Last Updated on March 17 2025, 12:26 pm

The Concorde Agreement is a legal tome which binds all parties involved in Formula One into a single legal framework. Each agreement over the years has a defined time scale, although in some cases the parties could not agree a new oe and so the ‘old Concorde’ deal would roll over.

The legal framework revisited and agreed once more happens every few years and is crucial for the day to day running of the sport. It dates back to the 1980’s when the first draft ended the era of ‘the handshake’ which had seen numerous political disputes plague F1 at the time.

The Concorde Agreement is a contract between FOM (commercial rights holder), the teams, the promoters and the FIA in its regulatory role. It defines how F1 is to be run and sets boundaries for issues like the maximum number of teams which can compete and the maximum number of race weekends per year.

 

 

 

There are  2 Concorde Agreements

There are in fact two Concorde Agreements which run simultaneously, one for the regulatory aspect of the sport and the other defining the commercial terms between the parties. Whilst much of this revered document is confidential, details are released which reveal the teams receive around 50% of F1’s profits.

Given the faster than predicted rise in F1’s revenue, the teams hit a limiter of the profit share since the annual income exceeded $3bn. They currently share around 45% of the profits and Ferrari retain their ‘special payment’ for being the only team to compete in every season since the inaugural one in 1950.

There are also bonus payments for achievements like winning the championship and the special Ferrari payment made is also on a sliding scale and capped at an extra 10% when the monies divested to the teams exceeds $1.6bn, which is where the income figure is currently believed to be.

The Grand Prix promoters are also bound by the Concorde Agreement and must deliver facilities to the standards set and for the maximum number of teams available on the grid that season. That maximum number of competitors was twelve in the previous agreement, which meant the arguments against Andretti/Cadillac being unable to join for logistical reasons was in fact a moot point.

Piastri vote of confidence not what it seems

 

 

 

Ecclestone squirrels away revenue

The first Concorde Agreement settled a long standing dispute between the teams and the governing body in the 1980’s which almost at times threatened to finish Formula One. Bernie Ecclestone called a meeting at the headquarters of the FIA between all parties – the address was the Place de Concorde – and so the agreement became named.

The first contract ran until 1987 and was succeeded by subsequent deals until it became time for number four. A number of the teams were outraged at this time because Bernie Ecclestone had transferred the TV rights into his commercial operation which they believed to unfair.

Concorde four latest just a year until McLaren, Williams and Tyrell reached a compromise over their share of income and the fifth Concorde deal was then signed in 1998. This became the longest deal to date running for 11 years until another crisis hit Formula One.

The Formula One Teams Association, FOTA, had been established as a kind of union which included Ferrari, McLaren, Renault, Toyota, BMW-Sauber, Brawn GP, Red Bull and Toro Rosso. They were upset by regulations the FIA attempted to force through which included and optional budget cap following the global financial crisis of 2007-08. 

Hamilton’s new engineer relationship on the rocks

 

 

 

Threat of F1 teams breakaway

Those choosing to accept the budget cap would be given greater freedoms in the area of technical design thus creating a two tier championship with different rules for different teams. The crisis was very real and FOTA even published an alternative calendar for 2010 from that issued by FOM and the FIA.

Once again all parties returned from the brink and signed the fifth Concorde Agreement which lasted until 2012. The sixth agreement was due to come into force but was signed two months late as the teams haggled for more involvement in the rules of the sport. This contract remained in place until in 2020 when one of the biggest upheavals happened in the history of the sport.

With FOM now under the control of Liberty Media and a pandemic raging across the world, the teams finally agreed to a budget cap to prevent the ludicrous disparity between the bigger and smaller teams.

Outfits like Ferrari, Red Bull and Mercedes were spending as much as four times that of the F1 minnows and the cost cap initially set at $145m was intended over time to level the playing field. With all the F1 teams eventually committed to Concorde 8, stability once again returned to the sport with all ten teams now committed until 2025.

Marko rages against mid-season rule change

 

 

 

F1 teams remarkably united

Despite the bitter rows last year about an eleventh team joining the grid for next year, it was announced in Melbourne that the current crop of ten plus Cadillac have now agreed Concorde 9 which will run until 2030.

In time we may know how the row over splitting the prize money across eleven teams not ten was finally resolved, but more interesting is the fact the FIA have yet to sign their part of the bargain.

“Formula One has never been in a stronger position and all stakeholders have seen positive benefits and significant growth,” read a statement posted by Reuters on Sunday. “The 2026 Concorde Governance Agreement will be finalised in due course.”

