The Real Deal

Six pages. That’s all McLaren took to sign Gilles Villeneuve in 1977. As Martin Whitmarsh reveals, there’s more to F1 driver contracts today

“The past is a foreign country,’ observed L P Hartley in The Go-Between; ‘they do things differently there.’ Stirling Moss and Rob Walker did it with a handshake, and so did Jackie Stewart and Ken Tyrrell. Today it’s not like that.

While in Montréal in June, I acquired a copy of Gilles Villeneuve’s irst Formula 1 contract, signed with McLaren 35 years ago, and I thought it might be instructive to contrast it with a contemporary McLaren contract. “I wouldn’t want you to take this away with you,” said Martin Whitmarsh at the company’s HQ, “but I’m happy for you to see it, and to talk it through with you…”

Had it been ‘redacted’? “Not really,” said Whitmarsh. “It’s a standard McLaren F1 driver contract – but you might notice the empty spaces in the ‘payment’ section…” No surprise there. Grand Prix drivers earn a lot of money – it’s not by chance that virtually all of them live in Monaco, although perhaps only Gerhard Berger was ever honest about why. “There are three reasons,” he told me once, “T, A and X…” “Yes,” Martin laughed. “I can’t think of anywhere I’d like to live less than Monaco, but… I’ve got to be honest, I live four miles from here, and if someone said, ‘If you move four miles the other way, it’ll halve your tax bill, I’d probably be over there like a shot! So I don’t want to be too hypocritical…”

Financial detail apart, everything else about the contract seemed intact, and I was surprised by its relative brevity – about 50 pages. I’d been expecting a brick.

“Well, perhaps some are like that,” said Whitmarsh, “but, in our case Tim Murnane, the Group Legal Director, is a ‘get it done, keep it simple’ sort of guy. We tend to do everything like this in-house – you expected the contract to be the size of a brick, and the big law firms tend to be paid by the inch, don’t they? Tim just gets on with it. If you were a driver’s manager, and you arrived at five o’clock, by eight we could have a contract done.

“What we say to the legal department is, ‘Just print out the standard contract’, so the starting point is, ‘Here’s our contract: we think it’s inherently fair in structure’. For 90 per cent of drivers I wouldn’t change it – they might ask, but it would be a matter of, ‘Listen, guys, if you want to sign, this is the contract, and the offer’s open for the next two days…’ As they – or their management – become more prima donna-ish, of course, it becomes trickier.

“This is our base contract, but depending on who the driver is – and what negotiating power he has – there will be variances, which might run to another 10 pages if it were a difficult person. To put it another way, if I were signing Heikki Kovalainen it would be 50 pages; if it were Jenson Button it would be 52, if it were Nigel Mansell it would be 57, if it were Lewis Hamilton it would be about 60…

“The first thing you’ll notice is that we don’t contract with the driver himself – we contract with ‘Driveco’, or ‘Driver Company’. The standard contract is split into three: a driver’s agreement, a promotions agreement, and a third linking agreement. Most teams’ contracts are done this way: if I’m paying you, say, $10m, it’s five as a driver and five as a promotion animal – and the linking agreement is saying if I fire you on one contract, you also get fired on the other…”

Down the years McLaren has earned a reputation for fairness, in terms of both equality of equipment and being allowed to race your teammate, and in fact this is enshrined in the contract. “‘During preparations for each World Championship’,” Martin read aloud, “‘team will act in a manner, so far as reasonably possible, so as to provide both drivers an equal opportunity to win the drivers’ World Championship…’ I’m pretty sure Red Bull and Ferrari don’t have this clause, by the way – and maybe not Mercedes, either…

“Going on from there, ‘From the first race of the World Championship, team will in each race take all decisions and actions in connection with the World Championship to achieve, so far as is reasonably possible, an equal treatment of each driver, in taking into account the different situations that arise in the course of such race’.

“That is the basic tenet of McLaren – before you start, you can be 100 per cent equal, but being frank, at some point… Take what happened at Silverstone: when Lewis came out on his third set of tyres, he was behind Jenson. In fact, Jenson himself was about to stop, and I said to his strategy people, ‘It would be good if he could stop now…’ I could have said, ‘Stop him now’, but one of the reasons I didn’t – and it was a mistake, because it cost both of them time – was that I was conscious of ‘the first time Lewis is up behind him, Jenson gets an instruction to come in straight away…’ In endeavouring to keep everything equal, I hurt both of them. It can be a dilemma, but we do genuinely try to keep everything equal.

