Teams are currently in discussions with F1 owners Liberty Media regarding the terms of the new Concorde Agreement, which will come into effect in 2026. This agreement governs how F1 is run, encompassing both regulatory frameworks and commercial terms.
Draft terms have been sent to teams, setting the stage for intense negotiations to reach a mutually satisfactory agreement. One key point is the decision to allow Ferrari to retain its historic bonus payment, but at a reduced level.
Prize Structure Situation
The Concorde Agreement specifies the prize structure and outlines how much teams receive, both as a share of F1’s profits and based on their finishing positions in the constructors’ championship.
Under the current Concorde Agreement, which runs from 2021 to 2025, teams receive 50% of F1’s profits up to a certain point, with a smaller share if more income is generated. At current revenue levels, which exceeded $3 billion last year, F1 teams receive a 45% share.
One notable aspect of the Concorde Agreement is the historic payment Ferrari receives due to its long-term significance to the series. Ferrari is the only team to have competed in every season since the world championship began. Unlike payments based on competitive success, Ferrari’s bonus is independent of its on-track performance.
Currently, Ferrari receives at least 5% of the entire prize fund, with this figure escalating if the prize pot exceeds $1.1 billion. This escalator formula maxes out at 10% for prize pools above $1.6 billion, which is where current income levels stand.
Changes in the New Agreement
The proposed new Concorde Agreement suggests capping Ferrari’s bonus payment at 5%, regardless of the prize pool size. This means Ferrari will continue to receive a significant portion of F1’s income, but without the additional escalator bonus it has enjoyed recently.
Ongoing Debate
Opinions among Ferrari’s competitors vary. Some believe the special bonus for Ferrari is outdated, while others acknowledge the unique value Ferrari brings to the sport. Williams team boss James Vowles stated, “Ferrari brings something special to the sport. We have to be honest about that. They bring a certain level of heritage and recognition to the sport. So I think there’s a reason these things exist.”
Teams have received the draft terms, but details remain confidential. Ferrari team boss Fred Vasseur, when asked about the draft, stated, “You know perfectly that I will never reply.”
F1 CEO Stefano Domenicali emphasized the importance of stability in the new agreement. “The most important point is to keep the situation as stable as possible. These are the points of discussion. The situation is optimal to keep discussing with the teams, with all the relevant parties, the best way to finalise everything for a stronger future up to a longer term,” Domenicali said.
As negotiations continue, the focus remains on creating an agreement that ensures a stable and prosperous future for Formula 1.
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