Formula 1: How huge is the Lewis Hamilton contract ‘gap’?

Lewis Hamilton, Mercedes, Formula 1 (Photo by HAMAD I MOHAMMED/POOL/AFP via Getty Images)
Lewis Hamilton, Mercedes, Formula 1 (Photo by HAMAD I MOHAMMED/POOL/AFP via Getty Images) /

There is reportedly a gap between what Lewis Hamilton wants and what Mercedes are willing to give him in a new Formula 1 contract. But how big is that gap?

We are now just two months away from the scheduled start date of the 2021 Formula 1 season, and seven-time/four-time reigning world champion Lewis Hamilton is still without a deal to compete.

His Mercedes seat is the only one of the 20 seats on the grid for the upcoming season without a confirmed driver, and this has been the case for nearly two months.

More importantly, we are now just one month away from what has been reported as the deadline for the 36-year-old Briton and the Silver Arrows to get a deal done for the upcoming 2021 season.

While some have claimed that the whole thing is just a major publicity stunt and that Hamilton is already slated to return, others claim that the two sides are still quite far apart in terms of finding common ground before a deal is signed.

Officially, nothing is signed, and the reports suggest that Hamilton is looking for far more than Mercedes are willing to offer him. Even though Ineos, which recently became a one-third shareholder of the team along with Daimler and team principal Toto Wolff, were tipped to cover what Mercedes wouldn’t, there still hasn’t been a contract announced.

But just how much more is he seeking from the team than they are willing to give?

Recent reports suggest that Hamilton asked for a four-year, $200 million deal which would also include 10% of the team’s championship winnings, a limited production AMG One car and an additional role that “goes beyond being a driver and more than a mere testimonial”.

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That is nothing like what Mercedes evidently want to offer him.

According to RaceFans, Ola Källenius, the chairman of the board of management of Daimler AG and head of Mercedes-Benz, is unwilling to provide more than $20 million per year. With all things factored in, most notably Hamilton’s reported asking price for a base salary, that comes out to around a 300% difference. While this exact figure was later disputed by a spokesperson, the gap is still significant enough that neither side would simply be willing to accept what the other is offering without intense negotiations.

We also can’t forget how George Russell performed as Hamilton’s replacement in the Sakhir Grand Prix at Bahrain International Circuit after Hamilton tested positive for COVID-19.

Even in a cockpit that was far too small for him, he looking like an instant championship contender, dominating the race before circumstances out of his control robbed him of an impressive victory — twice.

That performance is believed to have capped Hamilton’s value, and justifiably so, despite the fact that it is impossible to say with absolute certainty that Russell is just as good as or better than the seven-time world champion after just one start in the championship-winning W11.

Another thing to consider is the effect of the pandemic on Mercedes on the corporate side of things. They are preparing to lay off roughly 10,000 employees worldwide in response to what is expected to be a 20% sales reduction, and this comes as they are racking up research and development bill in preparation for electrification.

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So assuming that this all isn’t just for show and Hamilton is literally, as we speak, not a member of Mercedes, it’s safe to say that there needs to be some major giving and taking on both sides before a deal is solidified.