Silver bullet?

Proposed new cost controls in F1 go far beyond just limiting how much teams can spend on technology

- DIETER RENCKEN

Formula 1 is governed by the Concorde Agreement, which outlines the mutual obligations of the sport’s governing body (FIA), its commercial rights holder (Liberty Media, trading as F1) and all competing teams. As such, the agreement provides F1’s commercial structures and its regulatory framework, last named having the powers to supersede the FIA’s International Sporting Code on all matters save for safety provisions.

The Concorde Agreement is effectively F1’s constitution, and renewing (or extending) the document can be longwinded. The 1998-2007 Concorde was replaced on 1 January 2010, but only after F1 had been pushed to the edge of breakaway threats. That consensus is not readily forthcoming is no surprise. The 12 signatories have disparate agendas and differing business models.

Having been introduced in 2013, the current Concorde expires at the end of 2020, and so the renewal process commenced late last year. That said, in March 2018, during its first full teams presentation, Liberty outlined its future vision, with a key aspect being a re-distribution of F1’s billion dollar prize ‘pot’, which currently sees the top three cream a third offthe top in bonuses, before the remainder is split amongst all teams.

Under this structure, Ferrari receives $100m annually simply to pitch, with results payments on top, while a team such as Renault, currently fifth in the championship chase, is hard pressed to earn more than $70m, assuming it finishes in its current position.