FEBRUARY 24, 1997
The Concorde dispute plods on
THE battle over the 1997-2001 Concorde Agreement remains in the background of Grand Prix racing at the moment. At the moment all the teams competing in the World Championship are to receive prize money, the amount depending on how well they do in the races. They will also all receive payments based on their historical performance in the World Championship.
Only the teams which have signed the 1997-2001 Concorde Agreement are allowed a political voice and get a share of the television incomes. These are Arrows, Benetton, Ferrari, Jordan, Prost, Minardi and Sauber. New boys Stewart and Lola and rebels Williams, McLaren and Tyrrell do not get the same benefits. In exchange for the TV money, however, the signatory teams have given assurances that they will compete in all rounds of the World Championship for the duration of the Agreement, provide a minimum of 20 cars for all events, and agree not to compete in any other open-wheeler racing.
The three rebel teams took their position in late July last year because they felt that they are not getting enough of the income which F1 is now generating from fees to hold races, trackside advertising and corporate hospitality.
The FIA says that these sources of income are run by private enterprises (Bernie Ecclestone's company Formula Promotions & Administration and Paddy McNally's Allsport Management) and that the teams have no right to any of the money as they were not prepared to take the risks in the early days to set up such organizations and cannot therefore now expect to reap the benefits.
The rebel teams argue that they have a right to this money as signatories of the original Concorde Agreement. This is not a very convincing argument as some years ago Ferrari, McLaren, Benetton and Williams tried to form a company called "Newco" and were negotiating the buy the various F1 businesses owned by Ecclestone. The FIA argues that one should not feel the need to buy what one already owns. This is a valid argument.
After the rebel teams withdrew from negotiations last summer the other teams signed a completely different deal with the FIA. The rebels argue that they were never offered the new deal and stand to lose as much as $80m in the next five years as well as being deprived of a political voice in F1.
The signatories and the FIA say that the rebels had excluded themselves from the negotiations and have only themselves to blame. A compromise was recently suggested by the signatory teams but this was rejected by the rebels because it did not offer the same terms as those of the signatories.
The obvious solution is a compromise and it is clear that the FIA would like the matter settled quickly and does not want to be drawn into a long and drawn-out legal battle which will only harm the sport with bad publicity.
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