Concorde Agreement

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The Concorde Agreement (originally “Maranello Agreement”) was a contract between the Fédération Internationale de l'Automobile (FIA), the individual Formula 1 teams and the Formula One Administration (FOA). It basically regulated the distribution of commercial revenue and prize money to the teams. It also dealt with travel allowances, number of races and teams, responsibilities of the institutions and the process for rule changes. The Driver Contract Recognition Agreement was also part of the Concorde Agreement.

With the agreement, the teams committed themselves to participate in the races of the Formula 1 World Championship, which made negotiations with television stations much easier. The agreement was the basis for the increasing popularity of the Formula 1 World Championship and the wealth of many people involved, in particular multi-billionaire Bernie Ecclestone .

The contracting parties treated the content confidentially, but some key data have become known over time.

The first of the meanwhile six Concorde Agreements was concluded in 1981, the following in 1987, 1992, 1997, 1998 and 2009. From 2008 to mid-2009 there was no valid Concorde Agreement, but all parties agreed on the terms of the fifth Concorde Agreement to maintain. Since the 2013 season, there has again been no valid Concorde Agreement, instead the Formula One Group concluded separate agreements with the individual teams.

The first Concorde Agreement from 1981

The FISA-FOCA war

In 1978 the Commission Sportive Internationale (CSI), a sub-organization of the FIA ​​and responsible for the Formula 1 regulations, was dissolved and replaced by the Fédération Internationale du Sport Automobile (FISA). Jean-Marie Balestre chaired the meeting . He was supported by the manufacturers Renault , Ferrari and Alfa Romeo .

That same year, Ecclestone became chairman of the Formula One Constructors Association (FOCA) with Max Mosley serving as his legal advisor. The FOCA represented the interests of most, mostly British, teams.

Tensions between the parties increased with the start-up accident in Buenos Aires in 1979 . Jody Scheckter (Ferrari) and John Watson collided in the second corner. Scheckter injured his wrist and, like five other drivers, was unable to start again. Nelson Piquet also injured his foot. Balestre saw the fault with Watson and demanded that he not be allowed to start again. Watson eventually finished third but was fined. Ecclestone prevented the other drivers from commenting on the incident and managed to pay the fine.

As a result, Balestre publicly discredited Ecclestone because, for example, he demanded more and more money from the route operators so that the FOCA teams could even travel. In the summer of 1979 Balestre banned the teams from advertising their cars, tried to prevent the FOCA-associated race in Long Beach , changed the regulations in favor of the FISA teams and introduced fines for drivers who did not show up for the preliminary meetings.

In February 1980, Balestre published a new set of rules for the 1981 season . By raising the minimum weight and banning the ground effect, the turbo engines of its manufacturers should be given an advantage. On April 15, 1980, the FIA ​​dissolved the Grand Prix World Championship for the coming season , founded the FIA Formula 1 World Championship and reinstated FISA for the organization. This enabled Balestre to push through all rule changes.

As a result, the drivers of the FOCA teams stayed away from the meetings, as this rule only came into effect from the following season. The situation boiled over at the Spanish Grand Prix . Balestre demanded the fines from the drivers, otherwise they would lose their license. Ecclestone countered with the threat of a boycott. Finally, the King of Spain Juan Carlos personally urged the organizers to continue the event, they excluded the FISA teams from the event. The FOCA teams contested the race alone. Balestre then declared it a pirate race and didn't count it for the world championship.

In October 1980, FOCA announced a competition series for 1981. It was called the World Professional Drivers Championship and had the World Federation of Motor Sport (WFMS) as its sporting authority. A racing calendar with 18 races was presented for the 1981 season, which largely coincided with the Formula 1 calendar, but replaced some races with others and had some additional ones. The first race took place on February 7th at the Kyalami racetrack in South Africa. With the announcement of this race it was possible to put the FISA under pressure. This required more time, extended the registration period for the teams to the end of January and postponed their race dates. The first race in Argentina at the end of January was provisionally canceled and the second race in South Africa was postponed from February 7th to April 11th. However, the organizers of the South Africa race already had contracts with FOCA for February 7th. This was then held as the only Formula Libre race and was later counted among the Formula 1 races without world championship status. The previously canceled Argentina race was held on April 12th.

The Maranello Agreement

On the initiative of Enzo Ferrari, the manufacturers invited the FOCA teams to Maranello to resolve their differences. On January 19, 1981 they jointly signed the Maranello Agreement. While Balestre was pursuing a blocking tactic, Renault announced in mid-February that they would face the FOCA teams in Long Beach on March 15, whatever Balestre chooses. Shortly thereafter, Ferrari followed, and then Alfa Romeo and Talbot .

