How Do Formula 1 Contracts Work? – Global Sports Planet

Many young children dream of emulating their formula one heroes with their jet-setting lives and flashy cars. The reality is that only twenty drovers are employed full-time for a single season, and out of these, there can only be one winner every year.

Formula one contracts are the glue that holds the drivers to their respective Formula One teams. Contracts define the relationship boundaries between the driver and the Formula One team. They are always fixed terms contracts that can be extended if both parties agree.

When a formula One team offers a contract to an aspiring formula one driver, it is a culmination of hard sacrificial work on the driver\’s side. The first contract a driver sign for the rookie season is generally one-sided in the team’s favor.

If you\’re looking for some F1 merchandise, check out the awesome stuff at the official F1 store here.

Formula One Contracts

They define the relationship between the employer (the formula One team) and the driver (employee). They are structured as a fixed-term contract which offers the driver some security while in force while also maintaining flexibility to respond if the driver does not perform at the anticipated levels.

Under the typical Formula, One contract are clauses defining each party\’s contribution to the relationship. The usual responsibilities include.

The Formula One Teams responsibility

The teams have the following responsibilities to their drivers:

To develop a competitive car that can meet the required performance.
To keep the car within a certain weight range.
To pay the driver the stated earnings (this is not always the case, and some “pay drivers” bring their funding).
To provide all the required infrastructure required of an F1 team.
There are also clauses regarding travel arrangements, including the provision of hotel accommodation and meals.
Clauses regarding the provision of a vehicle off track may include free cars, long-term loans, or short-term loans.
Keeping the necessary insurance arrangements in place.

The Formula One Drivers\’ Responsibility

The drivers have some obvious but also some less obvious responsibilities.

Formula One drivers must have and maintain an F1 Super License.
Drivers must maintain a very high level of fitness.
The formula One driver must control their weight within a very small band.
The drivers must agree to attend all races around the world.
Generally, the driver only keeps a trophy with the team keeping possession of the original.
There are clauses relating to the jewelry a driver is allowed to wear.
Drivers must attend press events and keep the team\’s reputation intact.
Drivers are not allowed to talk about any racist views they may hold.
Drivers are allowed to have social media accounts but have strict guidelines regarding their use.
Drivers must maintain safety standards and may not endanger other drivers or officials.
Sponsorship deals are shared with the team.
Drivers must agree to participate in random drug testing.

Both parties generally have an escape clause built into the contract, which allows them t part ways under certain circumstances.

The clauses can be used when

It becomes politically untenable to use the driver\’s services. It happened during the 2022 season with Nikita Mazepin after the sanctions were imposed on Russian sports people during the Ukrainian invasion.
The driver damages the reputation of the team.
The driver becomes embroiled in a racist situation (Red bull just sacked their reserve drive, Juri Vips, for using racist language)
The driver doesn’t perform to expectations.
The team doesn’t perform to expectations.

If a driver is willing to leave a team mid-season, some contracts can be “bought out” by the new team.

What Is The State Of Each Formula One Drivers Contract?

Each driver has an exclusive contract with the respective team.

The terms and conditions will depend on his success (or failure) on track and his historical value.

Each driver\’s position for the 2022 period is listed in the table below.

Driver	Team	Points	Driver Age	Contract Until	2022 Earnings
Max Verstappen	Red Bull Racing	175	24	2028	$43 million
Sergio Perez	Red Bull Racing	129	32	2022	$8 million
Charles Leclerc	Scuderia Ferrari	126	24	2024	$12 million
George Russell	Mercedes AMG F1	111	24	2023	$5 million
Carlos Sainz	Scuderia Ferrari	102	27	2022	$10 million
Lewis Hamilton	Mercedes AMG F1	77	37	2023	$40 million
Lando Norris	McLaren Racing	50	22	2025	$5 million
Valtteri Bottas	Alfa Romeo Racing	46	32	2025	$10 million
Esteban Ocon	Alpine F1	39	25	2024	$5 million
Fernando Alonso	Alpine F1	18	40	2022	$20 million
Pierre Gasly	Scuderia Alpha Tauri	16	26	2023	$5 million
Daniel Ricciardo	McLaren Racing	15	32	2023	$15 million
Kevin Magnussen	Haas F1	15	29	Multi-year	$6 million
Sebastian Vettel	Aston Martin F1 Team	13	34	2022	$15 million
Yuki Tsunoda	Scuderia Alpha Tauri	11	21	2022	$1 million
Guanyu Zhou	Alfa Romeo Racing	5	22	2022	$0.75 million
Alexander Albon	Williams Racing	3		2022	$2 million
Lance Stroll	Aston Martin F1 Team	3	23	No end	$10 million
Mick Schumacher	Haas F1	0	23	2022	$1 million
Nicholas Latifi	Williams Racing	0	26	2022	$1 million

Max Verstappen – Red Bull Racing

Verstappen has proven to be almost a match for Sir Lewis Hamilton, and given the right car, he can achieve front row grid positions, race wins, and championship success.

