The current F1 Concorde Agreement is the commercial contract under which the teams agree on the prize structure and revenue division.
Ferrari is the most recognisable and most valuable team in Formula One.
Ferrari currently benefits from extra income due to its historical significance to F1.
This additional payment is notable; it equals 5% of the underlying profits from the FIA.
In 2023, the FIA profits were more than $3 billion, and F1 teams received a 45% share.
Ferrari also receives a share of the $100 million Constructors’ Championship Bonus.
As one of the top 3 teams, Ferrari gets a minimum of $30 million from this fund.
Combined, these two payments mean Ferrari gets a significant wedge in prize money from F1 before a single race begins, far more than any other team.
Understandably, these additional payments are controversial; they offend the general principle of equitable payment based on performance.
Critics say these payments create an uneven playing field.
Other teams commented that the overall prize fund was therefore reduced. Potentially de-motivating them.
On the other hand, Ferrari is the oldest and most historic team in Formula One.
The payments recognise their heritage and importance to the F1 brand value.
Ferrari’s involvement is pivotal to the sport’s marketability.
In addition, Ferrari has threatened to leave the circus if the payments are removed.
In theory, any team that achieves a specific longevity would also qualify for a heritage payment.
Although the legacy payment is significant, it does not directly increase the amount that can be spent on the imposed cost cap.
Despite not directly increasing Ferrari’s cost cap allowance, the profitable legacy payments provide them a unique fiscal advantage that other teams lack.
‘Ferrari’s legacy payments: making nostalgia the most lucrative lap on the circuit’
✺ Comments and views regarding the Legacy Payments are welcome.
