Ferrari faces setback as new Concorde Agreement ends Bernie Ecclestone-era financial advantage. Ferrari is set to lose its long-standing financial advantage as all F1 teams agree to the new Concorde Agreement.

Ferrari Faces Financial Setback as F1 Teams Finalize New Concorde Agreement
The foundation of Formula 1’s structure and governance is built upon the Concorde Agreement, a contract that dictates the sport’s financial and regulatory framework between the FIA, Formula One Group, and competing teams.

Originally introduced in 1981, this crucial agreement determines a wide range of aspects within F1, including the number of races permitted per season, revenue distribution among teams, and the participation rules for manufacturers. Every team is required to sign the agreement, ensuring a unified approach to the sport’s commercial and sporting regulations.

The current Concorde Agreement, signed in 2021, expires at the end of this season, prompting negotiations for a new deal. During the Australian Grand Prix, it was revealed that all teams had reached an agreement on the ninth iteration of the contract, with one key topic being the financial implications of Cadillac’s proposed entry into the sport. However, the FIA has yet to finalize its approval, leaving some details unresolved.

Ferrari’s Exclusive Earnings Set to Be Capped Under New Concorde Agreement
While Formula 1 has experienced an unprecedented surge in popularity in recent years, Ferrari—a team that has historically enjoyed preferential financial treatment—could find itself disadvantaged under the terms of the new Concorde Agreement.

According to journalist Jon Noble on The Race F1 Podcast, the revised revenue-sharing model will see prize money distributed among 11 teams instead of 10, with Cadillac’s anticipated entry adding another contender to the financial pool. To mitigate the dilution of earnings for existing teams, Cadillac will be required to pay an anti-dilution fee of $450 million (£346 million).

This shift marks a significant departure from the financial structure shaped by Bernie Ecclestone, who previously negotiated exclusive financial benefits for Ferrari due to its long-standing presence in the sport. However, under the new agreement, Ferrari’s historic bonus is expected to be capped, bringing their earnings more in line with their competitors and signaling the end of an era of preferential treatment.

Jon Noble then elaborated on the details of the agreement, explaining that before the current Concorde Agreement, the financial structure was significantly skewed in favor of the top teams. While Ferrari still retains its historical bonus, which stands at 5%, he indicated that the new agreement would introduce a cap, preventing any further incremental increases.

Additionally, the F1 journalist noted that this bonus does not directly benefit Ferrari’s Formula 1 team, as it is allocated to the parent company and cannot be used for F1 operations. However, despite this restriction, the 5% share remains within Ferrari’s overall financial structure.

He also highlighted that previous iterations of the Concorde Agreement included a constructors’ championship bonus, which disproportionately favored teams like McLaren, Red Bull, Mercedes, and even Williams at the time. This imbalance, he suggested, stemmed from Bernie Ecclestone’s strategy of securing team commitments by offering substantial financial incentives.

Since the 2021 Concorde Agreement, he pointed out that Formula 1 has adopted a fairer distribution model, using a structured points system—awarding three, two, and one points to the top three teams in the constructors’ standings. While past success still plays a role in determining financial rewards, he emphasized that Formula 1 remains a meritocracy, where performance on the track should dictate financial compensation.

Ferrari Retains Exclusive Influence in F1’s Concorde Agreement, But Financial Edge Faces Limits

The Maranello team has long held a special status in Formula 1, a legacy reinforced by Bernie Ecclestone’s efforts to secure their loyalty through financial incentives and exclusive privileges. Their historical significance and global appeal have made them a cornerstone of the sport, ensuring they remain a key player in F1’s governance.

While the Italian side still benefits from preferential treatment under the current Concorde Agreement, upcoming changes will introduce a cap on their financial earnings, potentially altering their competitive and strategic positioning in the long run. This adjustment marks a shift from the more lucrative deals of the past, forcing the Scuderia to navigate a new financial landscape.

One of Ferrari’s most distinctive advantages is its long-standing power to veto any decision made within the Concorde Agreement—an authority granted to them in 1980. This unparalleled influence allows Ferrari to shape the sport’s regulatory and financial framework in ways no other team can, further cementing their unique role in Formula 1’s political and commercial structure.