'No need' for Concorde Agreement - Ecclestone
- Bernie Ecclestone
Bernie Ecclestone has claimed Formula One can get by without the contract which has been at the heart of the sport for over 30 years and commits all the teams to race.
The contract, known as the Concorde Agreement, is signed by the teams, motor racing's governing body the Fédération Internationale de l'Automobile (FIA) and the F1 Group which is run by Ecclestone. In addition to committing the teams to race, it determines how F1 is run from the location of races to the amount of prize money which is paid out. The contract has been in place since 1981 but it expired at the end of 2012.
Ecclestone has spent the past year trying to negotiate a new contract, to run until the end of 2020, but it has still not been signed.
"We don't need the Concorde Agreement signed," he said. "It doesn't matter to me whether we have got the Concorde Agreement or not."
Time is running out to get it signed by the start of the F1 season in March but Ecclestone is confident that the racing will not be disrupted if the contract is not in place. He says he has agreed financial terms with each of the 11 teams in separate contracts which commit them to racing in F1 for the next eight years. He adds that the roadblock to signing the Concorde Agreement is now coming from the FIA which sets F1's regulations.
"The Concorde Agreement is really made up of two sections. We have already dealt with the financial section with the teams. It is all done so it is a case of the regulations which change all the time. It's a case really of how you change the regulations."
The Concorde Agreement validates F1's regulations so the teams have less visibility of technical changes if there is no contract in place. Next year the V8 engines currently used in F1 are due to be replaced with 1.6 litre, turbocharged V6s and although the manufacturer-backed teams have agreed to this, other outfits are unhappy as it is expected to treble the price of the motors from the current cost of $13m per year.
"What affects the teams more than anything is the technical regulations. It is the technical regulations which could put them out of business," Ecclestone added.
Toto Wolff, Mercedes' new motorsport director, agrees that a key benefit the Concorde brings is regulatory stability.
"All the teams have bilateral agreements which give comfort in terms of the commercial side of things but a global Concorde would bring stability to the sport. It would mean that Bernie and the FIA had reached agreement over a couple of points which are not only commercial but are also from the regulatory side.
"Such a broad agreement would be good but is it our business? Probably not. It is up to Bernie and the FIA to sort it out. Bernie is the rights holder so it is up to him and the FIA to find a solution. We are pretty much on the co-pilot's seat.
"I don't think there are big discrepancies. Like all agreements, it is coming to a point where the biggest controversies seem to be out of the way and now it is about making it work and working on the details. I trust they are trying to do the best for the sport and that is what we all hope for."
But Eric Boullier, team principal of Lotus F1, says F1 teams do need the security the Concorde Agreement provides: "We have agreement with Bernie but we are still lacking some protection over the future of the sport. If you are building a business over a period of time you need some stability or some guarantee. We have part of it thanks to the Bernie agreement. As a private organisation we obviously would like to see more security over the future. The regulations are obviously our main costs so it is important to have visibility on that and be able to control our costs."
The lack of a Concorde Agreement does not affect the F1 Group's rights to run F1 since they are granted through a contract it has with the FIA which runs until the end of 2110. Ecclestone describes it as being "basically a long-term Concorde."
However, one leading expert says that until the Concorde Agreement itself is signed the brakes will stay on the plan to float F1 on the Singapore stock exchange. Last year F1's largest shareholder, the private equity firm CVC, announced that it planned to make shares in the sport available to the public in a move which was expected to value it at $10bn. The plan was put on hold in May last year due to the economic downturn but it is expected to rev up again over the next year.
Andrew Craig, former boss of F1's US rival IndyCar says that "investors will want to know what 'product' they are buying so the new Concorde Agreement with the teams will need to be finalised before going to the stock market." Craig is uniquely placed to comment as he is the only person who has ever run a floated motorsport series. In 1998 IndyCar, then known as Championship Auto Racing Teams, floated on the New York Stock Exchange. The Concorde Agreement may need to be signed before F1 can follow suit.
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