Hamilton now facing rush to sign new deal after driver salary cap agreed

Formula 1 is set to introduce a driver salary cap from 2023 following unanimous approval from all the teams which could have significant ramifications for Lewis Hamilton.

GPFans understands an exact figure has yet to be determined, although it is believed a total of $30million combined for a team's two drivers is likely to be the bar. The teams will then determine its own split.

The plan was discussed during Monday's F1 Commission video conference call involving FIA president Jean Todt, outgoing F1 CEO Chase Carey and successor Stefano Domenicali, as well as representatives from the 10 teams.

Although the proposal was universally agreed upon, the exact details have yet to be finalised. Once achieved, they will then be put forward to the World Motor Sport Council for ratification.

The decision would now appear to advance Hamilton's talks with Mercedes if he is to sign a new multi-million-pound contract, while it also potentially scuppers the possibility of the 35-year-old simply signing a one-year holding extension to his current deal.

Mercedes motorsport boss Toto Wolff has previously made clear he and Hamilton have yet to find the time to sit down and discuss a new contract, although there was no rush to do so given the relationship between the two and the desire of the six-time F1 champion to continue.

For Hamilton, it is now a question of when the details of a driver salary cap are finalised.

If Hamilton signs a new three-year contract up to and including 2023 before the cap becomes part of the regulations, Mercedes would be obliged to honour that contract for its duration.

If he does so afterwards, while he would be paid the new terms for 2021 and 2022, he would then be capped for 2023.

As it is understood Hamilton currently earns in the region of £30million [$38m] per year, the drop in salary for 2023 would be considerable given the combined two-driver total could be $30m [£22.7m].

A potential one-year extension on current pay, that would then have allowed Hamilton and Wolff more time next season to discuss a longer-term deal from 2022 onwards, has also been mooted, only for the impact from '23 to kick in.

Wolf has previously expressed a desire to avoid that scenario. He said: “We are in a new world and COVID really has changed the way we do business and the environment.

“I think everything should be done this year. I don’t want to go into any other negotiation mid-year next year and drag it on again.

“We all need to be concentrated on our job - Lewis driving, me running this team and Ola [Kállenius, Daimler chairman] turning the big wheel.”

The F1 Commission has also agreed to a cap on the salaries of the three highest-paid team members outside of the drivers. In many cases that is likely to be a CEO, team principal and technical director.

Before you go...

Gasly signs with AlphaTauri for 2021

McLaren trying to crack chassis token issue ahead of Mercedes switch

Related

More F1 news

Latest F1 news

F1 News Today: Max Verstappen exit clause ‘impossible’ to block as three drivers fight for seat

• 24 minutes ago

Fans blast Mercedes after blanking George Russell and praising Lewis Hamilton in Barcelona debrief

• Yesterday 22:45

Adrian Newey warned Aston Martin of 'problems' before season began claims Sky F1 insider

• Yesterday 21:57

Aston Martin announce Lance Stroll replacement at Austrian Grand Prix

• Yesterday 20:45

F1 insider claims Max Verstappen exit clause now 'impossible' for Red Bull to block

• Yesterday 19:55

Aston Martin handed simple solution to 2026 woes: 'Get the f*** on with it' says F1 legend

• Yesterday 18:55