Marc Marquez' Ever Increasing Salary: A Good Problem To Have?

By David Emmett | Thu, 26/09/2019 - 10:18

Marc Márquez is the highest paid MotoGP rider in the world. His salary is rumored to be in the region of €15 million a year, and while the numbers bandied about for rider salaries can be wildly inaccurate, there is evidence to suggest this is not far off the mark, if you will excuse the pun. HRC is said to give riders an automatic €2 million a year raise for winning the championship, so Márquez' five MotoGP titles in theory add up to a tidy €10 million since he entered the premier class. And that is on top of the base salary he stated out with, and any extra wages he may have negotiated for himself.

He is worth every penny of that to HRC. Without Márquez, Honda's championship trophy cabinet would have been conspicuously bare. In the five seasons in which Márquez won the MotoGP title, the second-placed Honda rider finished third, fourth, sixth, fourth, and seventh respectively. For a factory which regards itself as the pinnacle of motorcycling, not winning championships is not an option. The dry spell between Nicky Hayden's 2006 title and Casey Stoner's in 2011 is still a painful memory for Honda.

Poachers

So HRC know they have to keep Marc Márquez. And not just keep him, but prevent him from moving to the competition. Ducati have shown an interest in Márquez, and after the abortive attempt with Valentino Rossi, and the only-successful-once-it-was-too-late attempt with Jorge Lorenzo, the Italian factory may be ready to take a third run at throwing a lot of money at a superstar in an attempt to finally win the title which has eluded them so far.

Then there's KTM. Márquez has been a Red Bull athlete since 2009, when he rode a KTM in the 125cc class. The KTM RC16 is clearly making progress in terms of competitiveness, and is philosophically very close to the Honda RC213V. Red Bull already ponies up a lot of money to KTM for MotoGP, and the pockets of the two Austrian brands would effectively be bottomless if they believed they could sign Márquez. And with Dani Pedrosa as a test rider, they have someone with an intimate knowledge of Márquez' ability on a motorcycle.

Control

So Honda will have to give Márquez what he wants in order to keep him. They have already given him a modicum of control inside the project, changing their usual policy of rotating engineers out of the MotoGP program every three years, a change made at Márquez' request. He explained this to me earlier this year in an interview.

"Now, step by step [HRC] are starting to understand that, of course it’s important to change, but you need to keep two or three people inside the project if a project is going in a good way," Márquez told me. "And then they are starting to understand that, and they are also changing. I mean they are Japanese, of course they have their way of doing things, but they listen. And that's the reason that when I say I’m really happy with Honda, it's because I feel like I’m important in Honda. I feel I’m important because when I say something, they listen and at the minimum, they consider what I say, and this is important."

The influence Márquez has within Honda cannot be overstated. Talk to anyone who has dealings with HRC, and they will tell you the same. "Marc has a lot of control in Honda. A lot of control," one such person told me recently.

That influence will be felt most keenly at Motegi, when Márquez arrives there in three weeks' time either as the 2019 MotoGP champion, or almost certain to wrap up the title at Honda's home circuit. That title, his and Honda's sixth in seven years will make an excellent starting point for the contract negotiations which will follow.

Market value

How much will Márquez ask for? And how much will Honda be willing to pay? An added €2 million would take him to €17 million. Will he want more? €20 million? €25 million? If you were Honda, would you pay it?

Of course you would, given Márquez' track record. But that poses a different problem. Márquez' salary is starting to become a substantial proportion of HRC's MotoGP budget. Though no figures are ever made public, an educated guess would be that HRC spends between €70 and €80 million on MotoGP, based on numbers spent by other factories. Márquez' salary is closing in on consuming a quarter of HRC's MotoGP budget. If he gets a big raise, it could be closer to a third.

That, as anyone with even a rudimentary grasp of accounting can see, is a real problem. The more money HRC spends on Márquez' salary, the less there is to go around all the other areas Honda need to spend on. Give Márquez another million, and that is a big chunk of the aerodynamics budget. Give him two million, and you are starting to eat into funds which could otherwise be spent on chassis development and go toward fixing the lack of front-end feel the other Honda riders complain about.

