PRO
Essential guideto the business of F1STRAIGHT
TALK
An important season lies aheadand one
which should keep thelawyers happy, as the
Formula 1 grid dealswith a tidal wave of driver
negotiations thanks to so many contracts coming
up for renewal.
Charles Leclerc andMax Verstappen announcedeither side of the Christmas holidays that they are
to remain with theirteams untilthe end ofthe
2024 and 2023 seasons respectively – basically
foreverin F1 terms. Mark McCormack, founder
of sports management giant IMG, once said if
someonegave hima five-year plan he’d “toss out
pages detailing yearsthree, four andfive as pure
fantasy. Anyone whothinks [they]can evaluate
business conditionsfive years from now,flunks.”
Nevertheless it’s done, and the post-2020 jigsaw
is forming before our eyes.
We know whereFerrari and Red Bull stand.2020 IS PEAK
TIME FOR THE
LEGAL EAGLES
We know, too,that both teams needto findcompetitive driversfor
the otherhalf of the garage and accept assorted sacrificial mixed-tyre
strategies and ‘your teammate is faster than you’ messages.
With Lewis Hamilton likely to renew at Mercedes on a two-year
commitment with an option for a third, the dominant silverbacks
of the F1 jungle are pretty well set. The rest– a side from drivers
such as Esteban Ocon and George Russell – have to negotiate
contracts over what remains.
Recalling the first time I was askedto review a Formula 1drive r’s
contract, my task was to look over the ‘marketing services’ including
personal appearances for sponsors, PR activities and visits to
hospitality suites. Another term for this could be ‘things thedrivers
don’t really want to do’, so I gave these joyless commitments the
once-over and turned to the page that interested me most; payment.
When you see that someone is going tobe paid £500,000 by direct
debit on the 15th of each month in return for racing a Formula 1 car
it makes you sit back and reflect. This is agreat deal of moolah and,
while the risks are high, they aren’t as high as they used to be.
The team’s contractual obligations are
usually summarised up front, including the
requirement to turn up at each grand prix
and provide a car that meets the rules and
regulations defined by the FIA.
It’s tricky for either side to contract to
be ‘competitive’. That is difficult to define,
varies from team to team and, anyway, the
driver doesn’t design the car.
This is where legal terms such as ‘best
endeavours’ or ‘reasonable endeavours’
can arise, the former meaning that a party
has to do everything possible to achieve
the desired results, the latter that you
have to try a bit.
Ferrari’s drivers have to sign upto a
strict code of conduct, including as regards
their use of social media, which may be
one reason why Sebastian Vettel avoids it.
Saying or doing something that may bring
the team into disrepute is not something to
be encouraged and such contract clauses can
have unforeseen consequences.
Not too many years ago a team principal
made the unfortunate mistake of signing
three drivers for a grand prix, only to be
accidentally copied on an email from one
of his driver’s managers describing him in
unflattering four-letter terms.
Since the email had been circulated toa
number of people, the disrepute clausewas
deployed and the driver duly dropped from
the next race. The team principal’s three-
into-two dilemma was resolved.
Funny world, contracts.Deres et a nimi, nestempe eumexcerovit,
sequis mi, quatur, omnita duciet estrum ilis
enditae remporerum ea quam esPICTURE:GLENN DUNBAR.ILLUSTRATION:BENJAMINWACHENJEMARK
GALLAGHER
@_markgallagherLewis is the only one of these three not
signed up longterm, but he won’t bethe
only driver putting pento paper in 2020GRGP RACING MARCH 2020 31
PICTURES
PRO
Essential guideto the business of F1
STRAIGHT
TALK
An important season lies aheadand one
which should keep thelawyers happy, as the
Formula 1 grid dealswith a tidal wave of driver
negotiations thanks to so many contracts coming
up for renewal.
Charles Leclerc andMax Verstappen announced
either side of the Christmas holidays that they are
to remain with theirteams untilthe end ofthe
2024 and 2023 seasons respectively – basically
foreverin F1 terms. Mark McCormack, founder
of sports management giant IMG, once said if
someonegave hima five-year plan he’d “toss out
pages detailing yearsthree, four andfive as pure
fantasy. Anyone whothinks [they]can evaluate
business conditionsfive years from now,flunks.”
Nevertheless it’s done, and the post-2020 jigsaw
is forming before our eyes.
We know whereFerrari and Red Bull stand.2020 IS PEAK
TIME FOR THE
LEGAL EAGLES
We know, too,that both teams needto findcompetitive driversfor
the otherhalf of the garage and accept assorted sacrificial mixed-tyre
strategies and ‘your teammate is faster than you’ messages.
With Lewis Hamilton likely to renew at Mercedes on a two-year
commitment with an option for a third, the dominant silverbacks
of the F1 jungle are pretty well set. The rest– a side from drivers
such as Esteban Ocon and George Russell – have to negotiate
contracts over what remains.
Recalling the first time I was askedto review a Formula 1drive r’s
contract, my task was to look over the ‘marketing services’ including
personal appearances for sponsors, PR activities and visits to
hospitality suites. Another term for this could be ‘things thedrivers
don’t really want to do’, so I gave these joyless commitments the
once-over and turned to the page that interested me most; payment.
When you see that someone is going tobe paid £500,000 by direct
debit on the 15th of each month in return for racing a Formula 1 car
it makes you sit back and reflect. This is agreat deal of moolah and,
while the risks are high, they aren’t as high as they used to be.
The team’s contractual obligations are
usually summarised up front, including the
requirement to turn up at each grand prix
and provide a car that meets the rules and
regulations defined by the FIA.
It’s tricky for either side to contract to
be ‘competitive’. That is difficult to define,
varies from team to team and, anyway, the
driver doesn’t design the car.
This is where legal terms such as ‘best
endeavours’ or ‘reasonable endeavours’
can arise, the former meaning that a party
has to do everything possible to achieve
the desired results, the latter that you
have to try a bit.
Ferrari’s drivers have to sign upto a
strict code of conduct, including as regards
their use of social media, which may be
one reason why Sebastian Vettel avoids it.
Saying or doing something that may bring
the team into disrepute is not something to
be encouraged and such contract clauses can
have unforeseen consequences.
Not too many years ago a team principal
made the unfortunate mistake of signing
three drivers for a grand prix, only to be
accidentally copied on an email from one
of his driver’s managers describing him in
unflattering four-letter terms.
Since the email had been circulated toa
number of people, the disrepute clausewas
deployed and the driver duly dropped from
the next race. The team principal’s three-
into-two dilemma was resolved.
Funny world, contracts. PICTURE:GLENN DUNBAR.ILLUSTRATION:BENJAMINWACHENJEMARK
GALLAGHER
@_markgallagherLewis is the only one of these three not
signed up longterm, but he won’t bethe
only driver putting pento paper in 2020