“The contract then goes on to say that occasionally there will be instant decisions that have to be taken, and times when you have to favour one over the other. ‘As and when decisions are required, where the drivers cannot be treated equally, account will be given to the preferences that have been previously nominated.’ Basically, what that means is if I favour one driver on one occasion, then the next time I’ve got to take account of that, and balance it out. In our contracts there’s quite a lot of effort to spell these things out.”

It seems unlikely that such clauses were in, say, Rubens Barrichello’s Ferrari contract when he partnered Michael Schumacher… “No,” Martin agreed. “You might be right! Anyway, that’s the ‘equality’ part, which also requires the drivers to attend tests and – periodically – the premises for technical meetings.

“Now we come to the part dealing with ‘first call on a driver’s services’ – and this is a clause that might not have been in Robert Kubica’s contract: ‘Driver will not participate in any other motor racing or testing activity, of any kind whatsoever anywhere in the world, during the term of this agreement, without the express written permission of the CEO of the McLaren Group of Companies’.” Interesting – and surprising – to me was that the contract did not preclude ‘dangerous sports’, as such. One thinks of Patrick Depailler, who missed most of the 1979 season after shattering his legs in a hang-gliding accident.

“No,” said Whitmarsh, “that doesn’t come into the contract – although most people assume it does. I’ve been involved with these contracts for about 20 years, and to some degree you’ve got to treat the drivers as adults – even if they don’t always behave that way! We’ve had a lot of adolescents…”

Early in 2006 Juan Pablo Montoya missed a couple of Grands Prix after injuring his shoulder. The widespread belief was that JPM had parted company with a motorbike, then claimed it was a tennis injury so as not to be in breach of his contract, but Whitmarsh said it had nothing to do with McLaren.

“No, not at all. If you hurt yourself doing something else, and you ain’t it to drive, you don’t get paid – in fact the contract stipulates you should therefore insure yourself. I don’t know what Juan Pablo was doing when he hurt himself – and I never actually asked him – and nor do I know what was in his insurance policy, but I suspect it might have had a ‘no dangerous sports’ clause, and, that being so, we don’t need to have one ourselves.

“When it comes to driving something else, once in a while a request comes in: ‘Can I do a karting event?’ or whatever. That’s one thing, but… ‘Can I do a rally?’ I don’t suppose – now – we’d agree to that.”

Next, payment, always made in US$. In recent years fines, for such as pit lane speeding, have been exacted in euros, but Whitmarsh said that fundamentally the currency of F1 is still dollars. “Bernie’s world is still in dollars – most of his income, from circuit contracts and signage, comes in that way, and wisely he therefore pays our prize money in dollars, too, so he’s not exposed to currency fluctuations.

“Prize money, incidentally, belongs to us. In times gone by, until about 1981, it was paid to drivers, and by the event. And the only prize money we receive is from the central prize fund.

“Next comes, ‘Agreement to attend events’, and this basically says that, unless you’re dead, you’ve got to turn up and do your job – and, for the avoidance of doubt, you’ve got to be there on the Thursday…” I remembered Imola in 1993, when Ayrton Senna, then at financial loggerheads with Ron Dennis, did not arrive at the circuit until around nine o’clock on Friday morning, having lately flown in from Brazil. Martin said yes, he remembered that, too. Senna was indeed a special case – and not only in that respect. On the question of logos on the drivers’ overalls, for example, McLaren policy had long been ultra-strict, Ron Dennis adamant these should be confined to team sponsors: it was a pill sweetened by paying the drivers extra for accepting it.

Then Ayrton arrived – and when he showed up for Rio testing his new McLaren overalls, in addition to all the team sponsors’ identification, carried a huge logo from Nacional, the Brazilian bank which had long supported him. Dennis said this was not acceptable; Senna said he wasn’t sure it had to be. Throughout his six years with McLaren, ‘Nacional’ remained.

“Yep,” Whitmarsh acknowledged, “that was the only exception to the rule in the last 30 years. In fact the reason for it isn’t that McLaren – or any other team – wants to deny the poor old driver the chance to make a few more bob; it’s that inevitably you’ll end up with conflicts.

