(Motorsports news) In contrast to the sometimes combative discussions of the earlier Bernie Ecclestone era, the current agreement, which spans from 2021 through 2025, was negotiated by former F1 CEO Chase Carey. Even though the successor Concorde won’t be in operation until 2026, preliminary negotiations have already started. This is the first to happen during Stefano Domenicali’s leadership as the CEO of Formula 1.
According to Maffei, negotiations are lot simpler now that there is a better relationship between F1 and the teams and everyone is aware that the overall revenue pie is growing. At a Goldman Sachs event, Maffei claimed, “Historically, the Concorde Agreement was a snot-gobbling fight, and it never got signed until after the season had already ended.”
And they were making decisions based on their compensation in reverse. We succeeded this time. We’re attempting to alter the dynamic, and I give Chase Carey and Stefano credit for it because the teams now have a much more harmonious dynamic. “That doesn’t mean they want to pay us more, but they all see the value of the work we’re doing together and the fact that expanding the pie has been good for everyone, regardless of who is receiving it. Additionally, giving them stability and assurance regarding our direction is advantageous to them.
“As we’ve increased EBITDA [profits before interest, taxes, depreciation, and amortization], you’ve seen the value of F1 rise tremendously. However, the valuations of the teams have really risen considerably more quickly. They recognize the advantages of the regime we have jointly established and the benefits of maintaining that agreement. According to Maffei, a swift agreement for 2026 will bring stability, enabling F1 and the teams to secure long-term sponsorship agreements and other agreements.
We’re essentially talking about an early renewal of a contract with terms quite similar to those they now have, he explained. “Why do we believe that is advantageous? I believe that we can all convince potential sponsors, broadcasters, and spectators of the certainty of the sport, eliminating any potential danger.
“I believe the teams have the chance to go out and pitch those concepts to the same sponsors. That being said, everyone sort of wants to keep the current government in place. And I believe there is a lot of interest in that.
Maffei stated that because Concorde F1/Liberty now earns more on a sliding scale as overall revenue increases, the overall percentage of F1 revenue that is divided with the teams has decreased. “If you look over the last five years, that percentage paid to the teams has gone down,” he declared. “That’s mainly because there’s a point at which we start kicking in a bigger percentage.
“We promised to guarantee ‘X’ payouts, but after a certain percentage, we’re betting on ourselves,” the statement continued. And we’ll accept a greater split if we reach that portion of pre-team EBITDA.
Because the amount over that split number has increased as the sport has progressed, so has our share. He stated, “I don’t expect a huge change in how that operates with the next Concorde. We’ll have an incentive to expand the business, and there will probably be something along those lines. “They [the teams] have significantly increased EBITDA. We have simply been able to grow it faster as a result of our success and our belief in both the product and ourselves. I anticipate that any Concorde extensions would follow a similar structure.