The right balance

Does this mean that Márquez should temper his salary demands? If rider salaries follow market forces, then Márquez' unique skillset is almost literally priceless. He can ask for any number he wants, and someone will almost certainly pay it.

But if he does so, he risks cutting off his nose to spite his face. If he were to go to Honda and demand to be paid €25 million, they would be forced to pay it. But unless HRC could extract more money from Honda's corporate HQ, they would inevitably be forced to find areas of the budget to cut. And a sufficiently large wage demand would inescapably start to cut into the R&D budget.

Less money on development means less progress on improving the Honda RC213V. And less development progress means a bike which is currently hard to ride stays that way. Sure, Marc Márquez cruised to the 2019 championship, but if the Ducati GP20 is a step forward, and Yamaha find more horsepower for the M1, and the Suzuki takes another step forward next year, then Márquez would face a much tougher challenge in 2020. And an even tougher one in 2021. Eventually, his salary demands could end up costing him a title.

Marc Márquez is clearly a phenomenon, and will continue to rack up the wins and rake in the titles. He is currently the quickest route for Honda to winning the MotoGP title. But Márquez doesn't come cheap. That may be a good problem to have, but it's still a problem.

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Comments

He’s intelligent enough to understand that he cannot make demands that will undermine Honda’s ability to give him a bike on which he can win. He seems extremely hungry to win but maybe at some point that hunger will be satiated and then he will go for the cash. However moving away from a winning bike and team with whom you have good relationship is very risky and has never been successful in the modern era

Jinx (not verified)
3 years 6 months ago
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"We had an unlimited budget...and we exceeded it" ~ from a proud Lockheed engineer who worked on the SR-71 Program.

The worst economics for Honda would be to lose Marc, so they can then spend only €75 million...and finish 5th (or worse). €75 million to lose is pretty poor stewardship of corporate funds, and would only be topped by whatever Aprilia is spending* (or tossing down a rat hole, your choice).

This is not a zero sum game like a lot of US sports that are constrained by a salary cap. In the salary cap example, if you want the hottest QB, you may well have to decimate your current offensive line, and a good bit of your defense. That is not the situation here.

Honda is a €130 Billion with-a-B company. Repsol is a €60 Billion with-a-B company. And I would fully expect Repsol to have to ante up as-well as Honda, because the question is: Do you want your brand in the winners circle and the podium, or in the witness protection program with Aprilia? Hell, I had to just google the 2019 RS-GP to remember that Sky-Q is their lead sponsor, and I have seen (live or delayed) every session of every round this year. But before I looked it up I couldn't have told you who's name is on the side of the RS-GP if I was threatened with miserable death. How do we think that should make the bean counters at SKY-Q feel about their expenditures?

From Marc's standpoint, I do not think he requires a salary that would place him 47th in world GDP...by Country. But he does need more than the next fellow, and maybe as much as the next two combined. Enough of a margin that he feels appreciated. At the same time, I do not think he would stand for any slacking off in the bike development or track support end of things. And since Marc is a very intelligent young man, I would expect he would have that in his contract. So Honda and Repsol are going to have to just ante-up. And they should do it soon, and have a bunch of renewable options built in to take Marc to the end of his career. Money well spent, and HRC can get back to winning championships. And as a BMW salesman once confided to me; "it also comes without the stigma of low price". Cheers.

*For the life of me, I cannot understand why Aprilia is in MotoGP. Sure, they make some spiffy big sport bikes, but there is not really any money coming from that end of the market these days. You would bank more selling Narwhal tusk polish than pushing large Aprilias out of your dealership network. The real money is all in SE Asia with small displacement scooters and motorcycles. So what would make sense for the clever lads from Noale would be to sod the MotoGP effort and instead concentrate on absolutely dominating Moto3, which could then be marketed as a "premium feature" on all of those tiddlers Piaggio would be selling in SE Asia. The locals would go mad for scooters that had an "Aprilia - 2022 World Champions" sticker proudly displayed. Certainly it would help Piaggio more than the decals on their current models: "Aprilia - We have real hopes for finishing in the top 14, and we could have done better if Aleix would stop sobbing on the grid and Andrea could quit his soft porn and facial reconstruction career on Instagram long enough to do a few quick laps. Sigh". Cheers.

