Kurt Verlin
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New Lewis Hamilton Contract is Only for One Year

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Lewis Hamilton smiling on the pit wall, at the 2018 British GP
Photo: Jen Ross via CC

Seven-time Formula 1 champion Lewis Hamilton was technically out of contract since the start of 2021, but there was little doubt he would return to the sport for another season. His long-awaited confirmation did, however, come with a surprise: unlike in the past, his contract with Mercedes was renewed for only a year.

During an online press conference, team principal Toto Wolff said, “There was never a moment where we thought he wouldn’t sign and there was never a moment where he doubted.” So why did it take so long to get a confirmation, and why for only a year?

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Why did it take so long?

Ultimately, time ended up being a more crucial factor than expected. The COVID-19 pandemic initially made it difficult to meet face-to-face — something you tend to want when negotiating multi-million-dollar deals. There was no real urgency to sign a new contract, as both sides trusted the other wanted to continue together.

Hamilton and the team then decided to postpone talks to focus on the title, but soon after securing it, the new champion tested positive for the coronavirus, once more preventing face time. The start of negotiations thus didn’t take place until the week before Christmas.

Furthermore, Hamilton became much more socially active in 2020, particularly in support of Black Lives Matter, which was a factor in the negotiations. The team says a significant part of their agreement builds upon their “commitment to greater diversity and inclusion in motorsports.”

“I’m equally determined to continue the journey we started to make motorsport more diverse for future generations,” Hamilton added. “I’m proud to say we are taking that effort further this year by launching a foundation dedicated to diversity and inclusion in the sport.”

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Why only a year?

These things may explain the confirmation delay, but why sign for only a year? Back in 2017, when Hamilton had signed for three more seasons, he had begun signaling it could be his last stint in F1 as his interest outside the sport grew.

And with new regulations coming in 2022, the sport could shift substantially after the upcoming season. A one-year contract enables Hamilton to focus on winning a record eighth title and then decide with the team how to move forward from there.

Additionally, new financial regulations within the sport, a pandemic-impacted economy, and the automotive industry’s massive push toward electric mobility, have all made the fiscal reality of competing in F1 a bigger issue.

“Lewis has always recognized that this is a very difficult period,” Wolff said. “Difficult for everybody, difficult from a health point of view, there’s much more important topics than Formula One racing, and also the auto industry is in a transformation phase. So the money topic wasn’t the sticking point. It was more about [getting a deal done to] let us get going quickly for 2021.”

It’s possible that if Lewis Hamilton bows out of F1 after winning an eighth title in 2021, Mercedes will not stick around any longer than it has to.