Balestre realized that there was nothing he could do about the agreement between the manufacturers and the designers, so he finally came to an agreement with Ecclestone. On March 11th, he too signed the agreement. At Balestre's request, it was renamed the Concorde Agreement, after the Place de la Concorde in Paris . The first agreement ran until December 31, 1987.

Effects

The agreement recognized the FIA, respectively FISA, both as the supreme regulatory body and as the holder of the commercial rights, with the commercial rights being granted to the FOCA. Thus, FISA had its championship back and full control of the technical regulations. The television broadcasting rights were administered by the FOCA and the income from it was distributed, the distribution key being unclear. In addition, private teams were banned from Formula 1, so each team had to produce its own chassis. The teams were now obliged to take part in all races. The races became uniform events and the sport became more professional.

From 1982 Ecclestone rented the broadcasting rights to the European Broadcasting Union and made them broadcast all races in the future. The interest in the sport increased strongly, sponsors were drawn ashore and brought a lot of money into the coffers of the teams. Apart from the route operators, who were only able to negotiate with FOCA according to uniform ideas, everyone was satisfied.

It was also at the urging of Enzo Ferrari of Scuderia Ferrari one produced as the only team that both chassis and engine itself and also participated since 1950 called on the then automotive world championship racing series, veto conceded by the team to block all major decisions .

The second Concorde Agreement from 1987

Ecclestone founded the company Formula One Promotions and Administration (FOPA), which received the commercial rights from FOCA. Of the television money, 47 percent went to the teams and 30 percent to a company called Allsopp, Parker & Marsh , which in turn gave part of it to the FIA. FOPA kept the remaining 23% to itself. In addition, all of the money from the Grand Prix fees flowed into FOPA, for which it took over the financial security and the prize money. In 1987 the total prize pool was $ 915,000 per race. For the years up to 1991 there was an annual increase depending on the American economic barometer.

The second agreement was signed in 1987 and ran until December 31, 1991.

In 1988 Ecclestone sold the Brabham team and now mainly took care of the organization of Formula 1.

The third Concorde Agreement from 1992

The Driver Contract Recognition Agreement has been part of the Concorde Agreement since 1992. It comprised around 25 of the entire 100 pages and defined the Contract Recognition Board , an independent arbitration board where contracts between drivers and teams are deposited. Since this version, the total amount of the prize money was no longer fixed.

The third agreement ran until December 31, 1996.

The 1994 Variation Agreement

After the accidental deaths of Roland Ratzenberger and Ayrton Senna at the San Marino Grand Prix in 1994 , a variation agreement was concluded as part of safety discussions. As a result, the Concorde Agreement was expanded to include Article 7.5. This article allowed the FIA ​​to change the rules without the consent of the teams and also during a season if the safety of the drivers is too endangered due to technical developments.

The fourth Concorde Agreement from 1997

All the contracts that Ecclestone had made up to that point were signed on behalf of FOCA. To change this, he signed a contract with the FIA ​​in late 1995, headed by Mosley since 1991. This leased the commercial rights from 1997 for 14 years directly to Ecclestone's own company Formula One Management (FOM), which means that these could no longer be lent to FOCA. The FOM now got all the money directly from the TV rights, of which it continued to distribute 47 percent to the teams, and from the Grand Prix fees, from which it financed the prize money.

The teams McLaren , Williams and Tyrrell wanted more of the income from the TV rights and refused to sign the new Concorde Agreement. These teams were left with no income and no say.

The fourth agreement was signed on September 5, 1996 and was intended to run until December 31, 2002, but was prematurely replaced by the 1998 version.

The 1997 agreement was published in 2005 as part of new disputes by RaceFax.com for more transparency in Formula 1. It consists of 103 pages and revealed the exact money distribution key.

The fifth Concorde Agreement from 1998

To persuade the teams to sign a new deal, Ecclestone borrowed $ 1.4 billion and promised the teams a stake if his company went public. However, this was never an option for him, he didn't want to work in a stock company. It was just a trick, but it worked. Until all parties were satisfied, over 30 versions were worked out over a period of more than a year.

The agreement was finally signed by all parties except Sauber on May 23 and 24, 1998 in Monaco . Due to problems between the FIA ​​and the European Commission, Sauber waited until the end of July to sign. The fifth Concorde Agreement ran until December 31, 2007.