True it is probably not exactly a zero sum game but there most certainly is a budget. Perhaps not parallel, but Tom Brady has routinely reduced his compensation contract with the New England Patriots in order to allow the team to sign other players that can help him win championships. He has done this his whole career and his track record has been pretty good! Even this season is looking up for him to win yet another at age 42... Clearly Tom is the GOAT today so it worked for him and the Patriots.  

Sorry, but when I hurtled around at a blistering 69.8mph flat out on my go-faster be-striped fizzy, I never once looked with envy at the lads piling their race-prepped 125’s into the Armco at snetterton. I was all agog at Barry’s big and beautiful Suzuki ripping up the tarmac at Brands and utterly smitten by the dark and dangerous Z1, which I could pretend to be on when scraping my steel capped boots on roundabouts (if I stuck them out far enough). Boys and girls that love bikes want big bikes, even if they know they’ll never be able to afford them.

According to Forbes, Honda had ~$20B of motorcyle revenue in 2018.  If you say 1/10th of that was from sportbikes, that would be $2B.  How much of that was directly tied to Marc Marquez, and how much would it drop without winning MotoGP titles?  A MM93 for demand $20M, that'd be a measly 1% of sportbike revenue.  Write the damn check and increase the budget.  My sympathies to the finance and marketing guys holed up in a dark room trying to answer that question.

The best part is that the company who so arrogantly dismissed the GOAT is now beholden to the GOAT-elect.  One thing for sure - Red Bull and KTM will find the money.

 

https://www.forbes.com/sites/greatspeculations/2019/05/15/honda-revenue-grows-in-fy-2019-will-it-sustain-in-fy-2020/#176e59a3731b

Or, if you are KTM/Red Bull do you double down and see just how much money matters....offer him something ridiculous...say 30 million,  if he takes it you get MM for a couple years and maybe a championship,  if you dont and honda is forced to match or beat the number you put a big dent in their budget and maybe their bike development stalls...and everyone has better chance in 2021

 

Honda could take a queue from the NFL, where teams began compensating stars with pieces of ownership and/or post retirement salary. For the NFL there was/is the salary cap, so they had to figure out a way to pay more, but not now. I would expect a few team tweaks as well, such as more input to direction in electronics and the aero frills. 

Marquez bobbleheads?

Is it a disadvantage for Marquez if the Honda continues to be a difficult bike to ride? When was the last time Marc battled it out on track with Crutchlow, Nakagami or Lorenzo? On one side of the equation there is Marquez with his salary requirements and his requested direction of bike developement. On the other side is his delivery of Motogp titles. Why mess with something that works?

Near the end of Doohan's career, Mick reverted back to the screamer engine configuration from the big-bang motor. He later admitted that he did this to mess with his competitor's heads - to sow some doubt in their minds. Doohan made his bike harder to ride on purpose. Sound familiar? Marquez is big on learning from his predecessors. By mastering a difficult bike he has less competitors on track.

Every GOAT's tenure comes to an end - Ago, Rossi and someday so will Marc's. If it's a soft landing as Rossi's is turning out to be then HRC will have time to adjust. 

Marc Márquez is 14 years younger than Valentino Rossi. Fourteen years ago was 2005, which just happened to be the end of Valentino's winning streak of world championships. Yeah, he still won it in 2008 and 2009 (and had some incredibly bad luck in 2006 and the Ducati of Doom at the start of 2007 to contend with) but Márquez is about to start dealing with Fabio Quartararo in addition to Maverick Viñales, assuming Yamaha continues progressing, as well as every other new kid coming up and placing the target squarely on Marc's back from now on. Also, who knows what Gigi Daligna will come up with next year to get everybody's attention.

I expect Márquez to continue winning championships for a couple more years, but I don't expect him to continue wrapping them up in Thailand or Motegi.

This has got me wondering whether this is what played out within Yamaha with VR and JL. Did they spend so much on salaries there was not enough left for development? And by contrast, whether the reverse is true for Suzuki in the last two or three years?

 

 

There are so many innovative ways to remunerate an asset like Márquez, that they are practically unlimited.

