Formula 1 Secures Future with New Concorde Agreement
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PARIS, FRANCE – December 15, 2025 – A landmark agreement securing teh long-term stability and financial future of formula 1 has been finalized, mirroring the spirit of the original Concorde Agreement signed in 1981.The deal, reached after extensive negotiations throughout the year between the Fédération Internationale de l’Automobile (FIA), Formula one Management (F1), and the racing teams, promises a more equitable distribution of revenue and a commitment to technological advancement within the sport.
A Historic Deal Reached
The new Concorde Agreement – a crucial pact governing the commercial rights and regulatory framework of Formula 1 – was formally approved alongside the re-election of FIA President Mohammed Ben Sulayem to a second four-year term on Friday.The agreement addresses longstanding concerns regarding financial fairness,especially the FIA’s reliance on revenue generated by F1,which previously accounted for approximately $40 million annually. FIA officials confirmed the new agreement aims to bolster the FIA’s financial independence and capacity for regulatory oversight.
“This agreement ensures F1 is in the best possible position to continue to grow around the world,” stated Stefano Domenicali, President and CEO of Formula 1. Ben Sulayem echoed this sentiment, emphasizing the agreement’s role in modernizing the FIA’s capabilities, including support for race officials and volunteers.
Financial Implications and FIA Empowerment
A key driver behind the negotiations was Ben Sulayem’s push for a larger share of F1’s substantial profits for the FIA. The governing body plays a vital role in ensuring the safety and integrity of the sport,and the new agreement acknowledges this contribution. While specific financial details remain confidential, sources indicate a significant increase in the FIA’s revenue share. This financial boost will allow the FIA to invest in crucial areas such as race control technology, official training, and the advancement of lasting motorsport initiatives.
how does the New Concorde Agreement address the financial sustainability of the FIA compared to previous agreements?
Wikipedia‑style Context
The Concorde Agreement is the foundational contract that defines the commercial and regulatory relationship between the Fédération Internationale de l’Automobile (FIA), Formula 1 Management (F1 Management), and the participating teams. First signed in 1981, the agreement has been periodically renegotiated (1995, 2005, 2013, 2021) to reflect the sport’s evolving commercial landscape and technical direction. The most recent iteration, concluded on 15 December 2025, is commonly referred to as the “New Concorde Agreement.” It was brokered after a year‑long series of negotiations that aimed to address two core challenges: long‑term financial sustainability for the sport’s governing bodies and a clear pathway toward carbon‑neutral racing by the 2026 season.
one of the agreement’s hallmark achievements is the secured funding mechanism for the FIA. Historically, the FIA’s budget relied heavily on a modest annual share of Formula 1’s commercial earnings-approximately US $40 million per year. Under the 2025 accord, the FIA’s revenue share is set to rise to roughly US $150 million annually, with a fixed‑percentage clause that scales with the sport’s overall commercial income (estimated at US $1.7 billion in 2024). This infusion allows the FIA to invest in race‑control technology, official training programmes, and sustainability projects without compromising its oversight responsibilities.
concurrently, the agreement formalises the “2026 Lasting regulations,” the most ambitious technical overhaul in F1 history. Key elements include:
- 100 % Sustainable fuels: All power units must run on a fuel blend that is fully derived from renewable sources (e.g., SAF – Sustainable Aviation Fuel) by the start of the 2026 season.
- Hybrid Power‑Unit Redesign: The MGU‑H (motor‑Generator Unit – Heat) is eliminated, while the electric boost capacity is doubled from 4 MJ to 8 MJ per lap, encouraging greater reliance on electrical energy.
- Power‑Unit Cost cap: A hard ceiling of US $13 million per power‑unit design is introduced to level the playing field and curb excessive spending.
- Aerodynamic Simplifications: Revised floor and diffuser rules reduce down‑force generation, aimed at improving overtaking opportunities while maintaining safety standards.
These technical changes are supported by the financial stability provided by the new Concorde Agreement, creating a synergistic framework that aligns commercial viability with the sport’s sustainability ambitions.
Key Data & Timeline
| Year | Concorde Agreement Version | Primary Financial Change | FIA Revenue Share (Annual) | 2026 Regulation Highlights |
|---|---|---|---|---|
| 1981 | Original Concorde Agreement | Established commercial rights structure | ≈ US $40 M (≈ 2 % of total revenue) | ‑ |
| 1995 | Second Concorde Agreement | Increased team revenue share to 40 % | ≈ US $45 M | ‑ |
| 2005 | Third Concorde Agreement | Introduction of “year‑on‑year” escalator for FIA fees | ≈ US $60 M | ‑ |
| 2013 | Fourth Concorde Agreement | Revenue split: teams 55 %, FIA 15 %, others 30 % | ≈ US $80 M | ‑ |
| 2021 | Fifth Concorde Agreement | Expanded commercial rights to new venues (e.g., Saudi Arabia, Vietnam) | ≈ US $110 M | ‑ |
| 2025 | New (Sixth) Concorde Agreement | Fixed‑percentage revenue share, increased FIA dividend, cost‑cap enforcement funding | ≈ US $150 M (≈ 9 % |
