International Automobile Federation (FIA) president Max Mosley late Friday signed a new Concorde Agreement, the pact that governs Formula One by binding sanctioning body the FIA, the sport's commercial rights holder, and teams to the basis on...
International Automobile Federation (FIA) president Max Mosley late Friday signed a new Concorde Agreement, the pact that governs Formula One by binding sanctioning body the FIA, the sport's commercial rights holder, and teams to the basis on which teams participate in the championship and share its commercial success.
The agreement, which runs to more than a hundred pages, is named for the Paris location of FIA headquarters, the Place de la Concorde, and is famously secret. The first Concorde Agreement was agreed in 1981 with renewals thereafter. The new pact replaces one that expired at the end of 2007.
Nine of 10 existing teams and three start-up teams will be bound by the agreement through the end of 2012. BMW Sauber announced Wednesday it will leave the sport at the end of the season. Sky Sports reported BMW Sauber will be given until Wednesday to sign the agreement should their plans change. New teams covered by the pact are Campos Meta, Manor GP and USF1.
Mosley signed the document after it was approved by the FIA's World Motor Sport Council. An FIA announcement applauded the action "heralding a renewed period of stability for the FIA Formula One Championship."
The WMSC also approved a revised set of sporting and technical regulations that will apply from 2010. Teams and the FIA had agreed on the revisions.
The new Concorde Agreement continues procedures set forth in the 1998 Concorde Agreement. Decisions are made by working groups and commissions, and all teams have voting rights. The WMSC ratifies decisions.
CVC Capital Partners is controlling shareholder of F1's commercial rights. Formula One Group, an assemblage of entities run by Bernie Ecclestone, administers those rights, which include television and event staging deals.
Formula One, the most expensive sport staged annually worldwide and the most popular motorsport, takes nearly $4 billion in annual revenues, according to Business Week magazine.
A desire by teams to share more of those earnings than previously allowed played a part in a rambunctious public spat that sullied the sport through spring and into summer before teams and the FIA agreed upon key issues, including a format to cut spending.
Fearing for the future of a sport as known for its profligacy as its technical innovation, Mosley sought a spending cap of 30 million pounds ($50 million) to be introduced for the 2010 season. The figure was a tenth the annual spend of a number of teams -- Ferrari and Toyota in particular are thought to spend upwards of $400 million a season. Any team adhering to a budget cap would enjoy technical regulations that wouldn't apply to noncapped teams, Mosley proposed. His proposal was not fully embraced. A plan called "resource restriction" rather than budget capping was adopted June 24. It will reduce spending more gradually. The desired target is budgets of the early 1990s, which were typically below $50 million.