Money is valuablefor us mere mortals, but it is not unthinkable that MM93 is already earning through differently structured pay schemes. It’s done in most other high visibility sectors of the entertainment Business and I believe MotoGP is ripe enough now to follow suit.

The way HRC is performing and running now... they might as well free Crutchlow/Lorenzo and the development team at the factory, fire Puig, and split that whole 75 million between Marquez, Nakagami and whoever they need to get their bikes from race to race. 

75 million a year and you can't develop a bike that more than 1 person can compete on at a time, despite fielding multiple WCs during his tenure. What a joke. The whole HRC operation is surviving solely on Marquez' ungodly talent and HRC's huge checking account.

A little bit of oversimplification, but basically that's the truth. It's like when Disney bought Pixar and then turned around and axed 2/3 of their own Animation Department. When you have #1, who needs the rest?

It's also that Marquez doesn't injure himself when he crashes. So as long as he doesn't hurt himself...

Ducati will surely offer him a shedload of money, but I get the feeling that it isn't all about the money for MM. When you're winning on a bike that's designed perfectly for you, you have the Factory Bosses eating out of the palm of your hand, and you're making money hand over fist, then that's pretty much it, isn't it? Why ruin a good thing, especially given Ducati's flightiness re: employees.

I would not be surprised to eventually see Alex Marquez join Marc on the Repsol Honda squad. Now whether he can ride a bike that's designed for Marc, we will see.

I don't know that the bike is designed for anybody honestly. Marquez just has the talent to ride around its problems. I wasn't following the sport back then but I imagine it was the same with Casey Stoner. HRC covers its deficiencies in bike development with the cash to attract talent that can overcome them. 

Almost every year I've been following they've been making a huge annual change to the engine while still never fully sorting out the chassis. Big bang, screamer, forward rotation, backwards rotation... this year they made the airbox tremendous, at the expense of the little front end feel the bike had.

I think HRC just doesn't have good leadership. You can see it in how they relate to their recent WCs once the contracts are finished. Rossi, Stoner, Hayden (RIP), Pedrosa... all either defected to other brands and/or endured mistreatment in their decline. I mean Alberto Puig is the team manager FFS. So I think Krop is kind of downplaying the chaos that reigns at HRC for reasons I understand. But it's there kind of in plain sight.

I don’t think that’s quite the case. The Honda/VR spat was all about which was the key ingredient, the bike or the rider so VR walked to prove his point (and didn’t he just). Nicky was indeed treated very badly through Honda seeing Dani as the No.1 but I was always under the impression that Honda and Dani were mutually loyal as far as that goes in what must be a cut throat world. It must take a certain amount of good leadership to handle the egos astride your bikes but once they’ve moved on, especially to a rival, why would you continue to invest anything in them without something in return?

I mean, Honda not wanting to acknowledge Rossi's contribution to the operation's success speaks to my point. The bike comes first and the riders have to deal with it, rather than the other way around.

And the reason riders move on from Honda is they are often treated like shit while they're there. Pedrosa was on the first thing smoking after enduring Puig's constant public evisceration. They treated Hayden like Milton from Office Space after winning a WC for them. Things with Stoner are less clear... sounds like he wasn't willing to commit enough time to be a useful test rider but ultimately they parted ways as well. So of the last 5 WCs or WC contenders only one is still committed to Honda. I think they *finally* understand to at least keep their star rider happy, but it looks like it's gonna be another decade or two before they learn how to keep other riders content as well.

Hey friends ^ !

Secure relationship for Marquez with Honda. He highly values the forever family feel and has put it a high priority. Spanish stronghold. His garage is a ship buoyant with relational strength. Plus the biggest war chest underneath them.

Hats off to Honda for revolution turn of bike after the glaring difficulty transitioning to Michelins. The bike tried to gravel-whack-nix Marquez for 2 years, and NEVER in there was a PEEP of anything but stay and smile from Marc, even if he might have to do it with one eye. His crashing himself silly, over-rolling the dice of disability days - they are done. This is the mature and settled in overdog Marc now.

