Scuderia Ferrari is poised to maintain its historic bonus payment in the upcoming Formula 1 Concorde Agreement, albeit with a cap on the amount of extra money it will receive.
Teams are currently in negotiations with F1’s owners, Liberty Media, regarding the terms of the new Concorde Agreement set to take effect in 2026. This agreement outlines the operational framework for F1, covering both regulatory and commercial aspects. Draft terms have been shared with the teams as part of the ongoing discussions, which are expected to be intense to ensure all parties are satisfied. One key point in these terms is for Ferrari to keep its bonus payment, though at a reduced level.
Prize Structure Context
The Concorde Agreement specifies the prize distribution structure, detailing how much each team receives based on their finishing positions in the constructors’ championship. Under the current agreement, which runs from 2021 to 2025, teams receive a 50% share of F1’s profits up to a certain threshold, with a smaller share allocated if more income is generated. With revenues exceeding $3 billion last year, teams currently receive a 45% share.
A unique aspect of the Concorde Agreement is the historic payment Ferrari receives due to its longstanding significance to the series. Ferrari is the only team to have competed in every season since the world championship began. Unlike other payments based on performance, Ferrari’s bonus is independent of its track success. Under the current agreement, Ferrari receives at least 5% of the total prize fund.
Ferrari gets this baseline figure if the total prize pool distributed to teams does not exceed $1.1 billion. However, an escalator formula increases Ferrari’s share as the prize pool grows, capping at 10% when the income surpasses approximately $1.6 billion, the current revenue level. Sources indicate that the new Concorde Agreement proposes capping Ferrari’s bonus payment at 5%, regardless of the prize pool size. This change means Ferrari will still receive a substantial portion of F1’s revenue, but it will forfeit the escalator bonus it currently enjoys.
The special bonus for Ferrari has been a point of contention. Some competitors argue that it’s time to end this unique treatment, while others acknowledge the rationale behind it, given the Italian side’s historical significance to the sport.
Last year, James Vowles, the team boss of Williams, acknowledged the unique value Ferrari adds to Formula 1. He admitted that Ferrari is a standout name recognized by the average person when asked about the sport, emphasizing the heritage and recognition the team brings to Formula 1. Vowles expressed that there are valid reasons for the special provisions that exist for Ferrari.
As for the draft terms of the Concorde Agreement distributed by Formula 1, teams have received them but are keeping details close to the vest, showing reluctance to comment publicly on their thoughts at this stage.
When questioned about the Concorde Agreement at the Imola race, Ferrari team boss Fred Vasseur playfully dodged providing any specifics. He made it clear that he wouldn’t respond to questions about the agreement, noting the futility of expecting an answer despite the continued interest in the topic.
During a recent earnings call, Stefano Domenicali, the chief executive officer of Formula 1, discussed the ongoing negotiations for the Concorde Agreement. He emphasized the goal of maintaining stability and continuity from the previous agreement. The Italian manager noted the importance of these discussions in shaping a solid future for the sport, although specific details could not yet be shared. He reassured that updates would be provided when feasible, highlighting the ongoing dialogue with the teams and all relevant parties to secure a long-term, beneficial arrangement.
Leave a Reply