Of Course Mercedes Won't Agree To The New Redistribution Of The F1 Wealth

Illustration for article titled Of Course Mercedes Wont Agree To The New Redistribution Of The F1 Wealth
Photo: Andrew Boyers (Getty Images)

Every few years, The Powers That Be in Formula One sit down to redraw the rules of competition and the prize money distribution. Known as the Concorde Agreement, this little document has caused a fuss ever since the first agreement was signed in 1981. And with the newest iteration coming up in 2021, it’s no surprise that some of the top teams are pushing back against the promise of a redistribution of finances.

Liberty Media, who owns F1, has been pushing hard to make this very hierarchal sport just a little more equitable. By implementing both cost caps and a more balanced distribution of prize funds at the end of the year, Liberty Media has been hoping to afford struggling teams with the chance to succeed while also keeping racing giants like Mercedes in check.

But Mercedes boss Toto Wolff is complaining that the agreement is designed specifically to hurt his team. From Racer:

We from Mercedes made it very clear that we are happy with a more equitable split of the prize fund, the way success is rewarded and possible for everybody we agreed to.

We are, I would say, the biggest victim in terms of prize fund loss in all of that.


But where does that come from? It seems like it’s counterintuitive to state that you want both equitable financial distribution while still claiming that you’re being directly targeted. Woolf continues:

Ferrari has maintained an advantageous position, for Red Bull it obviously balances out with Toro Rosso, so it’s us that are hurt the most.

I feel that Mercedes has contributed to the sport over the last years. Apart from being competitive on track we have the driver that has clearly the most global appeal, and we feel that while being in those negotiations we weren’t treated in the way we should have been. Therefore there is a bunch of open topics for us that are legal, commercial and sporting, and in our point of view I don’t feel ready to sign a Concorde Agreement

According to Wolff, many other teams have massive problems with the nature of the new Concorde Agreement but have opted against saying anything publicly.

So, what is Wolff talking about, then?

The Concorde Agreement is confidential, so us laypeople will probably never know exactly what it contains. Ferrari, McLaren, and Williams have all stated that they’re willing to sign it, though, which could possibly mean that legacy teams are still financially rewarded for their longevity. But that’s just speculation.


Mercedes aren’t awarded the most prize money as it stands, but it sounds like what Wolff is critiquing is the fact that Mercedes isn’t actually given a bonus for its performance in the sport the way other teams have in the past (see: Ferrari), along with the fact that legacy teams are still awarded plenty of money just for showing up which is crucial funding that Mercedes doesn’t get. (Although, if we’re honest, it’s not exactly like Ferrari seem to be making the most out of the extra money.)

Ultimately, the Concorde Agreement is a matter of push-and-pull. If F1 pushes this contract through with an overwhelming number of signatures from teams, which currently sounds likely, those that don’t sign will not compete in the 2021 season. If a majority of teams disagree, there’s a chance the agreement will be sent back to the drawing board.


In some ways, Wolff is talking a lot of sense. It doesn’t make sense for F1 to implement a budget cap while still awarding inordinate sums of money to teams who haven’t earned it via their direct competition the previous season. On the other hand, legacy teams like Ferrari and Williams desperately every cent they can get just to keep their heads above water. The legacy funding in tandem with capped spending could very well level out the competitive playing field, only to be renegotiated and omitted in the next Concorde Agreement.

The final version of the Concorde Agreement must be signed by August 12, 2020. A Formula One spokesperson told RACER that the series would not be negotiating any further changes to the document while Red Bull Racing team boss Christian Horner remains confident that all the teams will come together to sign in the end.


“You have to look at the bigger picture and look at it as a partnership,” Horner said. “We need Liberty to bring as much revenue into the sport and interest and coverage, that ultimately the teams and all participants will benefit from.

“You have to take a bit of a holistic view on these things, you’re never going to get everything you want.”


Wise advice indeed, but not the kind of thing you’re likely to actually see happen in the racing world.

Teams have a mere four more days to sign the contract. Whether or not Mercedes finally caves remains to be seen, but a further delayed Concorde Agreement wouldn’t be all that surprising in this year of uncertainty.


[Update August 8, 2020 4:46 PM: Toto Wolff’s quote was expanded and dissected in greater depth. The headline has been changed accordingly.]

Weekends at Jalopnik. Managing editor at A Girl's Guide to Cars. Lead IndyCar writer and assistant editor at Frontstretch. Novelist. Motorsport fanatic.

Share This Story

Get our newsletter


Half-track El Camino

I honestly don’t understand why anyone would watch a sport where some teams are given such an obvious built-in advantage over others. I know that plenty of professional sports have a few teams that benefit from better funding than the rest, but F1 is the only one I know of where it’s baked into the actual rules. It’s like if in MLB the rules were written to allow the Red Sox four strikes instead of three.

If the sport isn’t even making a pretense of fair competition, why would I care about watching it? What’s the fun of watching a game when you know it’s rigged from the start?