“Now, the next clause is important: ‘The driver will not disparage or bring into disrepute himself, the team or products of any party with whom the team has an agreement’. Incidentally, there’s also one, which comes under that: if you have any narcotic substance, you are deemed to have brought the team into disrepute…”

I thought of times long past, and wondered if that clause had always been included. Martin said he doubted it – and added that another one, too, probably wouldn’t have been evident:

‘In the reasonable opinion of the team, or a sponsor, anyone who is socially irresponsible, in respect of alcoholic beverages…’

“The next thing,” Whitmarsh went on, “is quite dramatic. As I said, our drivers are required to insure themselves, and this clause deals with release, indemnity and insurance: ‘Driver has voluntarily entered into this agreement, and he assumes all risk of loss, damage or injury, including death, that may be sustained by him’. All contracts contain things
like this nowadays – but, contrary to what some people believe, you can’t abdicate your responsibility for duty of care, so merely writing that does not give the team impunity if it’s negligent in any way, shape or form.”

That became apparent long ago, following the death of Mark Donohue at the 1975 Austrian GP. There was little doubt Donohue’s accident was brought about by tyre failure, although it was impossible to establish its cause. To that point it had always been implicit that ‘these things can happen, and the driver knows that’, but Donohue’s wife took legal action, and in so doing nearly drove Goodyear out of racing. “Hmm. Well, this contract requires the driver to execute an indemnity of – in our case – ‘Vodafone, team and tyre supplier’.

Skimming through it… ‘I acknowledge that I am fully aware of the risks and hazards resulting from participation in the activities contemplated by the driver agreement and team agreement… I voluntarily accept such risks… I undertake to release, indemnify, hold harmless you and your affiliates, oficers, employees, contractors, agents…’

“For Vodafone, the chance of their being negligent is minimal. But for a tyre company such as Pirelli it’s different, and in every F1 contract there’s a clause inserted by them: ‘The tyre supplier makes no warranty, express or implied, as to the quality of workmanship of its tyres for racing and testing purposes, and the tyre supplier expressly disclaims all warranties as to the fitness of the tyres for use on the team’s cars for racing and testing’. Fundamentally they’re saying, ‘If you want our tyres, you’ve got to get your drivers to sign this’. But the fact remains that if you are actually negligent what you cannot do is to absolve yourself of responsibility. Corporate manslaughter, and all that stuff. If you’re a director of a company like this, you’re in it, whether you like it or not.

“So… ‘Driveco shall take out such policies, including life assurance, as it shall see it’. This is us making clear to the drivers that they’re responsible for their own insurance.” Some years ago, I said, an insurance executive with many F1 drivers on his books told me the top ones no longer bothered with life assurance. The premiums were prohibitive, he pointed out, and these people were all as rich as Croesus anyway, so… why bother?

“Well, it’s up to them,” Martin mused. “OK, what’s next? ‘The driver will use his best endeavours to ensure he will not be adjudged to have broken the regulations. Driveco shall indemnify team against any ine imposed by the FIA.’ We generally pay, actually, but in an extreme case we could say, ‘If it’s your fault, you should pay…’ Drivers tend not to like that bit – and when you say, ‘OK, we’ll pay’, they’re not good at showing gratitude, either…

“Next, ‘The driver will participate in a physical training programme…’ They have a contractual obligation to do this. At the moment we’ve got two who are OK on that, but someone like Juan Pablo… it was in his contract, but he didn’t want to do it, and Kimi was a bit up and down, too…

“There is also a Promotions Agreement – a contract with ‘Driveco to acquire the right throughout the world to exploit the name, fame, reputation and likeness of the driver’. Then you get into Publicity Rights, and here we’re acquiring rights on behalf of others, so… ‘May permit the FIA or any successor body hereto’ – that’s interesting, isn’t it? – ‘and Formula One Administration or any successor’ – also interesting – ‘to publish and use the driver’s name, nickname, initials, autograph, helmet artwork design, voice, image, photograph, biographical and descriptive material, blah, blah, blah…’”

Not much is left to chance. So now, turning the clock back, what of the contract signed on February 21 1977, between McLaren’s Teddy Mayer and Entreprises Gilles Villeneuve Inc.?

