“$30-40 Million salary allowance is inadequate” – Toto Wolff favours cap on drivers’ salaries

Toto Wolff favours a limit on drivers’ salaries and thinks it needs to be even lower than the initially proposed $30 Million.

Mercedes team principal Toto Wolff thinks that if F1 has to implement a salary cap on drivers it should be lower than the originally proposed $30-$40 Million.

F1 introduced a budget cap on the teams from the 2022 season, limiting the team’s expenses to $140 Million. This cap excludes drivers’ salaries as well as the wages of the top three earners in the team.

Back in 2020 when the FIA was scratching its head over cutting costs, an initial proposal of a $30 Million driver salary limit came about. Talk about the same faded for a long period but now again has found its way back into the mainstream discussions.

While many drivers showed ardent opposition to a salary cap, team principals find it to be a good idea.

Talking about a potential cap on drivers’ salaries, Wolff even suggested that the proposed driver salary limit numbers were too far out of proportion with the current cost cap.

“Certainly it has come up as a controversial topic. We can see that we’re facing a very difficult situation in Formula 1 overall. The sport is booming and F1 is earning more money and that is trickling down to the teams, but we have a cost cap.”

“We have $140 Million for 1000 people, with inflation, we haven’t even been able to pay the inflation. And I think the talks about the $30-40 million salary allowance are inadequate when you take that perspective.

“Now clearly drivers will have an opinion on that, and maybe as a driver, I’d say the same thing. But the US leagues that are the most successful in the world have introduced salary caps 15 years ago. It works pretty well over there.”

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Toto Wolff thinks F1 should learn lessons from American sports

The championships in the US like the National Football League and the National Hockey League have hard salary caps. Meanwhile, the National Basketball Association allows cap breaches in certain circumstances.

Major League Baseball has no salary cap but rather a luxury tax, in which teams are forced to contribute extra money if their payroll exceeds a certain threshold.

Wolff suggests that F1 takes inspiration from how American sports operate. He said, “Formula 1 is looking at it without an immediate solution to it.”

“But I think like all the other sports in the world, we need to find a way how we can act sustainably and become independent from sovereign funds or state-owned teams.”

“Therefore it’s certainly clear it’s going to be one of the main areas. Because you can’t simply have a [driver] salary bill in some of the top teams that is $30/40/50million when the rest of the team has to be divided by $140million.

“Having said that, the drivers are tremendous superstars. They deserve to be among the top earners in the sport in terms of direct salaries. They already are.

“And then we need to find a way of unlocking the endorsement. The capability of doing endorsement deals, which is two-thirds, if not more, [of sportspeople earnings] for US American sports teams. But direct salaries, Formula 1 drivers are paid the most.”

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Team principals should also have their salaries limited

Furthermore, Wolff made it clear that he wanted to see the top three non-driver earners’ within the team have their salaries limited. This includes team principals as well.

Ferrari’s Mattia Binotto stood in support of Wolff’s remarks on the salary cap. However, he believes that a decision will not be made before 2026.

“It’s a tricky one, I’m not sure there’s a solution, to be honest,” Binotto said.

“It’s not only a tricky one – it’s not an urgent one. The reason why is that the salary cap for drivers will only affect three or four teams maximum teams, no more than that.

“Those teams that will be affected already have long-term agreements with their drivers. So long that it’s not something that we need to put in place for next year. It will not be before 2026.”

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