Then comes this 2019 Honda MotoGP strange step. Or is it? They poured ALL their effort in a beast engine (remember seeing it best the Ducati in a drag race in Winter? Did you shudder?). And the bike, it gave front end security a toss. For now. Good lord I hope they don't get that bike handling well and providing lots of balanced feel. I like disliking Honda, and hope for a good competitive championship from several competitors. Marc will finish his career in Repsol livery. There just isn't another more Spanish-Marquez place. I hope the bike sits still in development now, while the other 4 come and grab the front. Yamaha and KTM have been SURGING. Ducati, a need for a standout rider to take two more steps. Suzuki? Consistency, more money/sponsor, and two more bikes/data. Honda, please do flubber about a bit longer while enjoying your forever-Marc.

:)

Insert of related Ducati - Honda and relationship/approach with riders...Beautista to Honda WSBK. Domenicali just said Ducati offered Bautista a new deal “with six zeros in two years” which "Beau Beau" rejected. Also that Bautista told them he wanted a move to Honda BEFORE Ducati promoted Scott Redding for 2020. WHEN DID BEAUTISTA DECIDE ON HONDA THEN, relative to his performance dive? Were these inter related?! HOW? Obviously the move was impacted by the performance drop, but...other way as well? Was it money? The "way he got treated by Ducati?" Or just Beautista feeling drawn to a reunion with Honda? The Honda - WSBK relationship has not been good. Backmarker bike. Teams tossed about. They lost Rea. It MUST be a very promising new Fireblade. And Factory Team return with it. Watch out Ducati? And, the new BMW chassis/electronics is coming with a SBK engine build at the first test. Kawasaki and Rea are still there. Yamaha, with the new engine tune rules, may be about to Aprilia? Or at least sit still.

Back to Honda/Stoner post fishing trip test rider, that was not a strong pairing on either side. Honda didn't prioritize or value Casey's feedback re what to do with the bike. He wanted to do some wildcards, especially at Phillip Island. They said no. Then Honda showed him that he should be like Doohan, and just stand around in their clothing as a regent trophy. Casey showed the World what he thought and felt about that, passed on any meaningful press and P.R. involvement, and looked dejected about it. He always hated that crap, and this was entirely expected. What wasn't was largely disregarding his development feedback, unless it was just a really poor fit for where they were going with their bike. Back then? About to be very wrong.

Somewhat surprised Casey went to Ducati, pleased that he wanted to keep riding the big boy bikes rather than just fish and fiddle with cars. He never settled in with any team in the way Marc does in the smiling Spanish mafia one. And yes, stars be damned, Marquez is a better motorcycle rider than Casey. Plus more resilient, and better supported. Marquez is better than Valentino too, at riding a motorcycle, but not at all things off the track, including secondary income to salary. Valentino is about to be the GROAT (Greatest Retired Racer of All Time) and change Yamaha for the better a second time. He and Carmelo Ezpeleta are peers and equals. Vale is bigger than a racer. Very much looking forward to the Italian Yamaha mafia to bring the next stage of things. VR46 is like a major sponsor, Rookie Cup pipeline, P.R. monster, DORNA influencer and more, wrapped up in one calzone. Will the Vale entourage get involved with the Italy based test team? Riding R1's at Misano can't be quite enough to scratch Valentino's itch alone. Will the Ranch flat track hold an event to rival the Superprestigio? Will his racing program merge with the Factory team? Sky more Blue, Yamaha gaining some Yellow?

Like the old epic Marlboro tent-city, Ducati Island stuff. Rockstar bigger than just another team significance. Monster, out stepping Red Bull.

(Hi Vis) Yellow + Blue = $Green$ (bright glowing Monster particularly)

Relationships, test riders. We have an unusually exemplary one right now. Wee Pedrosa and wee-for-now KTM, fantastic match made in heaven. Dani has great character. He is doing the business right now. Hats off to the mighty mite in Orange. And his decision to pass on being like Casey and Doohan for Honda.

The Honda-Pedrosa relationship was a quietly difficult one. They built the bike around him initially. Like it literally shrank. INJURY. Dani had injury problems, Ben Spies' Ghost - like mystery shite. He is the only rider to run a #2 plate in how long? The bridesmaid thing was real. Puig's behavior with Pedrosa at the end? Real horrible. Que gilipollas. Before that though, let's not forget that PEDROSA got the pendejo out of his garage and life, with help from Honda sending him to the Rookies Cup...and Dani had a resurgence of presence, focus, and form. Fantastic.

