Toto Wolff supports the introduction of a driver salary cap in Formula 1, mentioning American sports as an example of why it would work.
Mercedes team principal Toto Wolff has backed ideas for F1 to implement an American-style driver salary cap after proclaiming the country’s sports leagues are the most successful in the world.
This comes as F1 is experiencing a period of significant growth, with record attendance and watching figures increasing and as a result allowing some teams to make a profit.
Last season, a much-discussed cost cap of $145 million was implemented, with a $5 million reduction this year and a $135 million cap in 2023-2025. However, the remuneration of drivers is currently excluded from the $140 million budget cap for constructors for the 2022 campaign.
Wages for drivers are another large expense for top teams like Mercedes and Red Bull. According to Forbes, Lewis Hamilton earned $62 million last year, and Max Verstappen’s new contract with Red Bull through 2028 is worth 40 million euros per year.
Although Verstappen had stated that imposing a driver salary cap would be absolutely wrong because he and the other racers put their lives in danger, Wolff sees the opposite side of the debate in terms of teams’ escalating costs, which affect all of their employees.
“Certainly, it has come up as a controversial topic… We can see that we are facing a very difficult situation in Formula 1 overall,” the Mercedes boss said. “The sport is booming and Formula 1 is earning more money and that trickles down to the teams but we have a cost cap. We have $140million for 1,000 people.”
“With the inflation, we haven’t been able to pay the inflation and I think that the talk about a $30million or $40million salary allowance is inadequate when you take that perspective.”
“Clearly, the drivers will have an opinion on that and maybe as a driver, I would say the same thing but the US and American [sports] leagues that are the most successful in the world introduced salary caps 15 years ago.”
“It works pretty well over there and Formula 1 is looking at it without an immediate solution to it.”
“I think, like all the other sports in the world, we need to find a way of how we can act sustainably and become independent from sovereign funds or state-owned teams.”
The American sports stars have a prominent presence endorsing brands, which is uncommon in Formula One.
“We need to find a way to unlock the capability to do endorsement deals which are two-thirds, if not more for US American sports teams,” Wolff said in response.
The F1 budget cap currently exempts team principals and a handful of other high earners within an F1 team. Despite the fact that it may jeopardise his personal earnings, Wolff believes that these salaries should not be ignored.
“By the way, one more point, we shouldn’t be excluding the top earners in the team… In order to make it sustainable, everyone should be covered by the cost cap,” Wolff added. “It is not only the drivers but the team principals and the senior management.”
“You can’t simply have a salary being in some of the top teams of $30-40-50million when the rest of the team needs to be divided in $140million.”
“But having said that, they are tremendous superstars, they deserve to be among the top earners in the sport – in terms of direct salaries, they already are.”
