F1 expects swift Concorde Agreement resolution
By Mat Coch
Friday 14th April, 2023 - 9:11pm
F1 suggests the next Concorde Agreement will be in place well before the current deal concludes at the end of 2025.
The Concorde Agreement is effectively a contract between the teams and the sport’s commercial rights holders offering specific guarantees.
From the teams, that is a commitment to race in all events of the Formula 1 world championship.
In exchange, they are offered prize money and other perks from the sport’s commercial rights holder.
Its existence affords Formula 1 as a business the ability to bargain with a stronger hand.
Previously, teams would negotiate appearance money and other deals with individual promoters.
First introduced in 1981, the Concorde Agreement now underpins the commercial structure within F1.
“Stefano [Domenicali, F1 president and CEO] and I were talking about [it] this morning, what we might want and when to go,” said Liberty Media CEO Greg Maffei during an investor call on Friday.
“We think it is in everybody’s interest, the teams’ and ours and the FIA’s, to solidify the success we collectively have had and show the world that we’re together, moving forward.
“But I don’t think this is going to go to the end the way prior ones have done.”
Formula 1 is currently in a strong financial position.
That is evidenced by the health of the teams themselves, none of which are at imminent risk of collapse. Historically that has not been the case.
“If you think back, more than two, less than five teams were asking [for] loans [from] Formula 1 to be alive and to survive and to make sure [they] were participants in the grand prix,” explained Domenicali.
“Today, with the things that we’ve done, the season’s very healthy, very sustainable financially, and this has given value to our business.
“That’s already something that has been recognised by all the teams.
“So at the proper time, we’re going to sit around the table, the teams will understand what we brought for them, and we will understand what we believe will be the right strategy to tackle that.”
With financial regulations now in place largely capping what teams can spend to go racing there is a degree of security around the sport’s competitors.
That has driven up their value and made them attractive investment vehicles on top of potentially profitable businesses in their own right.
The current Concorde Agreement was inked for the 2021 season and is set to expire at the end of 2025.
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