In 2021, after a close-fought season, the FIA race director, Michael Massi, gifted Verstappen the championship over Lewis Hamilton.

It was not a reflection on Verstappen\’s ability because he proved o be a match for Hamilton and easily qualified as one of the two top drivers on the circuit.

In 2022 he is the championship leader, and before the 2022 Silverstone race, he has 175 championship points against his nearest rival (and teammate) Sergio Perez, who has 129 points.

Before the 2022 season, he has won 33 races and one world championship.

Verstappen is an exceptional driver, and as such Red Bull Racing has secured his services by having him sign a six-year contract that lasts up until 2028. It is one of the longest contracts in the history of Formula One racing.

His salary increased from $25 million a year to $50 million a year, which means that, excluding any other sponsorship deals his agents can put together (and there will be many), he will earn $300 million during the life of the contract.

Sergio Perez – Red Bull Racing

Sergio Perez \”Checo\” is the number two driver at Red Bull Racing and has been in place since the 2021 season.

Perez started racing in Formula One in 2021 when he joined Sauber.
He joined team McLaren for the 2013 championship.
He transferred from McLaren to join Force India in 2014.
In 2019 he transferred to the Racing Point team
In 2021 he transferred to Red Bull racing

Perez is a great example of how luck plays a big part in a Formula One Drivers career. In Red Bull Racing, he has proven that he is a top-rated driver able to achieve race wins, but because of the teams he was part of in the early days, he has not had the successes of some of the other drivers.

In his Formula One career, Sergio Perez has won three races, and before the 2022 championship, his best position overall was 4^th.

Checo is presently on a two-year contract that expires at the end of 2022. His salary is $8 million per season. Whether his contract will be renewed will depend on his performance throughout the year and what other drivers are coming through in the pipeline.

Charles Leclerc – Scuderia Ferrari

Charles Marc Hervé Perceval Leclerc is the lead driver for Scuderia Ferrari.

He joined the F1 circuit in 2018 when he contracted to drive for Sauber.

In 2019 he joined Scuderia Ferrari and had always been considered a future star. With the new 2022 regulations and Ferrari\’s new car, he started the season with several successes and has achieved two wins and six pole positions.

For a while, it seemed that he was on track to win the 2022 World Championship, and in the early stages, he was heading the leaderboard.

Unfortunately, the car has disappointed him with a few DNF (Did Not Finish) results.

He is in third place in the drivers\’ championship. If Ferrari can get their act together and deliver a reliable car with George Russel, Leclerc is probably Verstappen’s most competent long-term rival.

His contract lasts until 2024, and his annual salary is $12 million. Based on his results, his contract is likely to be renewed.

George Russell – Mercedes AMG F1

George Russell is the next big thing in Formula One.

He was part of the Mercedes-AMG Petronas Motorsport Junior driver program in 2017.

He entered Formula One 2019, driving for Williams until the 2021 season. Russel managed commendable qualifying results with what was probably the worst performing car on the track (always beating his teammate). He managed a podium finish during the Belgian Grand Prix, finishing second behind Max Verstappen.

During the 2020 Sakhir Grand Prix, he stood in for Lewis Hamilton during his COVID quarantine period. In the race, he qualified second on the grid and led the race for 22 laps until tire and team failures forced him back to a final finishing position of 9^th place.

He has joined Mercedes AMG F1 for the 2022 season and, despite driving a second-rate car, has finished in the top five positions (before Silverstone).

He is on a two-year contract that expires at the end of 2023 and earns $5 million. His future contract will be renegotiated based on his current form, and his earnings will increase to more competitive levels.

Carlos Sainz – Scuderia Ferrari

Sainz is the number two driver for Scuderia Ferrari.

He started his Formula One career in 2015 when he contracted with Scuderia Toro Rosso alongside Max Verstappen.
He joined the Renault team and partnered with Nico Hülkenberg, and finished the season with 54 points.
He stayed with Renault until the end of the 2018 season, whereafter he joined McLaren, and during the 2020 season, he won 105 points, placing him sixth in the river s championship.
In 2021 he joined Scuderia Ferrari, and before Silverstone, he was placed 5^th in the drivers’ championship.

