Ever since 1981, Formula 1 has operated under what is known as the Concorde Agreement - a tripartite agreement between the teams, the FIA and grand prix racing's commercial rights holder.
Each time the document has been signed off (there have been seven more of them up to the current one that came into force in 2021), it has been hailed as a significant moment because of the long-term stability it brings.
Last weekend produced something unique on the Concorde front though, because F1 went public in announcing that one part of the treaty - that involving the commercial terms with all 11 teams - was now agreed for 2026.
This element, which covers a range of matters including prize money, revenue streams, and paddock passes through to the end of 2030, was hailed by F1 as something which "secures the long-term economic strength of the sport".
A statement from F1 added: "Formula 1 has never been in a stronger position and all stakeholders have seen positive benefits and significant growth. We thank all the teams for their engagement during this process to reach the best outcome for the sport."
Announcing things this way, with teams having put pen to paper in Australia on the Friday, was unique because it broke with tradition of waiting until both elements of the Concorde (the governance arrangement with the FIA and the commercial deals with the teams) were in place before telling the world.
Tucked away at the bottom of the statement was: "The 2026 Concorde governance agreement will be finalised in due course."
This was not done without good reason.
A negotiating tactic?
The official line from F1 and the FIA about this is that discussions between them are under way and the hopes are that the governance deal can and will be sorted out imminently to conclude the next Concorde Agreement.
However, it cannot be ignored that exposing the lack of a governance deal being in place - when Formula One Management (FOM) has all the teams on board - comes against the backdrop of some tensions in the paddock between FIA president Mohammed Ben Sulayem and certain stakeholders.
Many in Australia knew exactly what Lewis Hamilton was hinting at when he made reference to F1 CEO Stefano Domenicali committing to a new contract.
"Thank God he's staying, because it's good to have a neutral, good leader at the forefront of the helm," he said. "And yeah, I'll stop there…"
This is also at a time when there is dissent within the FIA about Ben Sulayem's style of leadership, which was highlighted recently by criticisms made public by David Richards, the chair of Motorsport UK.
The robust way Ben Sulayem deals with things has inevitably led to some sticking points in the discussions with F1 over the governance agreement, so announcing things in the manner they were done has to be seen as a ploy to help move talks in the direction F1 wants.
A bigger slice of the pie
It is well known that, as part of his efforts to strengthen the FIA, Ben Sulayem has been seeking a bigger financial cut from F1 for the next Concorde Agreement.
This will come from a combination of a direct financial deal with FOM, plus entry fees from the teams and superlicence fees from the drivers.
And it's just not a simple chase of cash for the sake of it; some of this is accepted by many in F1 as justified, especially for aspects such as spending on improving regulatory aspects.
One example is of the repeated calls from teams for professional stewards. Great in theory but, as Ben Sulayem has often argued, this needs funding from somewhere.
"I say it again and again: stewards do not grow on trees," he said last year. "It takes time to educate them. It takes time to train them. And then you evolve them, so we have a programme.
"I see the point about having them maybe like the Premier League where they [the referees] are paid. But we don't have the money to do that."
An improved financial deal for the FIA from the Concorde Agreement could help with funding on this front and would ultimately be better for F1 as a whole.
This is something that McLaren CEO Zak Brown suggested recently - that teams would be happy to contribute (which would likely be through increased entry fees) if it helped make things more professional.
But there are some other aspects covered by the governance agreement where there may not be complete alignment between the teams, the FIA and FOM, such as the rulemaking process.
Ben Sulayem has talked of changing the composition of the FIA's World Motor Sport Council, but there have also been hints of a new structure to the F1 Commission - the body that signs off rules and is currently made up of F1, the FIA and the teams.
One theory about why F1 went early in announcing the commercial deal was that it weakened the FIA's hand in trying to hold out and delay getting its bit done in the hope that it would force FOM to roll over.
Were the teams not on board, then it would leave FOM in a more exposed position than it is now - where all 11 competitors are fully signed up.
This also comes against the backdrop of F1 CEO Stefano Domenicali having just committed to his new five-year contract, so there is stability in play.
