The contract that is currently in place and active from 2021 to 2025 was chartered under the guidance of former F1 CEO, Chase Carey. This agreement was deemed as one indicative of a newfound spirit of camaraderie, a significant leap when compared to the rather contentious discussions witnessed in the Bernie Ecclestone era.
As for the future, preliminary chats about the next Concorde have already kick-started, led by F1‘s new CEO, Stefano Domenicali, even though its effective start date is only from 2026. Amidst this, Greg Maffei, the President and CEO of Liberty Media, claims that the talks around this subject have become less complex due, in large part, to F1 and team members striking a better rapport, ultimately understanding the prospect of enhancing the sport’s overall revenue.
“Back in time, the Concorde Agreement was a snot-gobbling fight, and eventually never got sealed until the season had come to an end,” Maffei admitted during an event hosted by Goldman Sachs. “The teams were essentially operating in reverse when it came to their pay. However, this time around, we have managed to get it sorted out. The credit for this changing dynamic goes to Carey first and now Domenicali. We have managed to establish a much stronger alignment with the teams,” he continued.
Continuing, Maffei remarked, “This doesn’t necessarily imply that they’re enthusiastic about paying us more, but they are unanimous when it comes to admitting the value we bring to the table together, and how expanding the revenue pie has been advantageous for everyone. Offering stability and clear direction on our moves going forward works well for the teams too.”
According to Maffei, F1’s valuation has seen a significant leap as a result of EBITDA (earnings before interest, taxes, depreciation and amortisation) growth. However, he was quick to highlight that the team’s valuations have grown at a pace much quicker in comparison. The teams have recognised the benefits reaped from the ecosystem, prompting them to support the idea of extending the current agreement.
A sooner-than-expected agreement for the period post-2026 will infuse greater stability, thereby assisting both F1 and the teams to lock in long-term sponsorship contracts and other such agreements. Maffei is of the belief that this arrangement lays the groundwork for all parties involved to rope in sponsors, broadcasters, and sell the constancy of the sport, consequently easing out any potential future risks.
With respect to revenue, Maffei noted that the total percentage of F1‘s profits divided amongst the teams has reduced. This is predominantly because the present Concorde agreement permits F1/Liberty to bank more as the overall revenue witnesses an upswing. As a result, as the sport has grown, the amount above that split number has also increased, thereby growing their share of the revenue. For the forthcoming Concorde, Maffei does not foresee a paradigm shift in the way things operate. However, he made it clear that a similar incentive to expand the business will likely make its way into any new Concorde extension.