Sainz is on a two-year contract that ends at the end of 2022, earning $10 million. Based on his current form, the contract will be extended as long he wants it.

Lewis Hamilton – Mercedes AMG F1

What is there to say about Sir Lewis Carl Davidson Hamilton that has not been said before.

He is a seven-time world championship leader and has only driven for two teams (Williams and Mercedes) in his Formula one career.
He came second in the world championship in his rookie season (the only driver to have done so).
In his second season, he won the world championship.
In his career, he has raced in 298 events and achieved 184 podiums (61%)
He has won 103 races from 103 pole starts.
He has won seven world championships.
He has won 59 fastest lap awards.

He is an outspoken campaigner for equal opportunities and the end of racism in Formula One (something shared by his team). He was instrumental in forming the Hamilton commission intended to find ways motorsport should engage a greater number of young people from black backgrounds.

Following the report, he formed the charity Mission 44, where he committed £20 million of his funds to help young people from under-represented backgrounds achieve their ambitions in the world.

He also spoke out about human rights during the Bahrain Grand Prix.

In 2021 he was knighted by the British monarchy, one of only four racing personalities.

Sir Jack Brabham – 1979
Sir Stirling Moss – 2000
Sir Jackie Stewart – 2001
Sir Lewis Carl Davidson Hamilton – 2021

Lewis Hamilton was the first recipient of the inaugural Laureus Athlete Advocate of the Year Award in 2021.

He remains a gracious and gently spoken individual who has not allowed his successes to affect his humility.

His success in his racing career and his stance about fairness earned him ten years of contracts with Mercedes AMG F1 and an annual salary of $50 million. The ten years end at the end of 2023, which is anticipated, he will retire.

Lando Norris – McLaren Racing

Norris is one of two rivers on the McLaren racing team.

He started his Formula One career when he signed on as McLaren\’s junior driver.
His first race was in 2019 with McLaren, where he partnered with Carlos Sainz Jr.
He continues to work with McLaren, who unfortunately has not produced a winning car in the 2022 season.
He achieved a pole position in 2021.
He hasn\’t won any races; however, this reflects on the car more than his skills.
He is presently (before Silverstone) seventh in the 2022 world championship.

Norris\’s original contract has been extended to \”at least\” 2025, and he earns $5 million per annum.

Valtteri Bottas – Alfa Romeo Racing

Bottas joined the Alfa Romeo Racing team in 2022 after five years at Mercedes.

He started in Formula One racing alongside Pastor Maldonado, driving for the Williams-Renault team.
In 2017 he joined Mercedes (replacing Nico Rosberg) and raced alongside Lewis Hamilton.
He never was comfortable at Mercedes, and for the 2022 years, he has joined Alfa Romeo Racing.

Bottas is an incredibly talented driver who always puts fairness above results. Driving for Alfa Romeo Racing seems to have met his sweet spot, and while the car is not capable of a front-row finish, he has achieved impressive results in 2022.

He has won 10 races, placed second in the world championship twice, and achieved twenty pole position starts.

As one of the nicest, most honorable drivers in the circuit, he has signed a contract with Alfa Romeo Racing until 2025 and earns $10 million annually.

Esteban Ocon – Alpine F1

Ocon is the number two driver for Alpine F1.

Ocon began his career mid-season in 2016, when he replaced the incumbent driver, Rio Haryanto, whose sponsors failed to meet their obligation.
In 2017 he joined the Force India Team.
In 2019 he joined as the Mercedes reserve driver after the new owner of Force India insisted his son (Lance Stroll) replace Ocon.
In 2020 he signed to join the Alpine F1 racing alongside Daniel Ricciardo.
He has won one race and is currently 9^th in the drivers’ championship.

Ocon has a contract signed with Alpine F1 until the end of 2024 and presently earns $5 million annually.

Fernando Alonso – Alpine F1

The oldest river in the series, Fernando Alonso, races alongside Ocon at Alpine F1.

Alonso has a long and distinguished career in Formula One, which he first drove in 2003.

He first drove an F1 car in a race in 2003 when he signed with Renault.
In 2007 he moved to McLaren, where he drove alongside Lewis Hamilton
After a difficult relationship at Maclaren, he returned to Renault in 2008.
In 2010 he moved to Ferrari.
In 2015 he returned to McLaren for a disastrous four years, driving the weakest car on the track.
He took a year off from Formula One in 2020 and returned to Renault for the 2021 season.

Alonso is hed up as one of the greatest drivers in Formula One.

In his career, he has won 32 races, two world championships, been placed second in the championship three times, and achieved 98 podiums, 22 pole positions, and 23 fastest laps.

