Behind the thrilling action of racing on the track, there is a lot that goes behind the scenes in F1. One of those is the Concorde Agreement.
The term is a mouthful but it isn’t as complicated as it sounds. It just helps the teams, the FIA and the Formula 1 group in maintaining professionalism and staying organised.
Basically, it is a contract between the F1 teams, the governing body(FIA) and the F1 Group which dictates the terms of competing in the races. It also clarifies the matters of how television revenues and prize money gets shared.
So far there have been a total of eight versions of the agreement, the details of which are highly confidential. The first-ever Concorde agreement was signed in 1981 followed by 1987, 1992, 1997, 1998, 2009, 2013 and the latest one in 2021.
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What is the significance of the F1 Concorde Agreement?
The bosses of F1 have been keen to build a strong foundation to secure the long-term future of the championship.
The general conditions of the agreement include the obligation of the teams who sign the agreement to participate in every race.
This makes the sport more reliable for television broadcasters who make hefty investments to acquire broadcasting rights. In return, the teams get a percentage of the sport’s commercial revenue.
Though, the 2021 agreement took a lot of time before it was officially signed by all the concerned parties.
BREAKING: All 10 teams have committed their futures in F1 until 2025 after agreeing terms on a new Concorde Agreement#F1 pic.twitter.com/NNDyVzBWtE
— Formula 1 (@F1) August 19, 2020
Why did it take so long to sign the 2021 Concorde Agreement?
The discussions over the terms of the current agreement began in 2017. It was mostly about the negotiations that each of the concerned parties wanted in order to replace the 2013 version of the contract.
The initial deadline for the same was set on 31 October 2019 with the agreement heading to completion in January 2020. But the Covid-19 pandemic wreaked havoc across the globe and so the agreement was kept on hold.
During the 70th Anniversary Grand Prix held at Silverstone in 2020, Mercedes boss Toto Wolff announced that he was dissatisfied with the terms of the contract.
This particular term in question was the introduction of the budget cap from the 2021 season and a few changes in the distribution of the prize money. Wolff had argued that by these changes, his team would be the most negatively affected.
However, after a few more discussions, Wolff agreed to the terms a week later. The new agreement which runs until the 2025 season also states that the new entrants will need to pay $200 Million upfront.
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