This is the second of the two parts to the Concorde deals and negotiations are being led by FIA president Mohammed Ben Sulayem. Since his election in 2021, Ben Sulayem  has been at odds with FOM on a number of matters and he is clearly is holding out for more money for the FIA, as is usually the case.

How Red Bull strategy error cost Verstappen GP win in Melbourne

 

 

 

FIA demanding more money

The last increase in finance for the FIA that Ben Sulayem forced through, was when at the last minute the teams and FOM agreed to increase the number of Sprint weekends from 3 to 6 and the FIA demanded incremental resources for them to police these track sessions.

The statement of course highlights it is just the FIA who are yet to sign the deal which binds F1 together for the next half a decade and may well signify FOM feel some pressure is required to resolve outstanding differences.

It cannot be overstated the divisions the teams have overcome to sign the latest Concorde deal, given the likes of Zak Brown were calling for Red Bull to be forced to divest of their sister team now called the Racing Bulls.

Prior to the commencement of last season Brown said: “AlphaTauri is, from what I understand, moving to the UK, which I think will benefit both teams. This A/B team and co-ownership, which is a whole other level of A/B team, is of big concern for the health of the sport, the fairness of the sport.

Sky F1 presenter says “Sergio Perez is laughing”

 

 

 

Row over two team ownership

“When these [regulations] were put in place, the sport was in a different place. You had a huge gap between people like ourselves who had huge budgets and smaller teams, and now everybody’s pretty much at the [cost] cap – so everyone’s playing with the same size of bat, to use a baseball term.

“It might give someone an unfair advantage and I think that’s something we need to tackle quickly,” said the McLaren CEO. He added he hoped the next Concorde agreement would provide a ‘runway’ for the divestment of the Red Bull second team to ensure that by the next contract in 2030 two F1 teams owned by the same entity wold be outlawed.

Yet whilst brown refers to the historic reasons which saw the Red Bull entity own two Formula One teams, his lack of intimate knowledge of the details suggests he doesn’t understand how crucial was the decision of Didi Mateschitz to acquire the failing Minardi team.

Following the turn of the millennium, F1 was not in the rude health it enjoys now. Teams would go bust frequently and manufacturers wold come and go from the sport almost as they pleased. The FIA and Bernie Ecclestone begged Dietrich Mateschitz to save the ailing Minardi team so Red Bull effectively did F1 a favour by acquiring it.

Marko criticises the “embarrassing” Hadjar

 

 

 

Fastest lap bonus point dropped

On the whole the Chinese wall which separates the majority of the Racing Bulls from Red Bull Racing have been respected and there has been no evidence illegal information sharing between the two. However, it was noticeable that following Brown’s objections, the World Motorsport Council decided to drop the extra F1 point for fastest lap after V-CARB’s decision during the Singapore Grand Prix.

With McLaren hunting down Red Bull and Max Verstappen for the 2024 F1 titles, in the closing laps of the race V-CARB sent Daniel Ricciardo out on fresh rubber. Whilst he was not awarded the extra point for the fastest lap because he finished outside the top ten, he and V-CARB denied McLaren what may have proven to be a vital single point at the end of the season.

Some may say this proves Brown’s point that Red Bull and their sister team should be completely separate in terms of ownership, yet what Ricciardo did was no worse than in previous year’s Ferrari asking their customer teams to do them a favour mid-Grand Prix.

That may be to switch tyre strategy to hold up another Ferrari competitor or simply make it as difficult as possible for a rival driver to pass them, even though they are effectively in a different race. Banning a common ownership of two or more teams does not resolve the issue of sympathetic co-operation which has existed since the very first days of Formula One.

The point is there were some pretty big issues for the F1 team’s to face which has now been done and yet it is the FIA who appear to be holding out on signing the next Concorde Agreement. And it will be all about money.

Hamilton SLAMS Ferrari pit wall: “The flop of the weekend”

 

 

 

 

Norris calls out Red Bull choice of second driver

With the first weekend of the Formula one season now complete, the host of F1 observers who believed that McLaren have had the best of the winter car development, were proven right. The team were cruising to their 52nd ever 1-2 finish, when the rain returned late in the Melbourne race causing havoc throughout the field.

Norris and Piastri misjudged the grip in the penultimate corner with both leaving the circuit and scrabbling to return to the asphalt. Norris made it back ahead of Verstappen, but home boy Piastri remained stuck in the grass and finally rejoined at the rear of the pack.

The final result saw Verstappen claim P2 as Norris racked up his his fifth Grand Prix win, all in the last nineteen F1 weekends and he now equals the world champions win tally over the same time period.  The race result meant for the first tine since the 2022 Spanish Grand Prix, another driver besides Max Verstappen was now leading the drivers’ title race and the intrigue did not stop there… READ MORE