Several of Formula One’s smaller teams have been criticised for employing ‘pay drivers’. But, as @DieterRencken explains, not all pay drivers are alike, and without them it’s doubtful some teams could continue.
There are two overriding truisms is motor racing: The sport is (increasingly less) dangerous, and it is (increasingly more) expensive.
To these could be added a third: The faster you go, the more expensive it gets. Therefore, the costs of competing in the fastest (and most glamorous) category of all, namely, Formula 1, are truly astronomical. For numbers, refer to last week’s feature on F1’s costs.
It has always been thus: regardless of numerous attempts by the governing body, the FIA, to reduce the costs and barriers to entry, the fact is that all four recent entries into F1 folded within four years, while various domestic F1 series that once prevailed are no more. Indeed, the only events run for contemporary cars are rounds of the F1 world championship.
Since that first recorded motor race in 1895, run between Paris and Bordeaux and back, the rich (and famous) have always held an advantage in the sport. Simply put, without money it would be impossible to enter motor racing, unlike tennis where the only requirements are racquet and ball, or soccer, where the only cost is for a leather bladder.
Indeed, so acute are the cost versus performance challenges at the pinnacle that over 130 F1 entrants have attempted the sport during the FIA world championship’s 68-year existence. Of these, just ten survive. True, some were subject to takeovers – think Tyrrell/BAR/Honda/Brawn/Mercedes, all of which share the same company number, or Stewart/Jaguar/Red Bull (ditto) – but the purified figure is estimated at 80 start-ups.
Therefore F1’s mortality rate is roughly equal to that of cheetah in the wild, and thus current teams require preservation of sorts, particularly as they employ an average of 500 heads each. Consider their families and something like 2,000 lives would potentially be affected if one folds. Go back just 30 years, and the average team F1 strength was closer to 80.
Imagine, then, the commercial pressures on current team principals, who carry such responsibilities over and above the duties of running cutting-edge businesses that are publicly audited by rabid fans every fortnight; with fortunes that change dramatically – as they did for Manor – in split-seconds.
F1’s plummeting TV ratings plus a commercial rights holder who siphons off around a third of the sport’s £1.2bn annual underlying revenues (turnover of around £1.6bn – operating costs of ±£400) ratchet the pressures to a point greater than at any point during this millennium, yet overall global interest in fossil-fuelled sports is tailing off. How best to square this vicious circle?
Increasingly teams are resorting to budget-linked drivers. Some of these have unfairly been tarred by the ‘pay driver’ brush.
There have been past examples of true ‘pay drivers’, whose only qualifications were fat wallets able to cover the costs of reasonable results in lower categories. Italian nobleman Giovanni Lavaggi (memorably nicknamed Johnny Carwash) is a celebrated example thanks to his three non-qualifications from six attempts with Minardi in 1996.
But some have applied the same all-embracing term to the likes of Fernando Alonso, who attracts support from sponsors because of his high-profile status within the sport. To denigrate a world champion as a ‘pay driver’ is clearly absurd, but those familiar with the sport’s history will know he isn’t the only one who arguably fits the model.
Paying drivers have been around for as long as F1 has existed. The 1950 British Grand Prix, the very first world championship round, had 26 starters, of which just nine drivers were entered by “works” teams. The balance were wealthy privateers or individuals bankrolled by benefactors.
This trend continued into the late sixties, with many a team running third cars for paying individuals, or even selling cars outright to privateers, who covered their own costs. What is the difference between privateers covering their own costs, those supported by benefactors (think Lord Hesketh / James Hunt) or commercial support? Essentially none.
Then, in 1968 F1’s rules were changed to permit commercial sponsorship. The first driver to exploit the new regulations was John Love, a privateer who sweet-talked the Gunston tobacco brand into covering the costs of competing in his nearest round of the world championship, the South African Grand Prix. Lotus followed suit with Gold Leaf sponsorship at the Spanish Grand Prix, five months later.
In one swoop F1 was democratised: Anybody who bagged a sponsor – by hook or by crook or via driver – could enter, provided they fulfilled basic entry requirements. Get your licence, chassis, tyres and – typically – a Cosworth DFV engine at £7500, a Hewland DG300 transmission, and you were good to go. The 1970 South African Grand Prix entry list featured six Lotuses, five Marches and three Brabhams in addition to various other makes, yet “works” teams entered two cars each.
Tellingly, of the “extra” cars, one (Lotus) was entered for double world champion Graham Hill; STP covered the costs of Mario Andretti’s March. Thus Hill and future champion Andretti were ‘pay drivers’! Others who later paid for March drives included Ronnie Peterson (1970) and Niki Lauda (1971/2). Indeed, the well-off Austrian ‘upgraded’ to BRM for 1973 by taking out further bank loans, secured by life insurance policies.
