What is the F1 Concorde Agreement? All to know about the contract

F1 teams are constantly in discussion with series owners Liberty Media about the new Concorde Agreement, which is set to come into effect in 2026.

The Concorde Agreement is pivotal for the day-to-day running of F1 and dates back to the 1980s, when it ended political disputes that plagued the championship at the time.

Several editions of the Concorde Agreement have since been signed, with F1 currently under its eighth term – so what exactly is it?

What is the F1 Concorde Agreement?

The Concorde Agreement is a contract between F1, its governing body the FIA and the teams who compete in the series. It defines how F1 is run – with one agreement relating to the regulatory framework of grand prix racing, and another outlining the commercial terms.

What the Concorde Agreement contains is largely confidential, but it’s still known that the contract states how much the championship finishing positions are worth. Teams also receive a 50% share of F1’s profits up to a certain point, with that share then decreasing if more income is generated. It is understood that F1 teams currently receive 45% of the prize pot after revenue exceeded $3billion in 2023.

Bonus payments are also included for achievements like winning the championship. Meanwhile, Ferrari controversially receives a historical bonus for being the only team to have competed in every F1 season since the championship’s debut in 1950.

It is understood that Ferrari receives an extra 5% if the total prize pot distributed to teams does not surpass $1.1b. Ferrari’s bonus is eventually capped at 10% for anything above and beyond an approximate revenue of $1.6b – exactly where the income figures are currently understood to be.

Williams team boss James Vowles said in 2023: “I think Ferrari brings something special to the sport. We have to be honest about that. If you ask an average person who they know in Formula 1, you will see that Ferrari is still a name that stands out. That’s the truth behind it. They bring a certain level of heritage and recognition to the sport. So I think there’s a reason these things exist.”

The entry fee for F1 ($657,837 per year) and the cost cap ($135m per year) are other conditions included within the Concorde Agreement. But it is not all financial, as the contract also states the obligation for teams to participate in…