From the origin to the “Concorde agreement”: why FIA and Formula 1 are peculiar.

Abstract

Starting from an Historical analysis and proceeding through the most important phases of the evolution of Fédération Internationale de l’Automobile, this article is going to underline the peculiar features that make this International Sport Federation differs from the majority of the others.

The Origin

From its birth in 1904, under the name of “Association Internationale des Automobile Clubs Reconnus”[1], the FIA has made a plethora of metamorphosis, that have led this organization to differ a lot from the majority of the International Sporting Federation. Key points of this first phase can be founded in four different moments:

-In 1922, with the born of the “Commission sportive internationale”[2], a body created with the solely intent of ruling and dealing with car races. It has got a progressive relevant role until the start of WWII, that blocked any kind of racing activities.

-In 1947 when, after a reorganization, there was a change in the name of the Federation that went from AIACR to the actual one of Fédération Internationale de l’Automobile. After this, but still in the same year, there was the creation of the Formula A[3], a category born with the purpose of creating an international competition that gathered the best car manufacturers. Despite that, at the beginning, that was only a series of autonomous and independent events.

-In 1950, when the FIA organized the first World Drivers Championship. This phase was important because it was the first time in which all the results were merged to create a final standing. The rules that were created for this competition were called Formula One. It is important to always remember that the evolution of this International Sport Federation in strictly linked to the evolution of F1 that was, and still is, the most relevant championship, either on the prestige than the economical aspect.

-Another important year, if not the most important for the evolution of this sport, was the 1968, in which there was the liberalisation of sponsorships, allowed by FIA after the retirement of national sponsorships. This fact created the starting of the prevarication of the economical side on the sport one.

The great crisis and the “Concorde Agreement”

During those years there was one of the tensest moments in all FIA history. This was correlated to a political fight between CSI and the new-born Formula One Constructors' Association[4]. An association born from the idea of Bernie Ecclestone[5] to reunite all English teams under a single organization, with the aim of protect their interest against the ones of the more prestigious constructors like Ferrari and Renault. At the time CSI was in a difficult and tense situation, caused either by the great increase in revenues, either by the political fights linked to the drafting of the regulations, in years in which the mechanical evolutions led to great changes and, consequently, to great advantages in terms of performance.

Those years were also inextricably associated to the rise of one of the most famous presidents in the FIA’s history, Jean-Marie Balestre, a man of cynical but effective pragmatism, with a great attitude in political mediation[6]. After being appointed President of the Fédération Française de Sport Automobile in 1973, he reached also, in a small amount of time, the position of President of CSI, thanks to a proposal with the aim of making CSI “great again”, considering the great amount of power that FOCA has gained from CSI after his creation. FOCA became so relevant to make autonomous deals not only for the English teams, but it was also able to organize some races and to negotiate directly with the television channels for the assignment of the broadcast rights. The power of FOCA grown at the point to undermine the regulatory power of the CSI, which found itself accepting technical demands "politically imposed" by FOCA, although from the formal point of view it had no capability on the matter.

The most relevant example of this difficult situation, happened in the 1980, when, due to the impossibility to find an arrangement on the Technical Regulations, FOCA created a new Federation to overcome FIA and in the 1981 they even start a new and autonomous Championship, with the first race that took place in Kalayami. A race that obviously the Federation did not recognize valid for the Formula One Championship.

In this moment of difficulty, in which an international authority had lost a large part of its power to a private organisation, the only possibility was to try to resolve this crisis.

This attempt happened with the first draft of the so called “Concorde Agreement”[7], a commercial agreement that rules the economic aspects of the teams involved in the Formula One World Championship. The terms of this contract were, and are yet, mostly reserved. One of the few aspects that is known, is linked to the fact the all the participants must attend every race of the Championship to grant a certain level of show to the buyers of the broadcast rights.

This decision will become fundamental for the evolution of the sport. The Federation took back his drafting power but at the cost of losing, in favour of FOCA, the possibility to expand ed evolve the F1 business. This led to the creation of the Formula One Management, a society with the aim of expand and control the economic revenues.

 

Why FIA is peculiar

Due to this events that represents his Historical background, FIA is a really peculiar kind of International Sport Federation. It is undeniable that in this organization there is a strong link between the sporting and economic factor, with the last one getting more and more stronger. The balance of power among FIA and FOM is still decided through Concorde agreements, just like the 1995’s one that gave the commercial rights of F1 to FOM for 15 years or the 2000’s one, in which the FOM granted for itself, in exchange of an important payment, the commercial rights until 2110. This situation puts FIA in a different orbit from the standard one that revolves around the International Olympic Committee and this situation, over the years, gives the possibility to FIA to develop truly singular solutions, which could provide interesting insights into various areas of law, and more.

 

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[1] From now on AIACR.

[2] From now on CSI.

[3] The use of the word Formula derives from the fact that the first regulations were poor of specification. Usually there was only a single mathematical Formula that the teams must respect.

[4] From now on FOCA.

[5] Bernie Ecclestone had been a former driver and at that time he become the Team Principal of an English Formula One team called Brabham.

[6] P. Michaud, Jean-Marie Balestre: Sortie De Route, L’Humanité, 1996. Available on:

https://www.humanite.fr/node/143528

[7] The name Concorde Agreement derives from the name of the place where this agreement was signed on 19 January 1981, that is Place de la Concorde in Paris, which is also where the FIA’s headquarter is located.