A Formula 1 statement said: “The agreement will ensure the long-term sustainable future of Formula 1 and, combined with the new regulations announced in October 2019, which will come into force in 2022, will reduce financial and track inequalities between teams, help improve competition conditions and create tighter races on the track. which our fans want to see more. In 1995, the FIA decided to transfer the commercial rights of Formula 1 from OFAC to the Formula 1 administration for a period of 14 years. In return, Ecclestone would make an annual payment. McLaren, Williams and Tyrrell protested by rejecting the draft Concorde agreement (negotiations of which began in 1993). Ken Tyrrell, in particular, was furious that Ecclestone, as president of OFAC, had negotiated the transfer of the organization`s rights to his own company. Tyrrell also objected that the addendum to the deal was secret, arguing that the secrecy of the deal only benefited Ecclestone (by weakening the bargaining power of the other parties). A new trade deal to reduce financial disparities between teams, create a level playing field and close the performance gap on track is the next part of this process. The FIA and Formula 1 would like to thank all the teams for their continued commitment over the past few weeks, and while there are always solid discussions, the agreement of all the teams creates an important foundation for the long-term future of the sport. Negotiations on the terms of replacing the 2013 agreement began in 2017 as part of broader discussions on the future of sport, but the deadline for an agreement has been extended to 31 October 2019. It has been reported that the agreement is about to be finalised in January 2020.

[14] However, it was ultimately delayed due to the COVID-19 pandemic. [15] On the weekend of the 70th Anniversary Grand Prix, Mercedes team principal Toto Wolff explained his dissatisfaction with the terms of the new agreement, which consisted of introducing a budget cap from the 2021 season and changing the distribution of prizes. Wolff believed his team would be the most negatively affected. [16] In response, the deadline for signing the agreement, which had previously been set at August 12, was extended by one week. However, after discussions with Chase Carey, Wolff changed his position and agreed to sign the new agreement. [18] The new Concorde agreement aims to protect the value of established teams by requiring new entrants to pay $200 million, divided equally among 10 existing teams, in exchange for the right to revenue sharing in the first year of competition. So far, new entries will only receive the prize from the second year of the competition. [19] The agreement is, among other things, a commercial document setting out how Formula 1 television revenues and prizes will be distributed – and are expected to expire at the end of the year. “You have to look at these things holistically. That`s what the deal was, that`s what Chase Carey and Liberty put on the table, and it was up to the teams to decide whether they chose to take it or leave it. So far, there have been seven Concorde agreements (1981, 1987, 1992, 1997, 1998, 2009 and 2013).

The eighth and most recent Concorde Agreement entered into force in 2021 and is valid until 2025. Disagreements between the two organizations, which became known by the nom de guerre FISA-FOCA, led to the cancellation of several races. Goodyear threatened to withdraw completely from Formula One, an event that would have been commercially disastrous for the sport, so Ecclestone held a meeting of team principals, Balestre and other FISA representatives at the FIA offices at Place de la Concorde in Paris, France. On 19 January 1981, after thirteen hours of negotiations, all the parties present signed the first Concorde Agreement, named after the Paris square where the talks took place. All three teams refused to sign the proposed Concorde agreement, initially with the support of the remaining teams. The 5. However, in September 1996, the new Concorde agreement was signed by all teams except McLaren, Williams and Tyrrell. The agreement was to run from 1 January 1997 to 2002. On 27 March 2006, the five teams supported by the Grand Prix Manufacturers` Association – BMW Sauber, Renault, Honda, McLaren and Toyota – submitted their applications for the 2008 season and agreed to remain in the sport until 2012.

[8] [9] On 14 May 2006, the five GPMA-supported teams signed a Memorandum of Understanding with the Commercial Rights Holders (CVC/Ecclestone), which served as the basis for the next Concorde agreement. [10] As a result, there was no full agreement for the 2008 season, with the memorandum, extensions and agreements with the other individual teams serving as a temporary solution. Ferrari`s argument in favour of special treatment is obvious and can be better summed up by parts of its announcement of the signing of the new agreement: “the only team that has participated every year” in the World Championship with a fan base of “more than 400 million worldwide”, and in a home race at Mugello in a few weeks “will be the first team, which has reached the milestone of participation “in 1000 Grands Prix”. With the seventh Concorde contract ending in December 2020, the new Concorde contract was approved and signed by all participating manufacturers: Ferrari, Mercedes, McLaren, Redbull, Alpine (formerly Renault F1), Williams, Alfa Romeo, AlfaTauri, Hass, Aston Martin (formerly Racing Point F1), Formula 1 Group and the FIA. The agreement is a binding contract that defines the governance structure, the distribution of revenues/cash prizes among all parties involved and other business aspects of the business. In order for a constructors` team to participate in and compete in the championship, it must comply with the conditions set out in the Concorde Agreement. Formula 1 and the FIA say the new agreement “will ensure the long-term sustainable future of Formula 1” and will work in tandem with the budget cap and new technical rules (from 2022) to “reduce financial and long-term disparities between teams” and help “create a level playing field”. Teams that received additional payments will still receive them, but this share will be reduced and will go to the other teams – not that either party will discuss the exact distribution; some were not at all willing to talk about the agreement. Liberty Media stressed its desire for a fairer distribution of funds from the moment they took over the sport, and they kept their promises on this front with the first Concorde they negotiated. It is called the Concorde Agreement because the first agreement was signed in 1981 at the FIA headquarters on the Place de la Concorde in Paris. On 18 August 2020, Ferrari, McLaren and Williams announced that they had signed the new Concorde agreement,[20][21][22] while the following day, Formula 1 announced that the other teams had also signed the agreement.

[23] The new agreement, which was the first under liberty Media`s new owners, will cover the 2021 to 2025 seasons and will take effect on January 1, 2021. The effect of the agreements is to promote professionalism and increase the commercial success of Formula One. The most important factor in achieving this was the commitment of the teams to participate in each race, making the sport more reliable for broadcasters who had to invest heavily to acquire the TV broadcast rights. In return, the teams were guaranteed a percentage of the sport`s commercial revenue. After all teams signed the recent Concorde deal, former Formula One CEO Chase Carey said: Such a deal removes speculation that some teams, such as Mercedes, might not stay. “This is an important deal for Formula 1 and while the details are confidential, it offers stability and continuity for the future, so we are delighted to get it through,” Horner said. The challenges posed by the virus served as a further reminder that something had to change so that after the championship resumed, discussions on a trade deal could also take place. “We said earlier this year that the Concorde agreement would take longer to reach an agreement due to the fluid nature of the pandemic, and we are pleased that all ten teams will reach an agreement by August on plans for the long-term future of our sport.