The Concorde Agreements are signed by the 10 teams

Here we go, it’s done: the Concorde Agreements have been signed. These commercial agreements that govern Formula 1 owe their name to the fact that they were negotiated for the first time in 1981 at the FIA headquarters, which is located in Place de la Concorde in Paris. They are essential for the functioning of F1 as they provide for the distribution of profits between Liberty Media and each of the ten teams.

« The agreement has secured a long-term sustainable future for Formula 1, and combined with the new regulations that will come into effect in 2022, it is starting to reduce financial and on-track disparities between teams, thereby helping to balance the competition and create closer races on the track. All parties feel that closer races will attract more fans to the sport, benefiting every stakeholder, and help increase the global growth of the sport and their respective businesses,” explains the F1 statement.

This new version, valid for the next five seasons, is significant for several reasons. The first is that it is the first one signed under the aegis of Liberty Media after the Ecclestone and CVC Capital years. Especially, they have the stated objective of being fairer, with a better distribution among the teams. Until now, Ferrari had negotiated its status as the only team to have participated in all seasons through a 100 million euro bonus, which often saw the Scuderia being the highest-paid team on the grid, even though they only occupied third place in the Constructors’ championship.

In the future, this bonus will be significantly reduced as it is now estimated at around thirty million euros. Chase Carey therefore wanted the signing of the new agreement with the Scuderia: « During the process for the new Concorde Agreements, we appreciated Ferrari’s constructive attitude, which has always wanted to make the pinnacle of motorsports stronger, fairer, and more sustainable.

If some claim that this strengthens the presence of the current ten teams on the grid for the next five years, it should not be forgotten that the teams benefit from exit clauses and above all, the rights negotiated by one team can be transferred to a new legal structure, which opens the door to team sales. Thus, in the past, new owners have arrived at Alfa Romeo or Racing Point without losing the legacy of their predecessors.

Signing today allows you to benefit from the bonus (5 million euros) granted by Liberty Media to those who met the August 18 deadline, but above all to present to potential new investors a revenue and cost structure (thanks to the introduction of an unprecedented budget cap) established over the next five years. For a team like Williams, which has initiated a formal sales process and is listed on the stock exchange, this can only make the bride even more attractive.