MAY 25, 1998
The Concorde Agreement
AFTER two years of negotiation the Formula 1 teams and Bernie Ecclestone have finally managed to settle all their differences and have agreed a new Concorde Agreement which will run for the next 10 years. There have been around 35 different drafts of the Concorde Agreement but the one agreed appears to be perfect for everyone except for Sauber. According to team bosses it addresses all the outstanding problems and guarantees the long-term stability of the sport. It is a big step forward for Bernie Ecclestone as he plans to float Formula 1 Holdings and we believe that part of the deal is Ecclestone's pledge that he will float his company. The major problem now is getting clearance for a deal from the European Commission.
The new Concorde Agreement was signed on Friday evening at the Automobile Club de Monaco in the presence of His Serene Highness Prince Albert of Monaco. Ecclestone, Ron Dennis (McLaren), Frank Williams, David Richards (Benetton), Eddie Jordan (Jordan), Alain Prost (Prost), Tom Walkinshaw (Arrows), Jackie Stewart (Stewart), Craig Pollock (Tyrrell/British American Racing) and Gabriele Rumi (Minardi) all signed the agreement on Friday, and on Saturday morning the signatures of Max Mosley (FIA) and Luca di Montezemolo (Ferrari) were added.
According to Ecclestone and Sauber, the Swiss team did not sign because of a problem with paperwork. This is not a very credible explanation as Sauber has been refusing to sign for several weeks and any necessary paperwork could easily have been produced in this period.
The recent weeks have seen a lot of negotiation over the terms of the new deal and it is possible that Sauber does not agree with some of the clauses. We hear that teams have been asked to cancel the 1997-2001 Concorde Agreement but that some have asked for extra money to agree to that. We believe that Ferrari is going to get extra money and that this has upset a lot of team owners although most have had to accept political reality and sign.
The attitude of Sauber is incomprehensible and as a result there have been a lot of rumors and speculation in the paddock. One or two of the stories circulating appear to have been deliberately planted to stir up trouble.
Peter Sauber has always been the most sensible and least controversial of all the team bosses and he will not be happy that Ferrari gets extra money. One story we did hear in Monaco was that the extra cash going to Ferrari is actually going to come out of the money which had been destined for some of the other teams.
Others stories suggest that Sauber has asked for an extra $5m a year in exchange for his signature but that this proposal was rejected by Ecclestone.
There was another, more complicated, theory suggesting that it is not Peter Sauber who is causing the trouble but his commercial director Fritz Kaiser, who owns 10% of the shares in Sauber's holding company and was responsible for doing the important sponsorship deals with Red Bull and with Petronas.
There is no doubt that Kaiser is ambitious and there were suggestions in the paddock that he is in the process of building up an alliance of teams against Ecclestone with the aim of stopping the flotation and forcing Ecclestone to give the teams a better deal. Kaiser did surprise team owners recently by circulating a confidential document about the problems between Bernie Ecclestone and the Competition Directorate of the European Commission.
Taking on Ecclestone would be a brave move for anyone given the fact that 10 of the 11 teams have signed the Concorde Agreement. Bernie's failure to get Sauber's signature will probably not have much of an effect on the world of investment banking as Sauber is really not a very important team. It could be, therefore, that Sauber's apparently nonsensical rebellion is nothing of the sort and that Sauber is working with Ecclestone to keep the Concorde Agreement question open until the problems with the European Commission have been sorted out... If the Commission forces change on Ecclestone he does not really want to be bound by agreements made before he knows what will happen.
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