New Concorde F1 Agreement: 11 teams sign commercial agreement

During the Australian Grand Prix weekend in 2025, Formula 1 confirmed news shaping the future of the sport: the 11 teams participating in the championship from 2026 have signed the commercial aspect of the Concorde Agreement. This signing marks a significant step for the long-term economic viability of the discipline. However, the governance aspect still needs to be finalized.

What is the Concorde Agreement?

The Concorde Agreement is a tripartite contract that binds Formula 1 (via Liberty Media), the FIA, and the participating teams. This fundamental document defines the commercial and regulatory aspects of the championship. Its name comes from the place where the first agreement was negotiated in 1981: Place de la Concorde in Paris, which was the FIA’s headquarters at the time.

This contract consists of two distinct parts: one commercial, which has just been signed, and the other concerning governance, which will be finalized in due course, according to the official F1 statement.

In addition, in this statement, Formula 1 declared: « Formula 1 confirms that all teams have signed the Concorde Commercial Agreement 2026, thus ensuring the long-term economic stability of the sport. Formula 1 has never been in such a strong position, and all stakeholders have gained positive benefits and significant growth. We thank all the teams for their commitment throughout this process to achieve the best outcome for the sport. »

The stakes of the new 2026-2030 agreement

The new agreement will cover the period 2026-2030, coinciding with the introduction of new technical regulations. With 11 signatory teams – the current 10 teams plus the new entrant Cadillac – this agreement reflects the exceptional economic health of the discipline, very different from the crisis context that surrounded the signing of the previous agreement in August 2020, in the midst of the Covid-19 pandemic.

The new signing comes five months earlier than the previous agreement, suggesting a smoother negotiation between the parties. Moreover, according to several sources, the terms would be more favorable for the teams, a direct consequence of the commercial boom that F1 has experienced in recent years.

The arrival of Cadillac as the eleventh team also required adjustments. The new agreement includes the terms for calculating the anti-dilution fees paid by the American manufacturer to the existing teams – a mechanism that compensates for the potential reduction of their share of the financial pie.

A revised income distribution framework

If the precise content of the agreement remains confidential, certain aspects have leaked in the paddocks. The financial value of championship positions and the distribution of revenues were at the heart of discussions. Currently, teams receive about 45% of the profits generated by F1 once revenues exceed 3 billion dollars, as was the case in 2023 (3.2 billion dollars) and 2024 (3.41 billion dollars).

Ferrari, the only team present since the creation of the championship in 1950, will retain its privileged treatment, but with a revised cap. Indeed, its historical bonus would now be limited to 5%, compared to a more generous system previously. A concession that James Vowles, director of Williams, considered legitimate in 2023: « I think Ferrari brings something special to this sport. We have to be honest about that. If you ask an average person which team they know in Formula 1, you will see that Ferrari remains a name that stands out. That’s the reality. The team brings a certain heritage and recognition to the sport. So I think there is a reason for the existence of these things. », he had stated.

The budget ceiling and the implications of the new agreement

One of the major discussion points around the new agreement concerns the budget cap. Established with the previous agreement at 145 million dollars and then gradually reduced to 135 million currently, it could be increased to 220 million dollars for the 2026-2030 period, but with more stipulations.

Discussions particularly took place regarding the inclusion of maternity leave and employee events (summer or Christmas parties) in this cap. These proposals had raised concerns, particularly about hiring women or holding events rewarding staff, which they could have discouraged. The FIA had finally confirmed that these elements would remain excluded from the scope of the budget cap.

Governance, the next project to finalize

While the commercial aspect is now agreed upon, all parties must now focus on finalizing the governance agreement. This part will specifically determine the teams’ entry fees, voting procedures, the respective powers of the FIA, F1, and the teams, as well as other regulatory aspects essential for the operation of F1 from 2026 onwards.

Stefano Domenicali, recently confirmed in his role as CEO of F1 until 2029, had previously indicated he favors continuity: “We are in discussions with the teams. The most important element is to keep the situation as stable as possible. […] The situation is ideal to continue discussions with the teams and all involved parties in order to finalize every aspect as best as possible for a stronger and long-term future.”

The signing of the new trade agreement is an essential step in preparing for the regulatory revolution of 2026, which will notably bring profound changes to power units. With teams committed for five years and a stable economic framework, Formula 1 can look to the future with confidence.