The Concorde Agreement is a crucial legal document that governs the relationship between the teams and the Formula One Group, the commercial rights holder of the sport. It determines the commercial terms and conditions, the distribution of revenues, and the sporting rules for the teams participating in Formula One races.

The agreement is named after the first venue where it was signed, the Hotel Concorde La Fayette in Paris in 1981. It has been revised multiple times over the years to reflect the evolving nature of the sport and the business.

The latest version of the agreement, Concorde Agreement 2021, was signed in August 2020, and it will be in effect from 2021 to 2025. The new agreement marks a significant shift in the governance structure of the sport, with the teams playing a more integral role in decision-making.

One of the key changes with the new agreement is the introduction of a cost cap, which limits the amount of money each team can spend on their operations. The cost cap is designed to promote financial sustainability among the teams and create a more level playing field.

The Concorde Agreement also includes provisions for revenue distribution, detailing how the commercial rights holder will distribute the revenue generated from broadcasting and sponsorship among the teams. The distribution of revenue is based on a complex formula that considers multiple factors such as the team`s performance, historical results, and the number of years in the sport.

In addition to financial regulations, the Concorde Agreement also sets out the sporting rules for the teams. This includes technical regulations, such as the specifications for the cars and engines, as well as sporting regulations, such as the rules for overtaking, penalties, and safety.

In conclusion, the Concorde Agreement is an essential legal document that governs the relationship between the teams and the commercial rights holder in Formula One. It regulates commercial terms and conditions, revenue distribution, and the sporting rules, and has a significant impact on the sustainability and competitiveness of the teams participating in the sport.