AUGUST 19, 1996
The Concorde crisis creeps onward
The Concorde Agreement is a contract between the F1 teams and the governing body of the sport. It has existed since March 1981 and details every aspect of how the sport should be run, including the regulations, the financial details and all questions relating the TV rights.
There have been three separate Concorde Agreements (1982-86, 1987-1991 and 1992-1996) and the sport has prospered enormously from the stability which the Concorde Agreements have given the sport. This has now become a problem because two of the top teams - Williams and McLaren - are refusing to agree to the terms in the new Concorde Agreement because they feel that Bernie Ecclestone and his associates are taking more than their fair share of revenues while the F1 teams - which actually put on the show - are not being properly rewarded with prize money.
Prize money and TV income in the new Concorde Agreement has been increased - and most teams have accepted the increases - but Williams and McLaren argue that they are losing out in other areas such as the fees demanded to hold races, the income from trackside advertising and from hospitality and merchandising (organized by the Geneva-based AllSport Management).
Williams and McLaren estimate the sport will soon be bringing in annual revenues of up to $500m and that it is not fair that they should be receiving such small sums while Ecclestone, the FIA and AllSport Management are making vast sums.
Last week a letter from the FIA President Max Mosley to the F1 teams was leaked to the British specialist press warning that unless agreement is made there will be trouble which will "almost certainly result in the loss of major sponsors and engine suppliers" to the teams.
This can only be construed as a threat to the teams refusing to sign - it will certainly be interpreted as such. Ecclestone and Mosley can be very persuasive, particularly as they have seem to have total support from the FIA World Motor Sports Council.
The teams must, therefore, be very careful not to put themselves into positions in which the FIA can force change upon them. This has happened on several occasions in recent years, notably when Williams was left out of the entry list for the 1993 World Championship ostensibly because the team had put in its entry late, but in fact because it was refusing to accept a change to the Concorde Agreement in which unanimous agreement would no longer be needed to implement changes. The team was forced to back down.
If the teams decide to ignore the threat, we can expect to see some interesting - but disruptive - political moves against them in the months ahead. They will be hoping that by holding out they can force the 1997-2001 Concorde Agreement to be renegotiated as the deadline of the end of the year approaches.
The irony of all this, for students of F1 history, is that McLaren and Williams now find themselves in the position of the FOCA teams against the FISA (part of the FIA at the time) back in the late 1970s except that on that occasion Ecclestone and Mosley were representing the teams against Jean-Marie Balestre's FISA.
Now the rebels are the establishment...