If the governance aspects are not signed off before the start of 2026, then it will simply only affect the FIA. If no new deal is forthcoming, then in theory the previous Concorde arrangements will roll over - and that means no extra revenue for the FIA.
So, in announcing the teams' position, FOM has put the pressure on the other camp to get things moving.
Ben Sulayem is not expected to attend an F1 race until the Bahrain Grand Prix next month, so that weekend could prove critical in how quickly a deal is put in place.
The commercial deal
While the governance matter remains up in the air, one thing that is settled is the commercial rights income for teams - even if the specifics of this are secret for now.
The Race recently published some estimated figures of F1's current prize money structure.
This features three core elements: an approximate 5% historic payment for Ferrari (which has an escalator if F1's earnings reach a certain point), a bonus payment for previous constructors' championship success, and then a split based on finishing positions of the previous season which starts at around 14% for the winner and rolls down to 6% for the 10th-best team.
While details of the new arrangements for 2026 have not been made public, it is understood that there is no radical change in how the prize money payments will be split up - although there are some interesting shifts.
One of the key ones is that F1 teams will now get a guaranteed greater share of the overall commercial income.
Under the previous Concorde Agreement, teams earned a baseline of 60% of the income up to a certain overall revenue point (believed to be around $1.6billion), but beyond that earnings were split 50/50 with FOM, and then F1 took an even greater share at levels even higher up.
This meant that for 2024, from F1's profit of $2.34b (revenue of £3.4b and costs of $1.06b), the teams' payments of $1.26b equated to around 54%.
With F1's revenues projected to grow off the back of increased race hosting fees and broadcasting deals, the shift to guarantee teams 60% should not impact F1's profits much and has been important in getting teams to commit for the long-term.
Ferrari's historic bonus remains, but is now understood to be capped at 5%, while the rewards for previous constructors' championship success is also retained.
In terms of the split of money for constructors' championship positions, the inclusion of Cadillac as the 11th team inevitably means that the other 10 teams will get a smaller share of that pot.
While firm details about the exact percentage split have not yet emerged, it is suggested there is a more even spread of earnings.
Although we do not know the exact percentage splits, a logical estimate is a glidepath that ranges from 13.3% for the winner down to 4.9% for the 11th team.
This would result in the bottom teams losing less than $4million per season - although the top squads would lose more.
However, these theoretical losses will be offset by the greater overall profit share (the guaranteed 60% of earnings), plus a $450m dilution fee that Cadillac is to pay and is split among all other competitors. This will cover any losses for quite a period of time.
For the future, it is suggested that the dilution fee for a 12th team could be as high as $600m.
Cadillac joins the club
The other interesting aspect of the new Concorde Agreement is that it features 11 teams rather than just the current 10, with Cadillac joining the grid as F1's newest squad in 2026.
Although it was a long (and far from easy) journey for Cadillac to finally secure its entry only recently, now that it is here it is being embraced as part of the club - which is why its own signature on the commercial deal was important.
Cadillac CEO Dan Towriss and its team principal Graeme Lowdon were both in Australia last weekend to sign their part of the Concorde Agreement, as they also spent time speaking to other squads about their ambitions.
Talking exclusively to The Race, Towriss welcomed the chance to bring future rivals up to speed with Cadillac's plans.
"Spending time in Melbourne allowed us to connect with other teams and share our long-term vision and deep commitment to the sport," he said.
"We have already made significant investments in new facilities in both the US and the UK, and our visit to Melbourne offered us a chance to highlight the unique value we aim to bring when we join the grid in 2026."
Lowdon, who has been an F1 regular as a former team boss with Manor/Marussia, manager to Guanyu Zhou, and long-time advisor for the Cadillac squad as it morphed from Andretti, said that being in the paddock for the first time since its entry was finalised was a significant moment.
"This visit to Melbourne allowed us to spend some time with people from other teams and give them a flavour of our activities," he said.
"I think that people can now see from the depth of the long-term commitment from the team, and its backers, that we can bring something that really does complement the teams that are currently competing."
