All 10 teams involved in Formula 1 have signed the Concorde Agreement, which will govern the motorsport from 2021 to 2025. The contract sets out the commercial terms of F1 and has done so since its introduction in 1981.

Ferrari, McLaren and Williams were the first teams to sign the agreement, with all teams progressively following suit. World Champions Mercedes were hesitant to sign following an impasse but those issues have since been resolved.

The purpose of the contract is to mitigate what is widely considered to be an unfair revenue system, as top teams earn disproportionate amounts of prize money while the less well-off teams fight among themselves further down the grid. Teams such as Ferrari, Red Bull and most certainly Mercedes have an unfair advantage which has had an undesirable effect on the fanbase, with many fans claiming boredom.

F1 chairman Chase Carey said that the agreement would “create an environment that is both financially fairer and closes the gaps between teams on the race track”. The president of motorsport’s governing body, the FIA, Jean Todt, said the announcement marked “an exciting new chapter” for the sport.

“The conclusion of the new Concorde Agreement between the FIA, Formula 1 and all 10 of the current teams assures a stable future for the FIA Formula 1 World Championship,” added Mr Todt.