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As the decade wore on, so tobacco companies increased their funding, with Marlboro leading the way via its “World Championship Team”, which covered paid drives for such as (1982 champion) Keke Rosberg. In 1991 Mercedes-Benz facilitated Michael Schumacher’s F1 debut with Jordan by cheque for £100k, niftily disguised as Tic-Tac sponsorship (a DTM partner) to avoid a clash with Ford power.
The great Ayrton Senna was unique amongst McLaren drivers of his era for displaying non-team branding on his overalls, namely that of Banco Nacional. Thus he reduced his fiscal demands on the team, and therefore the deal was arguably a case of driver-linked sponsorship. Who would dare call Senna a pay-driver? Yet, by the broadest definition, he ticked that box.
Five, possibly six, “pay-driver” world champions, and counting…
However, such incidences tailed off as governments increasingly outlawed traditional tobacco advertising, forcing the brands to embrace motorsport sponsorship with a vengeance. Suddenly there was no longer a need for pay-drivers as the teams were flush, with McLaren test drivers (note plural) earning well over £100k in a single season, and race drivers routinely pulling in mega-millions off the back of nicotine.
As tobacco sponsorship was systematically outlawed, so car companies took over the big spending. A paddock story has it that shortly after assuming the chairmanship of Ford Motor Co in 2001, William Clay Ford perused the company’s payroll, then questioned “Who the hell is this Edmund Irvine, who earns more than I do?’. The answer was, of course: Eddie Irvine, then racing for Ford’s Jaguar subsidiary.
Apocryphal the tale may be, but it was credible at the time, pointing to the astronomical driver wages paid back then. With large amounts of dosh sloshing about, teams had no need to question whether drivers had funding; if anything, it likely counted against them, for teams would be forced to accommodate the demands of external sponsors. In this day and age a driver of Irvine’s calibre would likely need to provide funding.
What changed in the interim? First, since the bulk of manufacturers exited in 2009 no single product group has stepped into the void; second, as F1 increasingly embraced pay-TV, so audience ratings went into free-fall, making F1 less attractive. Third, F1 has lost its gloss: This week English Premier League football team Arsenal struck a five-year shirt deal with Emirates worth £200m – few, if any, current F1 deals run to those levels.
Finally, from 2013 the commercial rights holder, then headed by Bernie Ecclestone on behalf of venture fund CVC Capital Partners, introduced an inequitable revenue structure that favours the Big Four (Mercedes, Ferrari, Red Bull and McLaren) through to end-2020. To put the scale of their bonuses into perspective, consider: Ferrari would earn more per season even if both its cars crashed out in the first corner of every event through to 2020 than would Force India, even if the latter serially won both world titles.
With that sort of imbalance, is it any wonder that a) only the Big Four can afford the best drivers going, b) no team other than a Big Four outfit has won a grand prix since 2013, leaving the rest to fight over morsels, c) on the basis of such processions, sponsors have fled, and d) TV cameras invariably linger on front-runners, mainly Big Four entries.
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Thus the likes of Force India, Williams, Haas and Sauber are forced to look at alternatives, with driver-linked budgets being the most attractive. Outside the Big Four, Renault and Toro Rosso have parent companies able and willing to underwrite their budgets, although it cannot be coincidental that Spanish sponsors proliferated on first the latter’s cars, then the former’s, in tandem with Carlos Sainz Jnr’s career moves.
Indeed, after switching teams last October the Spaniard unusually appeared cap-less at three events. Asked why, he mentioned a “sponsor issue” – his backer Estrella was in negotiations with Renault about how best to accommodate the beer brand logo on his caps. Which shows that even STR and Renault embrace driver-linked deals.
The current pay-driver outcry was driven by Williams’ signing of the inexperienced pairing of Lance Stroll (heading for his sophomore F1 season) and Sergey Sirotkin (rookie), with some folk who should know (a lot) better vehemently criticising a team with an illustrious history for selecting a brace of drivers whose wallets allegedly overshadow their talent.
In the process, these critics overlook that Robert Kubica, the other candidate for the seat, is equally unproven due to injuries sustained in a 2012 rally accident, and had also been linked to substantial funding.
Here, though, was a team that at one stage delivered a roll-call of champions: Alan Jones, Keke Rosberg, Nelson Piquet, Nigel Mansell, Alain Prost, Damon Hill and Jacques Villeneuve, in all but two cases providing their only titles. How dare Williams sully its reputation by signing pay-drivers, went the refrain.
