How Perez got the most expensive Christmas present of anyone in Formula 1

At the beginning of this year, Red Bull Racing surprised friend and foe by announcing Sergio Perez's contract extension as early as the beginning of June. The timing was not too good. Perez had just performed miserably in Monaco and Imola by not getting into Q3, scoring four points in Imola and even crashing in Monaco.

Talks with Perez will have taken place before those two races. Christian Horner also kept pointing to Perez's strong start. On paper, that is true. Perez was indeed on the podium four times in the first five races, but it should be noted that Red Bull Racing's car was still dominant then. Max Verstappen won those four races and the race that Verstappen had a DNF due to technical problems, Perez was not at the front with a P5 in Australia.

It was also not clear from the data why a new contract was chosen so early on. In the first five qualifying sessions, Perez showed no improvement on 2023. Perez was again more than three tenths behind Verstappen on average, a gap that was always going to be a problem as the competition got closer.

Why did Perez get a new contract?

That gap was a problem, especially because the past few years had also shown that those races were actually good races for Perez. In other words, the gap would only be bigger in other races. Horner expressed his hope that Perez would gain confidence from this new contract, but the opposite turned out to be true.

After his new deal, Perez was out qualified by Verstappen in the same car in Canada, Spain and Austria by more than six tenths. Because of those big differences, Perez failed to advance to Q3 in Canada, Spain, Britain and Hungary. Only in Belgium did he succeed again with a second starting spot, but then Perez sank to P7 in the race.

That Horner hoped Perez would be in better form was also somewhat optimistic. The previous contract extension in 2022 had taught that you should not give Perez a new contract too soon. So stated Helmut Marko after Perez's poorer performance that followed, when they had just signed his new deal.

Yet the most bizarre detail of the new deal only leaked out later: the performance clause in Perez's contract had been scrapped out. As a result, if Red Bull Racing wanted to part with Perez, it could not do so without putting money on the table. Therefore, Horner held on to Perez during the summer break in the hope that things would improve and also waited a very long time to make the choice for 2025.

Perez received a gift from Horner

That there was no longer a clause to part ways became clear in Qatar and Abu Dhabi. There, Perez took a hard line. He had a contract for 2025 and hoped Red Bull would stick to it. In any case, he wanted to continue and would not choose to retire himself. In Abu Dhabi, he stated after the race that there had to be a "good deal for both parties".

So the good deal Horner was hoping for did not come. He expressed the hope that Perez would draw his own conclusions. In other words, the request was for Perez himself to retire. Perez did not and so negotiations had to take place. The two camps came out of it. Perez no longer has a seat, but will be sitting there warm at Christmas as a result.

Why Horner chose to extend his contract and remove the performance clause remains a mystery. At the start of 2024, Horner was under pressure and stories are circulating on the paddock that Horner was mainly looking for support with a new deal for Perez. Not only from Perez, but also from his financial backer Carlos Slim. If that is indeed the case, it was an expensive 'gift' from Horner for Perez's loyalty.