Lewis Hamilton's retirement is a strong possibility amidst F1 contract negotiations

Lewis Hamilton has completed 10 years as a Mercedes driver. When he first donned the Mercedes outfit in 2013, no one would have guessed the kind of success that awaited him. Six world championships and countless wins and podiums later, it's safe to say that his decision to leave McLaren and join the Silver Arrows has worked out well.

The 2023 F1 season is the last on his current contract. Both Hamilton and Mercedes team principal Toto Wolff have suggested that the contract extension is nothing but a mere formality. Contrary to the rumors floating around, however, a Lewis Hamilton retirement at the end of the 2023 F1 season is a very strong possibility!

Now, I'm not predicting Hamilton to retire at the end of the season. If that does happen, however, I won't be surprised one bit!

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The delay in contract extension should be a worry

Four major soundbites have appeared regarding Lewis Hamilton's contract extension. The first was from the Briton himself when he mentioned in an interview that he was looking to finalize the contract extension before the end of the 2022 F1 season.

The second development came from Toto Wolff, who said that the contract extension is only a conversation away. The Mercedes boss was aiming to finalize the extension during the winter break.

The third development came when a report by the French outlet Sportune stated that a new contract would involve a two-year extension and a 10-year brand ambassador role for Hamilton.

The fourth development is the most recent one in which Wolff stated that there hasn't been any conversation with Hamilton about a contract extension.

In all these four soundbites, what we've seen is a process of kicking the can further up the road. There are two possible reasons why this could have happened. The first is that the contract has already been signed and the team is waiting for the right time to announce it to the world. The second could be that the contract negotiations are getting delayed for one reason or the other.

In the case of the former, Lewis Hamilton fans have nothing to worry about. However, in the case of the latter, it should be a worry, especially since there are factors that could force Mercedes to reconsider its terms of engagement.

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The Lewis Hamilton contract is a massive commitment

One of the major bottlenecks for Mercedes when looking to extend Lewis Hamilton's contract is the amount of financial strain it puts the team under. Even if we assume that the Sportune report was way off the mark, Hamilton's current contract makes him the highest-paid driver on the F1 grid (Max Verstappen pips him if we include 2022's championship bonus).

Hamilton has been the highest-paid driver on the grid for a long time now and Mercedes were willing to give him those contracts because he was still going to be around for some time. Moreover, he was the star driver on the grid. Apart from producing some stunning seasons in 2017 and 2018, he was also a global presence that marketed the Mercedes brand as nobody else could.

At 38 years of age, it would be foolish to think that Mercedes will have no doubts about how good the Briton will be in his last F1 contract. Will a 40-year-old Lewis Hamilton — the age he would be in his last F1 season if he signs the extension — be worth paying more than $50 million a year? In terms of commercial success, Hamilton will continue to be one, but in terms of on-track performance, there is certainly a question mark since that is uncharted territory.

One cannot fault Mercedes for questioning how good or how close to his peak Lewis Hamilton will be as a 40-year-old and whether he is worth the kind of money that he's getting paid right now.

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George Russell as a replacement seems ready to take over

The second factor that Mercedes might have to think long and hard over is George Russell's achievements last season. If anybody needs a refresher, Russell outscored Lewis Hamilton last year in what was his very first season with the team.

Now, there are many that would feel that Lewis Hamilton was unlucky, and hence was not outperformed by George Russell. Fair enough! Let's assume Hamilton was unlucky. Even so, is it fair to suggest that in his very first season in a top team, Russell could adapt and come very close to his veteran teammate in terms of performance?

In his very first season, Russell offered stiff competition to Hamilton, with the former outscoring the latter. Looking at the future, it's safe to say that Russell is the driver around whom Mercedes will be looking to create its setup.

Having said that, the question that Mercedes needs to answer is whether Hamilton, who brings almost the same level of performance as Russell, is worth being paid 18 times more than his teammate? (Lewis Hamilton's salary= $55 million, George Russell's salary= $3 million).

Hamilton might be a seven-time world champion and should be compensated accordingly, but 18 times the second driver that outscored him? In terms of running a business, this variance is going to raise a lot of eyebrows at the Mercedes headquarters.

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Lewis Hamilton is not the best F1 driver anymore

Finally, I feel this is something that probably gets missed in all the glitz and glamor around Lewis Hamilton's contract discussions. The last two seasons have been eye-openers for many in the paddock. The 2021 F1 season was the first time Hamilton was subjected to a relentless and intense challenge for the title in the turbo hybrid era by someone outside of Mercedes.

Even if we keep the Michael Masi debacle to one side, there was one thing that was quite obvious that season: Max Verstappen was clearly the better driver of the two. To further accentuate the point, Verstappen was voted the best driver on the grid that season by drivers and team principals alike.

Even in 2022, Verstappen took the honors as the best driver on the grid, pipping Charles Leclerc, not Lewis Hamilton. In the last couple of years, it has become clear that Hamilton is no longer the benchmark on the F1 grid.

Now, as an organization that wants to give a driver the biggest contract on the F1 grid, there are some serious questions that need answering. Is Mercedes willing to give Lewis Hamilton the biggest contract on the F1 grid despite him being:

1. Closer to the twilight of his career,
2. Paid 18 times more than his teammate who is producing similar results,
3. No longer the best driver on the grid?

Now, it is quite possible that Mercedes will still go ahead and sign Hamilton — at least I hope that happens since he is a legend of the sport.

Concurrently, however, I wouldn't be surprised if the two parties are unable to reach an agreement and we end up with Lewis Hamilton retiring from the sport.