DECEMBER 7, 2005

Williams signs up to Concorde Agreement!

Williams F1 has agreed to sign up for an extension of the Concorde Agreement from 2008-2012. The news will be announced later today.

Williams F1 has agreed to sign up for an extension of the Concorde Agreement from 2008-2012. The news will be announced later today. The announcement will, inevitably, be a major blow to the ambitions of the Grand Prix Manufacturers Association but in some ways it will also be a victory for the manufacturers as, by standing up to Formula One Management, they have achieved what they set out to achieve and won a better deal for the teams.

The key point is that there are today only four important F1 brands which the fans and TV companies will follow: Ferrari, Williams, McLaren and Monaco. With Williams agreeing to a new deal, Formula One Management (and its allies at the FIA and Ferrari) will gain a dominant position and while the car manufacturers are a powerful lobby, this really torpedoes any chance that a rival series will get off the ground in 2008. If Formula One can deliver Ferrari, Williams and Monaco that is three out of four of the big brands associated with the sport.

It remains to be seen whether Williams signing up with FOM is going to break the log jam but it is hard to see how a rival series is going to happen, given that at least two of the five manufacturers involved in the GPMA are keen for compromise and one is unlikely to be in the sport by 2008. Two hardliners are not going to create a World Championship. The deal on offer, believed to be 60% of all revenues generated in F1, is a decent one. There may still be questions of governance and decision-making processes but the mood is clearly in favour of getting on with business. Stability is now more important than anything else. Clearly, it will tough for the hardliners to back down but it is in the best interests of the sport that this happens. The manufacturers may be constrained from signing up to a deal with FOM until September 2006 by an agreement they signed three months ago but that does not mean that they cannot indicate that a new series is not going to happen. The opportunity for the manufacturers to launch their own championship - which involved an investment of $300m - has now passed.

The important question is why Williams has decided to sign up and our sources indicate that the most key issue for the management at Grove was that the latest offer from FOM is very reasonable; that the FIA has shown signs of being willing to compromise and that continued talk of a second series is deeply disruptive. Our sources say that the deal offered to Williams is not going to be any different to that on offer for other teams - or, to put it another way, Williams has not been bribed with a big pay-off. We also hear that, wisely, FOM is offering the same deal to all the teams, whether they sign now or whether they sign in nine months from now. The most important thing is that the sport is united and can move forward.

All in all, we believe that this is a huge step forward for Formula 1 if everyone sticks to what has been agreed.