Red Bull Racing joined Ferrari and agreed to an extension of the Concorde Agreement through 2012 today. Amongst other things the agreement governs how much of the revenue from Formula 1 is distributed to the teams by Bernie Ecclestone and his Formula One Administration company.
Originally all of the F1 teams had refused to sign an extension and had formed a company to establish a competing Grand Prix series after the current agreement expires following the 2007 season. At issue is the fact that all of the teams share around 25% of the pot while Ecclestone has become a multi-billionaire in the 25 years that he has been running F1.
In January Ferrari came to terms with Ecclestone and became the first — and until now the only — team to agree to an extension of the agreement. Under the terms of the current agreement, Ferrari receives more than the other teams and so this was not entirely unexpected.
Red Bull Racing, who only entered F1 at the start of this year when they purchased and renamed the Jaguar F1 team, will be using Ferrari engines next season and so their defection was also fairly predictable.
It will be interesting to see who jumps ship next. The remaining five manufacturers behind the proposed breakaway series — BMW, DaimlerChrysler, Honda, Renault and Toyota — are all major corporations that have the funds to play hardball with Ecclestone but the deal must be looking sweeter by the day to some of the smaller teams.