How F1's team cost cap triggered a football-style driver transfer market

Daniel Ricciardo is now a free agent after agreeing a mutual termination of his McLaren contract. Alpine is in for Pierre Gasly, and due to table a bid to bring him to the Enstone outfit. Oscar Piastri did not have an Alpine contract in place for 2023 and moves to McLaren on a free transfer.

Formula 1’s 2023 silly season has a tonal similarity to a transfer window in football. Replace any of the nouns in the above three sentences and replace them with the names of clubs and players, and you’ll have something resembling the transfer gossip column in all good newspapers and ballsports-fancying media outlets around the world.

It’s a daily occurrence that football players are linked to moves away from their current team, with estimated costs skyrocketing as the inflation of transfer fees continues unabated in the top divisions. The point is that, in the net-bothering world of football, it’s normal.

In the world of F1, however, it really isn’t normal. When a driver is under contract, that’s usually enough of a hands-off warning to a rival team. It’s also usually an obligation for a team to keep the driver onboard, even if performances are waning. Even though contracts in sport are often accompanied by the cliché of “not worth the paper it’s written on”, F1 teams and drivers do their level best to keep up the perception that they have value in the world of motor racing.

That’s not to say that drivers haven’t been bought out of contracts before. Nico Hulkenberg was bought out of a Force India deal by Renault to lead the team in 2017. In the same year, Mercedes stumped up the cash to spring Valtteri Bottas from Williams after Nico Rosberg called it quits.

But when it comes to paying up contracts, either at home or elsewhere, F1 teams are rarely so profligate. They prefer to go after free agents, which is more akin to the transfer habits of a lower-league football club than the equivalent high-rollers in the Premier League.

So why has McLaren suddenly accrued the transfer habits of Nottingham Forest, which bought no fewer than 21 players in its bid to retain Premier League status in the recently closed summer transfer window? Why is Alpine willing to fork out what will likely be a not insignificant sum – if the move comes to pass – to acquire the services of a driver when other options exist for free?

One of the last high-profile contract buyouts occurred when Mercedes paid Williams for Bottas after Rosberg's shock retirement in 2016

Photo by: Mercedes AMG

Perhaps the budget cap, funnily enough, has now created an environment conducive to spending more on drivers. There’s some roundabout logic to this, but if you’ll bear with us, it makes sense.

The top F1 teams have always been big-budget entities. Those regularly racing for wins have frequently spent well in excess of $200 million per season pre-cap, with the likes of Mercedes and Ferrari likely pushing beyond the $300m mark in their yearly budgets. Now that all technical matters and part of the operational side of each team have now been condensed to within that cap, which nominally stands at $135m in 2022 (plus add-ons for inflation), there are cases where teams are becoming profitable.

Red Bull signed bumper deals for 2022 and beyond with tech giant Oracle and crypto traders Bybit that went a long way to covering its running costs for the season. Add that to the money that Red Bull itself puts in, along with its collection of other sponsors, and one can assume that the team is somewhat flush with cash.

If driver transfer fees in F1 become as ubiquitous as they do in the Premier League, then that might also have a knock-on effect in how the teams further down the grid pick drivers

Not everything falls within the cost cap. Marketing and promotional activities do not fall within that remit, and thus Red Bull (or any other F1 team) can send a car up a mountain to drive in the snow as much as they like. The top three earners in the team are also not covered and, separately, driver contracts and termination fees are not subject to the cap either.

The notion of having ‘spare’ cash in F1 has never previously figured. As one paddock insider apparently opined many years ago: ‘If you have $150m to spend on running a race team, then a race team will cost $150m to run’. Every single dollar that came in from sponsorship or investment pre-cap went into developing a car or infrastructure, with the idea of having no money left to spend at the end of the season.

Now, the dynamic has changed; teams are turning profits, or have sponsorship deals that collectively bring in more money than it needs to run a racing team, pay driver salaries and entice further sponsors through brand activation events.

It’s likely that the majority of drivers on multi-year deals have some kind of buyout clause, but these are rarely triggered. However, if a team has an underperforming driver in one car and a spare $20m ‘war chest’ to go shopping with, why wouldn’t they spend it on dispensing with their current incumbent and bring someone new in? That seems to be how McLaren has elected to play its hand for next season, although the outlay for Piastri will only be his yearly retainer given the CRB hearing went in McLaren’s favour.

