Marc Márquez is the highest paid MotoGP rider in the world, and he has renewed his contract for 4 years with the team which allowed him to join the premier category, HRC. According to sources, his salary is estimated between 12 and 16 million euros per year, and while pilot salary figures can be wildly inaccurate, there is evidence to suggest that this figure is not far off the mark. The HRC would give riders an automatic raise of 2 million euros per year for winning the championship, so Márquez's five MotoGP titles would theoretically add up to 10 million euros since he entered the premier class. And that's on top of the base salary he negotiated, and any additional income he might have with his sponsors.
But for HRC, it's worth it. Better yet, he deserves it. Without Márquez, Honda's championship trophy cabinet would have been desperately empty. In the six seasons in which Marquez won the MotoGP title, the second Honda rider finished third, fourth, sixth, fourth, seventh and then nineteenth respectively. With the exception of 2019 and the Lorenzo episode, for a factory that considers itself the pinnacle of motorcycling, not winning championships is not an option. The drought between Nicky Hayden's title in 2006 and that obtained by Casey Stoner in 2011 remains a painful memory for Honda.
A highly sought-after driver
So HRC knew they had to keep Marc Márquez. And not just keep it, but prevent it from moving on to the competition. Ducati showed interest in Márquez, and after the failed attempt with Valentino Rossi and the only successful attempt once it was too late with Jorge Lorenzo, the Italian factory could have been ready to perform a third round, giving a lot money to a superstar to try to finally win the title that has eluded them until now.
Then there was KTM. Márquez has been a Red Bull athlete since 2009, when he rode a KTM in the 125cc class. The KTM RC16 clearly progresses in terms of competitiveness, and is philosophically very close to the Honda RC213V. Red Bull already brings in a lot of money for KTM for MotoGP, and the pockets of both Austrian brands would be effectively bottomless if they thought they could sign Márquez. And with Dani Pedrosa as their test rider, they have someone with intimate knowledge of Márquez's ability on a motorcycle.
In short, if Marc Márquez had wanted to leave Honda, he would have had the choice, and competition encourages negotiation, in favor of the driver.
A win-win contract
Honda will therefore have had little room for maneuver in financial negotiations with Márquez in order to keep him. They have already given him a modicum of control within the project, changing their usual policy of rotating MotoGP program engineers every three years, a change made at Márquez's request. And yet, the Japanese have very rigorous methods, and are not the most flexible in changing minds. But they listen and consider their flagship driver at its true value.
Márquez's influence within Honda cannot be underestimated. Talk to anyone connected to HRC, and they'll tell you the same thing: Marc has a lot of influence on Honda.
This influence was strengthened when Márquez arrived in Motegi having already been crowned 2019 MotoGP World Champion, 4 races before the end of the championship. This title, his sixth personally but also for the Honda manufacturer in seven years, was obviously an excellent starting point for the contractual negotiations that followed.
All work merits salary
How much could Marquez have asked for? And above all, how much could Honda have put on the table? An additional €2 million would take it to between €14 million and €18 million. Did he ask for more? 20 million euros? 25 million euros? If you were Honda, would you pay for it?
Of course you would, given Márquez's track record. Everyone negotiates their salary based on their past experiences, and no one wants to see a reduction in their salary. But here we are talking about several million euros, and that poses a different problem. Márquez's salary is starting to become a substantial part of HRC's MotoGP budget. Although no figures are ever made public, an educated guess would be that HRC spends between €70 and €80 million on MotoGP, based on figures spent by other factories. Márquez's salary is close to a quarter of HRC's MotoGP budget. If he gets a good raise, it could be closer to a third.
This, as anyone with even a rudimentary knowledge of accounting can see, is a real problem. The more money HRC spends on Márquez's salary, the more cuts must be made in all the other areas Honda has to spend on. Give Márquez another million, and that's a big chunk of the aerodynamics budget. Give it two million, and you start eating away at funds that could otherwise be spent on chassis development and addressing the lack of front-end feel that other Honda riders complain about.
A question of balance
Does this mean that Márquez should have tempered his salary demands? If pilot salaries follow market forces, Márquez's unique skills are almost invaluable. He can ask for whatever salary he wants and someone will definitely pay him.
The risk is to pull the rug out from under your feet. If he asked to be paid 25 million euros by HRC, they would be obliged to pay him. But unless HRC could extract more money from Honda headquarters, they would inevitably be forced to find areas to cut the budget. And a sufficiently large wage demand would inevitably begin to reduce the R&D budget. No source is inexhaustible, even less so in times of coronavirus.
Less money for development means fewer modifications made in an effort to improve the Honda RC213V. And less development means that a motorcycle that is currently known to be difficult to ride will remain difficult to ride. Sure, Marc Márquez led the 2019 championship, but if the Ducati GP20 takes a step forward, if Yamaha finds more power for the M1, and if the Suzuki takes another step forward in 2020, then Márquez would face a much more difficult challenge this year. And even more difficult in 2021. Ultimately, his salary demands could end up costing him a title. Only the future will tell us…
Marc Márquez is clearly a phenomenon and will continue to accumulate victories and titles. He is currently the fastest way for Honda to win the MotoGP title. But Márquez is not cheap. This might be what you'd call a good problem, but it's still a problem. And every problem has its solution!