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The bottom line is that few drivers on the current grid do not somehow contribute to their upkeep, whether through direct or indirect links to partners, engine suppliers or management. In fact, were it not for driver-linked partners it is doubtful whether half the 2018 field could afford to compete. Thus the critics should thank pay-drivers, not vilify them.
There are, though, various categories of funded drivers, i.e. those who contribute commercially:
1) Drivers able to pick and choose teams, with a group of partners anxious to be associated with them. Alonso springs to mind. Sergio Perez, too, deserves drives on merit, but has Mexican backers who make him commercially attractive to teams.
2) Drivers placed by major teams as part of their development, usually with some quid pro quo in the form of engines or payments. Force India’s Esteban Ocon (Mercedes) and Sauber’s Charles Leclerc (Ferrari) fit this category, with Pascal Wehrlein having done so last season.
3) Junior team graduates. Toro Rosso’s drivers generally fit this profile, having come up through Red Bull ranks. Their progress has been paid every step of the way; making them “pay-drivers” of sorts. Eventually they repay the faith through lower wages, with Dan Ricciardo being a prime example of this category.
4) Drivers who, literally, bought their way into F1, whether through family or external commercial support. Would Stroll or Sirotkin have moved into F1 as fast without such support? Arguably not, but nor would Lauda or Schumacher. It is telling that all world champions since 1992 – and many before then – came from modest backgrounds: Someone, somewhere backed their formative years, and subsequent entries into F1.
Had Stroll wished to pursue law, there is no doubt his billionaire father Lawrence would have funded the best in legal education; ditto medical school. Lance would, though, still need to deliver at the bar or in theatre; ditto on-track. He drives the car, not daddy. The same applies to Sirotkin’s backers: he drives, not they, but their funding keeps Williams afloat at a time when independents are marginalised and, crucially, pushes the team forward.
5) Personal pay-drivers: Drivers who have no hope of entering F1 save for paying heavily for the privilege. Lavaggi, Ricky von Opel (scion of the car company, who funded Ensign’s entry into F1) and Pedro Diniz (Forti, which moved into F1 off the back of the family grocery fortune) are classic examples of this profile.
By no stretch of the imagination should Stroll, Sirotkin, Ocon, Leclerc, Perez or any current F1 driver be lumped with such ineptitude.
The bottom line is that as long as Liberty chases pay-TV deals and / or pays inequitable bonuses to Big Four teams, the longer pay-drivers provide hope for independent teams. Rather than castigate such teams and drivers, fans should consider why a team such as Williams has not signed Alonso, then thank driver-linked sponsors for sustaining teams that would otherwise join the list of those who went out of business.
Think Lotus, think Cooper, think Brabham, think Tyrrell: all gone despite once being hallowed names. That the current crop of independents survives at all is nothing short of a miracle, and bears testimony to the contributions made by budget-linked drivers.
Budget-linked drivers in 2018
|The ‘big four’|
|Mercedes||Parent company-backed, plus raft of commercial and trade backers|
|Lewis Hamilton||Nil, save for personal sponsors|
|Valtteri Bottas||Nil, save for minor Finnish sponsors|
|Ferrari||Various commercial partners, including Philip Morris corporate|
|Red Bull||Parent company-backed, Aston Martin title partner; various brands, incl TAG-Heuer|
|Daniel Ricciardo||Nil, save for personal (cap) sponsors|
|Max Verstappen||Nil, save for personal (cap) sponsors|
|Fernando Alonso||Had a brace of Spanish driver-linked sponsors, TBA 2018|
|Force India||BWT title partner, deal brokered by Mercedes; various brands incl Diageo|
|Sergio Perez||Various Mexican backers|
|Esteban Ocon||Mercedes support|
|Williams||Martini title partner, Unilever support|
|Lance Stroll||Family-backed, space off-set to various companies such as Bombardier and JCB|
|Sergey Sirotkin||SMP Racing-backed, space to be off-set, Acronis supports Russian drivers|
|Renault||Parent company-backed, various corporate deals, incl BP and Mapfre|
|Carlos Sainz||Linked to team sponsor Estrella|
|Toro Rosso||Parent company-backed, various corporate deals TBA|
|Brendon Hartley||Previously Red Bull-backed|
|Pierre Gasly||Red Bull-backed|
|Haas||Parent company-backed, various trade deals|
|Romain Grosjean||Various personal deals|
|Kevin Magnussen||Various personal deals|
|Marcus Ericsson||Linked to team owner Longbow, Silanna|
|Charles Leclerc||Ferrari support, Richard Mille|
Follow Dieter on Twitter: @RacingLines
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