The agreement required the teams to participate in up to 17 races per year. In the previous agreements there were 16.

As part of the deal, Teams Williams and McLaren signed an additional agreement with Bernie Ecclestone. This should bring the two teams money in case Ecclestone sells company shares. Although Ecclestone sold shares four times, the teams never saw any money. For years, the two teams have tried to sue their respective law firms for damages because they failed to recognize the loopholes in the contracts. The two teams may have been negotiating with the wrong company from Ecclestone's empire. As part of the takeover of the Formula 1 rights by Alpha Prema in late 2005 / early 2006, both cases were settled out of court.

Paul Stoddart said years later that the teams that did not sign the previous agreement received a large sum of money for signing them.

The 2006 Memorandum of Understanding

From 1999 Ecclestone sold the first 50 percent of its company shares. These were taken over by KirchMedia in 2001 . In addition, a 25 percent option was redeemed. Thus KirchMedia had the majority of the commercial rights. The Formula 1 teams now feared that Formula 1 could go under on pay TV and thus reduce the value of their own advertising space. This triggered power struggles in Formula 1. Manufacturers and teams came together to create a stable platform for a safer future. After failed negotiations with Leo Kirch, the manufacturers' association GPWC Holding began planning an alternative world championship from 2008.

In April 2002 the Kirch group filed for bankruptcy. Negotiations about the shares were unsuccessful. In July 2002, the Kirch shares passed to the creditor banks and were distributed proportionally to the loans granted - 62.2 percent to Bayerische Landesbank and 18.9 percent each to Lehman Brothers and JPMorgan . This ended the pay-TV discussions, but not the battle for money.

In December 2004, Bernie Ecclestone offered the teams $ 500 million to sign a new Concorde Agreement that ran until the end of 2012. The teams did not accept this offer.

On January 19, 2005, Ferrari, the FIA ​​and Ecclestone jointly announced that they had signed a commercial agreement that would tie Ferrari to Formula 1 through 2012. Ferrari got about twice the income from commercial rights, a veto right on all votes and a signature bonus of 80 million US dollars. This made it possible to drive a wedge between the GPWC teams. During the year, Red Bull (previously Jaguar ), Jordan (later Midland F1 , later Spyker ) and Toro Rosso (previously Minardi ) also signed similar agreements. Williams followed in December and finally the new Super Aguri team in February 2006 . With this it was at least possible in the future to hold races with 3 racing cars per team and Formula 1 could have continued in the event of a split.

During the Spanish Grand Prix , the GPWC teams reached an agreement with Ecclestone and signed a memorandum of understanding. With that the alternative series was off the table - at least for the time being.

From then on, the memorandum of understanding defined the distribution of income - but not the rules after the 1998 Concorde Agreement expired.

According to the Concorde Agreement, 47 percent of the income from TV rights was distributed among the teams. In 2004 that was about $ 150 million, with the best team getting about 22 million and the worst team about 11 million. In addition to the TV rights, Formula 1 also generated income through Grand Prix fees, perimeter advertising and the paddock club. If you look at all of the income, the teams only received about 23 percent of the entire cake. With the completion of the memorandum of understanding, the teams now received 50 percent of all income. For winning the designer title in 2007, Ferrari received 47.5 million euros.

Between November 2005 and April 2006, Alpha Prema, with the majority shareholder CVC, took over the entire commercial rights of Formula 1 ( SLEC and Allsport Management , which is responsible for the marketing of advertising space on racetracks and the paddock club). The previous Concorde Agreements included payments from all participating teams to Ferrari because they “did a lot for the sport”. On June 6, 2006 it was announced that the CVC will be responsible for these funds in the future.

The sixth Concorde Agreement from 2009

Despite efforts to find a new Concorde Agreement, none was concluded by the start of the season. So the 2008 season began without a valid agreement. The teams and Ecclestone largely agreed, but Max Mosley refused to sign because he feared losing a lot of power. When Mosley was confirmed in office after his sex scandal on June 3, 2008, discussions about the pirate series flared up again. On July 29th, the founding of the Formula One Teams Association (FOTA) was decided.

On March 17, 2009, the FIA ​​announced the already ratified rules for the 2010 season. These included a voluntary budget ceiling of £ 30 million per season. Teams that adhered to this should be given more technical freedom, such as a different underbody, adjustable blades or an engine with no speed limit. The FIA ​​took the liberty of adapting the rules at any time in order to keep the two classes in balance. Such parallel regulations were unacceptable to the FOTA teams.

