All 10 Formula 1 constructors have signed the new Concorde Agreement, effectively committing them to the sport until the end of the 2025 season.
The new deal, which is an important agreement between the FIA, Liberty Media and the teams on many key aspects of the sport, including how prize money and TV revenue is allocated, will run from 2021 to 2025.
The existing agreement will expire at the end of 2020.
Mclaren, Williams and Ferrari were the first to announce that they had signed up to the new Concorde Agreement.
The other constructors, including Mercedes, who had expressed concerns about the new deal, also signed the agreement shortly after.
The new Concorde Agreement will see a major shakeup in how prize money is distributed across the grid, with the FIA and Liberty Media looking to make F1 more competitive by levelling the playing field’s finances.
The introduction of a $145 million cost cap next season should also make the grid more competitive, though this may not be seen until 2022, when the new technical regulations come into effect.
F1 chairman Chase Carey hailed the signing of the new agreement amid the disruption caused by the COVID-19 pandemic.
“We said earlier in the year that due to the fluid nature of the pandemic, the Concorde Agreement would take additional time to agree and we are pleased that by August we have been able achieve agreement from all 10 teams on the plans for the long-term future of our sport,” he said.
He hailed the new agreement as a step forward towards their objective of creating “an environment that is both financially fairer and closes the gaps between teams on the race track.”
Meanwhile, FIA president Jean Todt said the agreement “assures a stable future for the FIA Formula 1 World Championship” and will allow the sport to enter “an exciting new chapter.”
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