“Well, it’s not very long,” said Whitmarsh. Six pages – and good old foolscap…” In all the time I knew Gilles, I don’t ever remember mention of ‘Entreprises Gilles Villeneuve Inc’.

“Well, as I mentioned earlier,” said Martin, “the current contracts are signed by ‘Driveco’ – they’re not signed by the drivers. At one time there would just have been the driver’s name at the bottom, and Gilles has in fact signed this – but underneath ‘Entreprises Gilles Villeneuve Inc’. This was the start of people positioning themselves as companies.”

It will be remembered that the McLaren team leader, James Hunt, competed in a Formula Atlantic race at Trois-Rivières in 1976, and, soundly beaten by this local boy, recommended – with an altruism not always found in racing drivers – that Mayer should sign Villeneuve without delay. Gilles was ready to sign on virtually any terms. “It’s interesting,” said Whitmarsh, “that ‘the driver agrees not to compete in any car other than a McLaren’…”

This indeed seemed extraordinary, given that Mayer was uncertain as to how many races Gilles would have in a third McLaren alongside Hunt and Jochen Mass. As it turned out, he competed in a full season of FAtlantic and Can-Am, and raced a McLaren only at Silverstone.

“He’ll have got permission from Teddy to do the other things,” said Martin. “If McLaren only ran him once, it wouldn’t have been fair to stop him racing anything else.

“Now, the money – $1000 for each race he drives! Plus 30 per cent of the car’s prize money. But then it goes on, ‘Should the driver earn less than $15,000, McLaren will pay him the difference…’”

In the end Gilles was very pleased with that. “On a fee-per-race basis,” he told me in the spring of 1978, “I must have been one of the highest-paid drivers last year!”

“Ah, expenses – now that is different,” said Martin. “We don’t pay expenses now – but then we’re not paying the drivers $1000 a race! ‘McLaren will reimburse Driver for all reasonable travel, hotel and rental car expenses incurred by him in the course of his competing in any 1977 Racing Event for McLaren from the day preceding practice until the day after the Racing Event. Reasonable travel expense is hereby deined as meaning economy class air fares if air travel is involved…’”

Well, it was only to and from Montréal. The ‘Publicity’ portion of the contract was restricted to two lines, but Whitmarsh noted that ‘Rights of McLaren’s sponsors’ were not greatly different from those in a present-day contract. “‘Driver must take out insurance himself’ – so that’s the same. Indemniication was a bit more lightweight in those days… option to renew the agreement…”

Had Villeneuve stayed with McLaren in 1978, the money would have increased to $1500 a race, with a guaranteed minimum of $25,000. Zowie.

McLaren’s option on Gilles expired on October 31 1977, but although in the old M23 he had been sensationally quick at Silverstone, six weeks later he was informed by Mayer that
the intention was not to exercise the option. Mayer’s irst choice to partner Hunt, above Villeneuve, was Patrick Tambay, a decision James described as, “Typically bonkers…”

“Then I got a call from Ferrari,” Gilles told me, “and they seemed ready to sign me – but I couldn’t, because of the McLaren option. No way Ferrari were going to wait until October 31 to see if McLaren would take me – but there were still three races left, and McLaren were waiting to see if Tambay would get hurt or whatever. Finally Mayer said he would give me a conditional release – but only if Ferrari engaged me; if they did not, I was to give McLaren another year of option. It was a gamble, and fortunately it worked…”

“This contract of Gilles’s actually looks more sophisticated than you might have imagined,” said Whitmarsh. “Teddy was a lawyer, after all. But life has changed, hasn’t it? This is six pages, whereas now an F1 contract is 10 times that, but back in 1977, if you or I had been taking out a mortgage it would have been one or two pages, whereas today – sadly – the same thing is probably 20 or 30 pages. That’s life, isn’t it? Lawyers get richer nowadays…”

Ironically, at the time of Gilles’s death, he had agreed with Ron Dennis to return to McLaren. How different racing history might have been: the McLaren team would have been Lauda and Villeneuve, and in 1984 there would have been no place for Prost.

As it was, Gilles died at Zolder on May 8 1982, and on May 9 there was no more money from Ferrari. Contracts can be stark indeed.

Nigel Roebuck