All ten teams have signed the eighth Concorde Agreement. It sets out the conditions for participation in the sport from 2021 to 2025. It is good news for the future of Formula 1. Some teams have had to compromise, while others have a big smile on their face. will have appeared.
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What is the Concorde Agreement?
The Concorde Agreement is in a contract between the Fédération Internationale de l’Automobile (FIA), the Formula 1 manufacturers (represented by the Formula One Teams Association (FOTA)) and Formula One Administration (the Formula 1 bosses). It takes its name from the Place de la Concorde, the address of the FIA’s headquarters in Paris. There the first Concorde agreement was put on paper in 1981.
The agreement lays down the rules and the distribution of television revenues and prize money. A total of six different Concorde Agreements have been concluded since the early 1980s, all of which were kept strictly secret during the early years. The secrecy was only broken when the 1997 agreement was published by journalist Forrest Bond.
In principle, the agreement aims to increase the professionalism of Formula 1 and to make the sport a commercial success. The main stipulation in the first version was the promise that all teams would participate in every Grand Prix in a season. This was an important requirement of several television stations in the process of distributing the broadcasting rights.
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What was the stakes this time?
Compared to the previous version of the document, two major changes have been made to the latest Concorde Agreement, which will take effect from 2021 to 2025.
First, the money is distributed more fairly between the teams. Together with the introduction of the new rules, in 2022, this should ensure that the Formula 1 field becomes closer together, more than just the three major teams can claim podiums and victories, and simply put more spectacle. is in sports.
There are some winners and losers from this procedure. Logically, it is the big boys who give up in terms of prize money, so calculated Auto Motor and Sport by. Mercedes (-32 million dollars), Red Bull (-29 million), Ferrari (-25 million) and McLaren, (-8 million), the top four last year, are on the decline in a normal season. place in the championship.
For Red Bull, which also owns AlphaTauri, the new Concorde Agreement makes little difference in terms of revenue, as AlphaTauri will actually improve by $ 25 million if it ends in the same place. That’s the advantage of having a second team in your possession. Renault is also advancing $ 21 million, followed by Racing Point with $ 18 million. Haas and Alfa Romeo would both earn an extra nine million.
Ferrari in turn manages to make up for the loss with the bonus it receives because the racing stable has been present in the sport for seventy years. Twenty percent of all earnings in excess of $ 650 million from Formula 1 are paid out as a bonus. During a normal season, with the expected turnover of one billion, a total of around 70 million will be paid out to the teams eligible for the bonus, of which Ferrari will receive the majority.
Mercedes does not have a second team and only receives a small bonus, which makes it the bottom line, much to the dissatisfaction of team boss Toto Wolff. Nevertheless, the team that became world champion in the past six seasons has also signed the agreement. An ultimate attempt by Wolff, who felt that Mercedes was being disadvantaged too much, to put Formula 1 under pressure, failed.
Finally, the Concorde Agreement stipulates that the teams have less say in rule changes. That way there is no longer any need for unanimity when rules are changed, although Ferrari has in all probability still retained its right of veto.
All in all, the new treaty, the new contract between the teams, FIA and Formula 1, is a big step forward towards a sustainable Formula 1 future in which we can expect more spectacle. In the past, the teams committed themselves to the sport for the entire duration of the Concorde Agreement, but this time it is stated in the contract that the teams, if they report it before March 31, can leave the sport the following season without consequences.
In the end, it is not quite the desired result, since Ferrari still has too much of a finger in the pie, according to many, but from 2025 it could just be different.
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