After months and months of talks Lewis Hamilton has ended any speculation about his future at Mercedes by finally concluding the details and therefore signing a new three year contract with Mercedes F1. The deal is reportedly worth £27m GBP per year.
Hamilton’s basic deal is reputedly worth around £21m without taking into account lucrative race winning bonuses. The additional race bonuses are will bring his total up to that £27m mark.
His total take home pay could be up to £100m if you add up all the sponsorship deals he is bound to amass. Hamilton is currently leading the drivers championship from team mate Nico Rosberg by 20 points.
The F1 circus heads to Monaco this weekend with Hamilton having been resoundingly beaten by Rosberg two weeks ago at the Spanish GP. Hamilton entered the sport in 2008 and very nearly won his first F1 title in his rookie season with McLaren.
So far the 30 year old Englishman has won 36 races, 15 of them with Mercedes a team with whom he won the 2014 world championship. This status gives a driver of Hamilton’s caliber significant negotiation powers. Indeed Hamilton negotiated the terms of the contract independently.
It is believed the financial terms were agreed months ago, the finer details such as sponsorship branding and conflict stretched the conclusion of the deal longer than anticipated.
When the deal was officially announced Hamilton released a statement saying, “I couldn’t be happier to be staying for another three years,” he said of the deal that will take him up to 2018.”
“The Mercedes car I am driving right now is the best I have ever had in my career. It’s just so much fun to be out there every weekend, on the limit and fighting to win at every track.” said Hamilton.
The question is, why is Hamilton and drivers such as Alonso and Vettel worth so much to a team. Hamilton’s ability to win is the key, being one of the best drivers on the grid is another and the marketing value of this for Mercedes actually dwarfs his salary by hundreds of millions of pounds.
So in the end the market always pays the going rate, however £27m per year is just a drop in the ocean for a company like Mercedes considering the return they will make from Hamilton’s very marketable brand image.