Lewis Hamilton is on course to become one of the world’s richest sportsmen after signing a new five-year contract with McLaren Mercedes yesterday thought to be worth at least £70 million. The deal, which could be considerably more in value when bonuses and other endorsements are added, ties Hamilton to McLaren until the end of the 2012 season but he may stay even longer should he fulfil his early promise.

Hamilton was grinning from ear to ear as he posed for an official photograph to mark the deal with Ron Dennis, the McLaren team principal, and Martin Whitmarsh, the chief executive, at the company headquarters outside Woking in Surrey.

Describing his contract extension as “fantastic”, the 23-year-old from Stevenage in Hertfordshire said: “I am with the right team to compete for race wins and the drivers’ and constructors’ world championships. We will have a lot of challenges ahead, but I am 100 per cent positive I am with the people to take them on.”

Dennis said that, after the initial Formula One contract for last season - under which Hamilton is thought to have earned a total of about £1 million - the driver had exceeded all expectations during a rookie season in which he finished as runner-up in the world championship. “Lewis is an exceptional human being on both a personal and professional level and will continue to be a credit to this team,” Dennis said.

Although Hamilton’s remuneration may seem excessive, it will not make him the best-paid driver in Formula One. That category remains occupied by Kimi Raikkonen, Finland’s reigning world champion, who is estimated to be earning around £25 million a year over three seasons at Ferrari.

The new deal for Hamilton was negotiated by his father, Anthony, the best evidence yet of Hamilton Sr’s determination to retain control of his son’s affairs as manager and not bring in outside consultants, as some have advised him to do.

Like Dennis, Hamilton Sr was delighted with the continuing relationship with McLaren, which goes back to when his son was only 13 and racing in karts. “It is an amazing thing to have been signed by McLaren and Mercedes-Benz back in 1998 and to be given the opportunity to achieve a better life than one would ever have dreamt could happen,” he said.

It is thought that his son will earn a baseline figure of about £10 million a year, which will increase with each successive season. On top of that, he will earn bonuses, possibly for each race win but certainly in the event that he wins a drivers’ championship or the team win a constructors’ title.

There was some debate among independent experts about how much the bonuses could be worth, with some suggesting that Hamilton could net as much as £10 million extra for a championship. However, one well-placed observer reckoned that was unlikely. “It would not be that big because when you start getting into the £12-14-16 million-a-year category, they [McLaren] are expecting you to be there or thereabouts anyway, so a bonus for a title could be £2 million.”

Another element in Hamilton’s total earnings is the degree to which McLaren are allowing him to sign private sponsorship deals or product endorsements. Normally the team do not allow this, but it is thought that Hamilton has been permitted.

Apart from the announcement itself, a significant element yesterday was Dennis’s prominent presence. This might seem perfectly normal for a team principal, but it came amid increasing speculation that Dennis’s 28-year tenure at the head of McLaren is drawing to a close after a traumatic season last year.

The Formula One rumour mill suggests that pressure from Mercedes has already resulted in a decision to ease Dennis out and that only the presenta-tional aspects of how this should be handled remain to be finalised. However, the word at McLaren is that nothing has been decided, that Dennis is still mulling things over and that discussions about possible equity shifts in the company (potentially in favour of Mercedes) are entirely normal at this time of year.

British wealth:

- David Beckham’s deal with Los Angeles Galaxy could net him £128 million over five years
- Dario Franchitti, the Nascar driver, earns £15 million a year
- Jensen Button’s contract with the Honda Formula One team is estimated at £12 million a year
- Wayne Rooney earned £9 million last year, including sponsors’ deals
- Just behind were John Terry and Steven Gerrard, with salary and deals worth an estimated £8 million a year each

Source: Times Archive