The two teams Williams and Force India registered unconditionally and were temporarily excluded from the FOTA.

All other existing teams registered for the 2010 season by the registration deadline at the end of May, but under two conditions: The rules of the 2009 season were to be applied and a new Concorde Agreement had to be signed by June 12th. Mosley, on the other hand, wanted to publish a definitive list of teams on June 12th and asked the FOTA teams to sign up unconditionally so they could participate in the rules discussion. The parties got closer in the following days. Mosley was willing to forego the parallel regulation, but stubbornly stuck to the budget limit.

On June 12, 2009, Mosley presented a provisional list. Ferrari, Red Bull, Toro Rosso, Williams, Force India and the newcomers Campos (later HRT ), US F1 and Manor (later Virgin ) were the fixed starters. The FOTA teams McLaren, BMW , Renault, Toyota and Brawn (later Mercedes ) were marked with an asterisk. It was said that they wanted to have discussions with them in order to clear up the differences and to present the definitive list in a week. Mosley took the liberty of nominating teams Ferrari, Red Bull and Toro Rosso because of the agreements made in 2005 without any conditions. However, the teams assured that under these circumstances they would not take part in the 2010 World Cup.

This week there were more meetings, both sides were more willing to compromise and were getting closer. Ultimately, the matter failed due to the regulatory process and a fixed budget limit. On June 19, no new list was presented by Mosley, but the FOTA teams announced their split and the establishment of their own racing series.

An agreement was announced on June 24th. There was now no budget limit, hence no two-tier regulations. In future, FOTA was responsible for cost control. To this end, a new Concorde Agreement and an obligation to participate until the end of 2012 were signed. As another point of the agreement, Mosley no longer ran for FIA president.

Finally, the new Concorde Agreement was signed by the FIA ​​on July 31, 2009 and by the teams on August 5. The agreement ran until December 31, 2012.

The previous Concorde Agreements comprised around 100 pages. The sixth Concorde Agreement is said to have had around 350 pages, 250 of which regulated the distribution of income.

Concorde contracts

The 2013 season started without a valid Concorde Agreement. Ten of the eleven teams signed separate agreements, so-called Concorde contracts, with the Formula One Group , only Marussia initially drove without a contract. If a contract had not been concluded by the end of the season, Marussia would not have been involved in the distribution of the revenue to the teams. The right of veto for Ferrari, which was anchored in the first Concorde Agreement, was retained.

After long negotiations, Ecclestone and FIA President Jean Todt agreed on a new agreement in July 2013, which was ratified by the two contracting parties on September 27, 2013. However, there were only individually signed agreements with the teams, and this approach gradually came under criticism from individual teams, who viewed themselves as disadvantaged.

Six teams were guaranteed a seat in the so-called strategy group in the Concorde contracts , in which changes to the regulations are voted on before they are submitted to the FIA's World Motorsport Council for ratification. These teams are Ferrari, McLaren , Red Bull , Mercedes , Williams , as well as the other team best placed in last year's constructors' championship. In addition, Ferrari, McLaren, Red Bull, Mercedes and Williams secured different annual special payments in the double-digit millions. As a result, Ferrari received the highest payments from the FOM in 2015 after fourth place in the 2014 constructors' championship with $ 164 million, but the Williams team, which was immediately ahead of Ferrari, received only around half of them with $ 83 million. The uneven distribution of income led Force India and Sauber to lodge a complaint with the EU Competition Commission in September 2015 .