He signed with Renault until the end of 2022 and earned $20 million annually.

Pierre Gasly – Scuderia Alpha Tauri

Pierre Gasly drives the Scuderia Alpha Tauri alongside Yuki Tsunoda.

He drove as the reserve driver for Scuderia Alpha Tauri in the 2017 Malaysian Grand Prix.
In 2018 he joined the Toro Rosso team as a full-time driver.
In 2019 he joined the Formula One circuit driving for Red Bull racing alongside Max Verstappen.
He was demoted to Toro Rosso mid-2019 season. Alex Albon was promoted up.
In 2020 he moved to Scuderia Alpha Tauri and had an impressive record at Alpha.

He has won one race, three podiums, and three fastest lap awards.

He is contracted to Scuderia Alpha Tauri and earns $5 million annually.

Daniel Ricciardo – McLaren Racing

The funny man of Formula One racing is Daniel Riccardo.

Ricciardo\’s first Grand Prix was at the 2011 Silverstone race.
In 2012 he joined Toro Rosso, where he drove alongside Jean-Éric Vergne.
He joined the Red Bull team for the 2014 season.
For the 2019 year, he left Red Bull for Renault.
In 2021 he joined McLaren.

He has won eight races, achieved 32 podium finishes, 215 fastest laps, and has come 4^th in the world championship twice.

By admission, he has not performed well in 2022 and is currently only in the 13^thposition in the drivers’ standings.

He is contracted to McLaren racing until the end of 2023 and earns $15 million yearly.

Kevin Magnussen – Haas F1

Magnussen drives for Haas F1.

Magnussen first drive for McLaren in 2014.
He joined Renault in 2016
He joined Haas from 2017 to 2020
Due to a rich father and sponsorship money, he was replaced by the untalented Russian driver, Nikita Mazepin, for the 2021 season.
After the sanctions imposed during the full-blown war in Ukraine, Kevin Magnussen replaced Russian driver Nikita Mazepin mid-season in 2022.

He is contracted through 2025 on a multi-year agreement and earns $6 million annually.

Sebastian Vettel – Aston Martin F1 Team

Sebastian Vettel is the lead driver for the Aston Martin F1 Team alongside Lance Stroll.

He started in Formula One racing for the BMW Sauber in 2006.
He joined Toro Rosso in 2007
In 2009 he was promoted to the Red Bull team
In 2015 he joined Ferrari
In 2021 he joined the Aston Martin F1 Team

He has won 53 races, the world championship four times, 122 podiums, 36 fastest laps, and 57 pole position starts.

Vettel is contracted to the end of 2022 and earns $15 million a year. It is generally accepted that he will retire at the end of 2022.

Yuki Tsunoda – Scuderia Alpha Tauri

He drove with Pierre Gasly and joined the team in AlphaTauri.

After showing promise in his rookie season, his performance since then has been disappointing, and in 2022 he has only won 11 points.

He is contracted with Scuderia Alpha Tauri to the end of 2022 and earns $1 million.

Guanyu Zhou – Alfa Romeo Racing

In 2022, which is his rookie year, he races alongside Valtteri Bottas.

He is contracted for one year and earns $0.75 million per annum.

Alexander Albon – Williams Racing

Albon has had a varied career with some notable disappointments.

He joined Toro Rosso in 2019and mid-season and was promoted up to the Red Bull car, replacing Pierre Gasly.
In 2021 he was demoted to the team reserve driver and replaced by Perez.
He joined Williams in 2022.

He is contracted to 2022 and earns $2 million annually.

Lance Stroll – Aston Martin F1 Team

Lance Stroll\’s father owns the Aston Martin F1 team, and while there is no question he is a talented driver, his contract is always secure.

He is currently third last in the championship stakes.

His contract has no known end date, earning $10 million per annum.

Mick Schumacher – Haas F1

Son of the famous Michael Schumacher races as one of the two Haas F1 drivers.

The talent is luring inside; however, Schumacher has not managed to consistently produce the same way his teammate, Kevin Magnussen, has.

He is currently second last in the championship.

He is contracted to end 2022 and earns $1 million.

Nicholas Latifi – Williams

Latifi is another river that has battled to shine in 2022 and is last in the championship stakes.

He is contracted to end 2022 and earns $1 million per annum.

Conclusion

The terms and conditions of a Formula, One driver\’s contract will generally depend on the driver\’s past success and the potential for future success. Salaries range from $0.75 million for a driver in the rookie year through to $50 million a year for Lewis Hamilton and Max Verstappen, the two top drivers.

Each team will have its contract, which will apply to each driver.