Zarco to Yamaha Testplacement front man now? Another good one? Connexion fluide avec Quartararo et la moto Bleue?

Lots of fans put Casey Stoner on a pedestal for taming the 2007 Ducati. He was an amazing rider, and he did well in 2008, but never really returned to dominance except for one year on the Honda. Márquez has won far  more races and championships in a similar span of time. I’m not a huge MM fan, but he’s worth every Dollar or Euro that Honda pays him ... and a little bit more. 

^ Complicated, Stoner. Talent there. Ambition WITH A BIKE primarily, there. Shared with his parents and a couple of trusted people.

But Casey struggled with a few things. One was his own disinclination to do any politics. He felt too much personally. The often manipulative and drama-headline-inches grabby press though, they (and lots of fanboy shiesters) really do a number on many riders. Including Casey. And he felt it, it wasn't okay for him. I agree.

Sickness. It was REAL, bad, and undiagnosed. When people within his own organization, perhaps peeved/struggling with Casey's honest mouth and lack of disingenuous editing, said things that implied he was not trying hard enough...he just gave up. And left mid season to get healthy. I honor that.

Stoner had been at it and only at it since childhood. He still felt like a kid. He really liked his remote controlled cars still. And had become a very private and good man as a husband and soon to be father. He was worn down. His heart was broken, really. He remained a bit hurt and resentful, understandably, and was never all the way back.

Did Casey Stoner have plenty of talent? Yes. Ambition? Yes. Heart? God yes! A broken one.

I can't imagine reaching the top and realizing your dreams, only for them to become a nightmare. You work your whole life to reach MotoGP only to discover it's absolutely awful. What a bummer. Oh well. I am sure his WCs and millions of dollars aid in consolation :)

Everybody knows MM93 will be in a Red Bull Honda F1 Car in 2022.  Right?

After he's won the 2020 & 2021 WC giving him 10 overall; the only place left with bigger pockets is the big show of F1.

And he will move onto his next thirst for speed. And I wouldn't doubt for a second that with his hunger; he could be a serious contender in F1 at RedBull now that their car is a contender and with an engine partner named HONDA.

or maybe its just me.

There's one thing stopping MM from switching manufacturer and that's his insatiable appetite for success. Whilst he believes the Honda still provides the opportunity to continue to amass race wins and world championships, he won't switch. Nor will he if another manufacturer has a slight advantage, what better way to enshrine his legacy than to do it on inferior machinery (some may argue that the Honda has been the inferior machinery for some time judged by the results of other riders).

My educated guess having followed the sport for close to two decades? He wants to be the GOAT or at least match him. In the current day that is Valentino Rossi (and you can argue Agostino had greater success considering the varieties of the era). However as it stands, Marquez will have his sights firmly set on exceeding Rossi's race wins and championship tally, of which, if he takes out the title next year in 2020 he will in doing so match Rossi's 7 premier class titles and 9 world championships overall.

One more championship beyond 2020 will ensure his consideration as the GOAT. If the above were to occur, what then? Would he remain with Honda? If he believes the bike is still capable of winning races and championships, he may well set his sights on Agostini records or putting beyond doubt the mantle of GOAT in the modern era. I believe once he has matched or exceeded Rossi's achievements he will switch then, to be one of few riders (you can count them on two hands) to have won premier class championships on two different makes. Providing KTM have developed the bike to a competitive level, as alluded to in the article, Marc's history with KTM and personal sponsorship with Red Bull could well see him there. If not then one would have to believe Ducati (purely on the account that they have the deepest pockets) followed closely by Suzuki.

 

"I feel I’m important because when I say something, they listen and at the minimum, they consider what I say, and this is important."

You have someone to thank for that Marc. 

Casey could have easily won two more championships IF he hadn't come up against lactose intolerance (no joke) and a torn up ankle. Just as Mick could have won two more if that AH Dutch (Belgian?) doctor hadn't deliberately sabotaged his broken leg.