Winning in Formula One brings much more than just prestige. It also brings huge financial rewards. Just look at how Michael Schumacher, the sport’s best driver for the past few years, is now one of the highest paid sportsmen in the world. Estimates of his earnings put his yearly wage packet at $30 million. That means, by the time he has read this sentence he has earned another $6! And again. And again.
Racing drivers don’t just get paid a set fee for the year, however. There are many ways that they can earn money during their career. Here are the different ways that make up the final amount a driver earns.
- Wage: A driver’s wages are detailed in his contract with the team. The amount is usually a flat fee and includes details like the number of test sessions the driver must take part in, as well as any appearances he must make for sponsors.
- Win bonus: Some drivers’ wage packet stays the same no matter how well they drive; others are given a bonus depending on results. This bonus is often points related, meaning drivers could earn an extra $150,000 per race win.
- Championship bonus: Winning the championship is the aim of every driver and, because of its financial benefits, some drivers are given an extra bonus if they win the world title.
- Merchandise: When a driver becomes successful, race fans often want to wear T-shirts or hats that portray him. Drivers often license clothing manufacturers to produce goods for them in return for a small percentage of profits. Some can earn several million dollars from merchandise rights.
- Endorsements: Companies love having their products endorsed by a world famous name, and racing drivers can fit perfectly into this category. Formula One drivers can earn several thousands of dollars by giving their names to anything from petrol to shampoo.
- Personal sponsorship: Some teams allow their drivers to have their own sponsors who don’t deal with the team at all. In exchange for a badge on their overalls or helmets, drivers can earn hundreds of thousands of dollars of extra income.
Unlike other forms of racing series, however, especially those in the United States, Formula One teams and drivers are very secretive about what they earn. All the details are locked up in the top secret Concorde Agreement, a covenant signed by all the teams that details how much each team earns from the sale of television rights and other endorsements, like computer games. No one outside the teams knows the exact details of how the payment is split up, but it is widely accepted that teams split between them 47 per cent of television money – believed to be around $300 million in total.
