Formula One: What Lewis Hamilton's two-year contract extension means for Mercedes, Liberty Media and the sport

Formula 1’s owners, Liberty Media, would have heaved a sigh of relief upon reading the news of Lewis Hamilton’s two-year contract extension with Mercedes. This extension means that Formula 1’s superstar driver and reigning world champion would be around in the paddock for at least the next two years, till the end of the 2020 season.

In Formula 1’s drive to attract newer and younger audiences, Hamilton’s rockstar image, legion of fans and social media obsession are important ingredients. Not to mention his world-class and almost unmatchable natural talent. If Liberty Media are targeting 21 Super Bowl-esque Grands Prix across the season, Hamilton is definitely their best box office bet as they look to increase the sport’s entertainment and social quotient.

Mercedes' British driver Lewis Hamilton. AFP

Mercedes' British driver Lewis Hamilton. AFP

First things first, Hamilton’s extension was never under question — it was always a case of ‘when’ rather than ‘if’. Mercedes and Hamilton took their time to discuss the final terms, sign-off and make an announcement; and why not? After all, this partnership has proved to be a record-breaking and multiple championship winning one; and since no other parties (read: teams) were involved, they could take their own time and they did.

2021 — Formula 1’s Year of Rebirth?

Formula 1’s future after the 2020 season is currently being discussed by the sport’s key stakeholders — the teams, FIA and FOM (Liberty Media). There are expectations that right from the design and look of the cars to the technical regulations and even the commercials (expenses and earnings) will undergo a complete overhaul. Such an overhaul has made the big teams cautious and it is only natural that if Mercedes aren't sure of their future in Formula 1 after 2021, Hamilton’s new contract extension reflects a corresponding end date.

Hamilton, who will be 35 years old in 2020, could seek a further extension or decide to hang his helmet; in which case, this could be the last of his contracts as a racing driver in Formula 1. But of course, there could also be a possibility that Hamilton could do a Nico Rosberg; win a title and announce a shock retirement before 2020.

Michael Schumacher’s Seven Titles In Focus

Hamilton’s extension announcement comes at a time when Mercedes are no longer the clear favourites during every Grand Prix weekend. Ferrari’s renewed competitiveness and rare calmness while fighting at the front has delivered an intense battle this season for both the championships. This also means that the relative ease with which Hamilton-Mercedes won races and challenged for championships may no longer last till 2020.

However, there is little doubt that the Hamilton-Mercedes partnership would be aiming to outscore the Schumacher-Ferrari partnership that won five titles on the trot in the 2000s. One would expect Mercedes to be competitive till 2020, which means that in at least theory, Hamilton could lead them to eight Drivers’ Championship titles and surpass Schumacher’s seven.

Hamilton — Formula 1’s Highest Paid Driver

The contract extension will reportedly earn Hamilton a whopping $52 million dollars per season, averaging to roughly $2.6 million per race. But of course, this number isn’t entirely accurate given that the annual figure includes performance and championship bonuses. However, Hamilton only further consolidates his position as the sport’s highest earning driver. For Mercedes, Hamilton’s personality of a social media celebrity is an added advantage; for Ferrari, no such benefit exists given Sebastian Vettel’s non-usage of social media.

The 2019 Driver Silly Season

Strangely enough, Hamilton’s extension with Mercedes was not the key piece of this season’s driver silly season puzzle. A few races ago, Niki Lauda verbally confirmed an extension for Valtteri Bottas, one that will leave Daniel Ricciardo with no option but to sign with Red Bull Racing and pray that Honda don’t scuttle his title hopes in 2019. The biggest piece of the puzzle would still be Ferrari’s decision to renew Kimi Raikkonen’s services or not. If they do so, Charles Leclerc could most definitely be in a Haas car next season, if not, the paddock will be overjoyed to see the Monegasque driver in scarlet red overalls much earlier than everyone’s expectations.

The other crucial piece of the puzzle would be Fernando Alonso’s extension with McLaren. It is clear that the Spaniard’s focus for 2019 would be winning the Indianapolis 500 (in May 2019) and clinch Motorsport’s ‘Triple Crown’ and he would be focused on doing so with our without McLaren’s entry (or support). However, given McLaren’s lack of form in the last few seasons, there’s a slim chance that a big name, like Ricciardo, would sign with them, though the past-his-prime Raikkonen might be in contention. All in all, the driver silly season for 2019 will add to the on-track excitement that this season has offered.


Updated Date: Jul 20, 2018 11:00 AM

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