Individual evidence

  1. ↑ a b c Poachers turned gamekeepers: how the FOCA became the new FIA . Mattijs Diepraam, November 21, 2007.
  2. ↑ Kyalami South Africa 1981  ( page no longer available , search in web archives ). www.f1db.com/forums, April 15, 2006.@1@ 2Template: Dead Link / www.f1db.com
  3. ↑ a b c d Grand prix, grand prizes . The Economist, July 13, 2000.
  4. ↑ a b Christian Nimmervoll, Dieter Rencken: Jean Todt disappointed by Ferrari: the right of veto is "like a weapon". Motorsport-Total.com, November 1, 2015, accessed November 1, 2015 .
  5. ↑ a b c The 1997 Concorde Agreement - Bringing Transparency to formula 1 . Forrest Bond, www.racefax.com, December 13, 2005. Retrieved January 8, 2011.
  6. ↑ Mosley pulls a hidden ace out of his sleeve . www.motorsport-total.com, June 24, 2004.
  7. ^ Will the Concorde Agreement be scrapped? . www.grandprix.com, May 26, 1997.
  8. ↑ Revealed: This is how the money is distributed in Formula 1 . www.motorsport-total.com, December 17, 2005.
  9. ↑ Dennis: "Ecclestone stole Formula 1 from us" . www.motorsport-total.com, December 19, 2010.
  10. ^ The Concorde Agreement . www.grandprix.com, May 25, 1998.
  11. ↑ Sauber re-signs with Ferrari . www.grandprix.com, July 27, 1998.
  12. ^ A b McLaren and Williams are suing law firms . www.motorsport-total.com, December 7, 2004.
  13. ↑ McLaren and Williams continue to fight for their millions . www.motorsport-total.com, December 10, 2005.
  14. ↑ McLaren and 'Baker and McKenzie' back in court . www.motorsport-total.com, January 16, 2006.
  15. ^ Agreement between McLaren and 'Baker and McKenzie . www.motorsport-total.com, January 17, 2006.
  16. ↑ Interview: Paul Stoddart indicts . www.motorsport-total.com, June 14, 2003.
  17. ↑ Case No COMP / M.4066 - CVC / SLEC (PDF; 275 kB). Commission of the European Communities, March 20, 2006. Retrieved September 28, 2012.
  18. ↑ Ecclestone: "Teams can have the money" . www.motorsport-total.com, December 7, 2004.
  19. ^ FIA press release ( Memento of December 16, 2010 in the Internet Archive ). January 19, 2005.
  20. ↑ Ferrari remains in Formula 1 - 'GPWC' off the table? . www.motorsport-total.com, January 19, 2005.
  21. ↑ a b c GPMA 'manufacturer: "Didn't give in" . www.motorsport-total.com, March 28, 2006.
  22. ↑ Ecclestone: "We bought Ferrari's loyalty" . www.motorsport-total.com, December 20, 2008.
  23. ↑ Only $ 22 million for Ferrari . www.motorsport-total.com, October 28, 2004.
  24. ↑ The biggest Ferrari budget ever . www.motorsport-total.com, February 10, 2008.
  25. ↑ Stoddart: "Why do all teams have to pay Ferrari?" . www.motorsport-total.com, January 17, 2005.
  26. ↑ CVC 'pays bonuses to Ferrari . www.motorsport-total.com, June 6, 2006.
  27. ↑ Formula 1 again facing a crucial test! . www.motorsport-total.com, June 7, 2008.
  28. ↑ Howett confirms: Pirate series is discussed! . www.motorsport-total.com, June 7, 2008.
  29. ↑ Interview: Mosley explains the budget constraint . www.motorsport-total.com, March 17, 2009.
  30. ^ Force India: No break with FOTA . www.motorsport-total.com, June 7, 2009.
  31. ↑ FOTA teams: Mention with conditions . www.motorsport-total.com, May 29, 2009.
  32. ↑ Mosley urges FOTA: Make no conditions . www.motorsport-total.com, June 8, 2009.
  33. ↑ FOTA meets Mosley: last-minute rescue? . www.motorsport-total.com, June 11, 2009.
  34. ↑ FIA entry list for 2010: FOTA teams are there! . www.motorsport-total.com, June 12, 2009.
  35. ↑ The madness: "Pirate series" is decided! . www.motorsport-total.com, June 19, 2009.
  36. ↑ FIA / FOTA: The cornerstones of the agreement . www.motorsport-total.com, June 24, 2009.
  37. ↑ New Concorde Agreement: Mosley has signed . www.motorsport-total.com, August 1, 2009.
  38. ↑ Finally: teams sign Concorde Agreement . www.motorsport-total.com, August 5, 2009.
  39. ^ Concorde Agreement: Agreement in sight . www.motorsport-total.com, July 15, 2009.
  40. ↑ Marussia continues without Ecclestone Treaty: "Makes us worry" . www.motorsport-total.com, July 11, 2013.
  41. ^ FIA ratifies new Concorde Agreement . www.motorsport-total.com, September 27, 2013.
  42. ↑ Christian Nimmervoll, Dieter Rencken: "Bernie Money": Thus, the Formula 1 money distributed. Motorsport-Total.com, April 6, 2013, accessed November 1, 2015 .
  43. ↑ Dieter Rencken: Some are the same: How the Formula 1 money is distributed. Motorsport-Total.com, May 14, 2015, accessed November 1, 2015 .
  44. ↑ Ian Parkes: Formula 1 "unfair": teams submit a complaint to the EU. Motorsport-Total.com, September 29, 2015, accessed November 1, 2015 .