re-assess their total expenditure. There's a limit to what a driver can bring to a team, far better having the correct designer(s) in place and then getting a driver who will drive knowing he can win rather than one brought into try and win. Ricciardo for instance, he's seen Renault aren't going forward fast enough so has bailed out, if the car was better, he'd have stayed and probably on less money if the wins and a pop at the WDC was realistic.

[Kraken]

I'd be amazed if that happened. Ferrari, for one, have already said they are looking at other series where they can move staff to who would otherwise lose their jobs because of the cost cap.

Now for top designers and aerodynamicists I can see there being a little bit of a salary war. They contribute far, far more to the performance of the car than the driver does.

[Sheetmaself]

Megaflow said:

I don't expect driver salaries to go up directly as a result. But here is an idea, what happens if a really well paid driver decides to do some of his own R&D and gift that information to his team...

What like De La Rosa and Alonso

[sparta6]

Megaflow said:

I don't expect driver salaries to go up directly as a result. But here is an idea, what happens if a really well paid driver decides to do some of his own R&D and gift that information to his team...

This new "structure" is open to many creative arrangements to suit both driver and team

[Exige77]

I don’t think there is any surplus money as such ?

The teams spend what they need and can afford. If they don’t spend it, it doesn’t become surplus and has to be spent.

I think there will be less money around in the coming years so everyone’s income will fall.

[thegreenhell]

Megaflow said:

I don't expect driver salaries to go up directly as a result. But here is an idea, what happens if a really well paid driver decides to do some of his own R&D and gift that information to his team...

I don't think this is very likely. The rules are very clear that the driver's salary is excluded only in so far as providing the services of an F1 driver to the team. Add to this that the world of F1 is so incestuous, with everybody knowing everybody, that it would be almost impossible to set up an R&D operation 'off the books' and keep it a secret. The teams are already audited pretty tightly in terms of wind tunnel and computer modelling time within the limits of the current regulations, so they would need to come up with a convincing way of integrating any outside information into their own work.

Kraken said:

I'd be amazed if that happened. Ferrari, for one, have already said they are looking at other series where they can move staff to who would otherwise lose their jobs because of the cost cap.

Now for top designers and aerodynamicists I can see there being a little bit of a salary war. They contribute far, far more to the performance of the car than the driver does.

This is also a possibility. The top three non-driver salaries in each team are also excluded from the cap.

[faa77]

Just to be clear I didn't mean salaries would increase immediately, I was referring to the future.

[Dermot O'Logical]

I can't understand how the FIA can audit and control a cost cap, given the fact that the teams employ some extremely bright engineers who work with extremely bright lawyers to find and exploit loopholes in the technical regulations, people who have the skills to find and exploit loopholes in financial regulations as well.

Secondly, the cost cap cannot be applied evenly across teams which have widely differing infrastructures already in place.

Finally, and just by way of a comment, knowing that the driver salaries are excluded from scrutiny under the cost cap, for many years Ferrari's driver salaries were paid by Marlboro/Philip Morris. What's to stop sponsors or team investors from supplying goods or services directly to the teams as part of a sponsorship or "loan" deal? I'm thinking along the lines of Haas supplying CNC machines to Ferrari, for instance?

[TheDeuce]

Dermot O'Logical said:

I can't understand how the FIA can audit and control a cost cap, given the fact that the teams employ some extremely bright engineers who work with extremely bright lawyers to find and exploit loopholes in the technical regulations, people who have the skills to find and exploit loopholes in financial regulations as well.

Secondly, the cost cap cannot be applied evenly across teams which have widely differing infrastructures already in place.

Finally, and just by way of a comment, knowing that the driver salaries are excluded from scrutiny under the cost cap, for many years Ferrari's driver salaries were paid by Marlboro/Philip Morris. What's to stop sponsors or team investors from supplying goods or services directly to the teams as part of a sponsorship or "loan" deal? I'm thinking along the lines of Haas supplying CNC machines to Ferrari, for instance?

Endless possibilities. Give a a few years and we'll find out what the trends are when it comes to circumnavigating the spirit of the rules and can start a fresh debate on how they might actually be enforced

I feel initially this is a change of direction more than an overnight solution.

[faa77]

Dermot O'Logical said:

I can't understand how the FIA can audit and control a cost cap, given the fact that the teams employ some extremely bright engineers who work with extremely bright lawyers to find and exploit loopholes in the technical regulations, people who have the skills to find and exploit loopholes in financial regulations as well.

Secondly, the cost cap cannot be applied evenly across teams which have widely differing infrastructures already in place.

Finally, and just by way of a comment, knowing that the driver salaries are excluded from scrutiny under the cost cap, for many years Ferrari's driver salaries were paid by Marlboro/Philip Morris. What's to stop sponsors or team investors from supplying goods or services directly to the teams as part of a sponsorship or "loan" deal? I'm thinking along the lines of Haas supplying CNC machines to Ferrari, for instance?

They'd make the penalty so cheating not even worth considering

[TheDeuce]

faa77 said:

They'd make the penalty so cheating not even worth considering

Undisclosed settlement when Ferrari cheat then! "They did something, we did something... The end".

That'll keep it in check

And that's concerning an infraction which was measurable and detectable. Bernie will confirm that complex financial misdirection is very hard for any court to understand sufficiently to decide if a rule was broken.

Personally I reckon the new rules will be exploited and it will take a good few years to refine both the rules and the method of control before this becomes effective. Same as most other new rules in F1.

[sparta6]

TheDeuce said:

Personally I reckon the new rules will be exploited and it will take a good few years to refine both the rules and the method of control before this becomes effective. Same as most other new rules in F1.

And therein lays one of modern F1's biggest achilles heels --- too many rules, both on track and off track, many of which seem complex for a mass audience to understand, if they can be arsed to try and understand them in the first place.
TV audiences have been dwindling for years. Coincidence ?

Meanwhile the rules of tennis and football etc have remained the same for decades.
Nice and straight forward for viewers to follow and just focus on the sporting action.

Has anyone ever counted just how many regulations consume hybrid era F1 ?

[TheDeuce]

sparta6 said:

And therein lays one of modern F1's biggest achilles heels --- too many rules, both on track and off track, many of which seem complex for a mass audience to understand, if they can be arsed to try and understand them in the first place.
TV audiences have been dwindling for years. Coincidence ?

Meanwhile the rules of tennis and football etc have remained the same for decades.
Nice and straight forward for viewers to follow and just focus on the sporting action.

Has anyone ever counted just how many regulations consume hybrid era F1 ?

This is where F1 differs from every other sport, and has done so way before the current hybrid era. It's a sport in which the rules of play and/or the tools of play change every year.

It is indeed a challenge for newbies to understand what the hell is going on. Show a passionate petrol head their first weekend of a GP and they will surely question why the cars have tyres that are good for just a single angry quali lap..

TV viewing actually hasn't dwindled though - since liberty took over there has been an increase overall. Same in terms of attendance at GP's. Obviously all that hard work might come to nothing now the world has changed... But equally possible is that those sat at home with sod all else to do might finally get their head around how F1 works - assuming we do have some F1 for those people to watch..

[sparta6]

It will require more than a few months for anyone to fully absorb F1 regulations.
Then they'll get changed again anyway

Then you get different interpretations of the regs by different stewards on different drivers at different circuits, resulting in different penalties.

It's easy to see why football is king