The F1 team cost cap could have been key in giving McLaren more cash to spend on its drivers, splashing out on getting Piastri in and paying off Ricciardo

Photo by: Carl Bingham / Motorsport Images

The narrative would then change. The idea of an F1 team buying a driver out of their contract is currently rare, but this is what football teams do every summer and every January. On the flip side, footballers get released every season as well; the uproar that McLaren ‘treated Daniel Ricciardo poorly’ by handing him a lot of money to clear off rarely exists in ‘the beautiful game’. Football players often have contracts paid off to give them half a chance of finding a new club, and supporters rarely bat an eyelid in that instance.

Formula 1 is a different beast to football, in that there are only two drivers per team and 20 seats available on the grid. Drivers very rarely get benched too, unless they’ve committed a sin so cardinal that it’s fully justifiable. But both are united by their dependence on results.

If a footballer has failed to perform, they’ll get dropped and read the riot act by the manager. If an F1 driver fails to perform, they have ample opportunities to turn that around and change the narrative. But if there’s a failure to reclaim their form, then the net result is the same at the end of the year.

Having reserves of cash gives the teams a chance to fix that problem and potentially keep the drivers on their toes. It’s likely to be a luxury restricted to the bigger teams, as some of the teams further down the grid don’t even run their entire operations to the budget cap, but it could provide those fighting for titles with extra opportunities for business.

The real-world Ricciardo example has been done to death, so let’s deal in the hypothetical; let’s say Red Bull is fighting for the constructors’ title in 2023, but Sergio Perez is struggling to deliver the goods and losing the team points relative to, say, Ferrari and Mercedes. Unlike 2019, AlphaTauri’s drivers aren’t an option, but there’s another driver on the grid performing and Helmut Marko likes the cut of their jib. Would Red Bull pay Perez up and pay for the in-form driver to come in? Maybe.

Ferrari did just that in 2009 to pick up Giancarlo Fisichella as its latest substitute for the injured Felipe Massa, after the Force India man had pushed Kimi Raikkonen all the way to finishing a valiant runner-up at Spa. But the idea is that, with a transfer budget made possible by the new rules, it could.

If driver transfer fees in F1 become as ubiquitous as they do in the Premier League, then that might also have a knock-on effect in how the teams further down the grid pick drivers. Although pay-drivers aren’t quite as much of a necessity as they were, they might become obsolete in favour of young drivers with sell-on value.

F1 teams like Red Bull could splash the cash on drivers akin to Premier League football teams. Christian Horner is pictured with Manchester City playmaker Kevin de Bruyne at Spa

Photo by: Erik Junius

Once again turning to a footballing example, many teams across the world now employ a data-driven approach to selecting players. That’s not only to determine whether their attributes would mesh with a given playing style but, among teams like Brighton and Brentford, are picked up for a snip and later command huge transfer fees. Aston Villa forward Ollie Watkins was bought by Brentford back in 2017 for around £1.8m, then sold on to the claret-fancying Birmingham club for nearly £30m three years on.

If capital outside of budget caps can accommodate teams splashing out on in-form talent rather than persisting with a weakening force behind the wheel, maybe we’ll get “Mercedes bids $100m for Max Verstappen” stories in the future

It might suit the small teams to get drivers in on longer-term deals with a healthy buyout clause if they back that driver enough. It’s difficult these days with driver academies hoovering up the promising driver real-estate, but sleeper hits still exist in the motorsport sphere. That might bring those small teams closer to the cap and help them become more competitive.

We might be too far in the future to see “Mick Schumacher linked to $30m transfer to McLaren” on the F1 equivalent of ClubCall, but if capital outside of budget caps can accommodate teams splashing out on in-form talent rather than persisting with a weakening force behind the wheel, maybe we’ll get “Mercedes bids $100m for Max Verstappen” stories in the future. And in those years where the silly season rumour mill looks stagnant, the possibility of football-style transfers could, at the very least, keep us in column inches.

What impact will the cost cap have on future F1 driver silly seasons?

Photo by: Glenn Dunbar / Motorsport Images