Angry Over Proposed Commercial Deal, Mercedes Ponders F1 Exit

Mercedes GP W02 2011 Formula 1 race car

Mercedes GP W02 2011 Formula 1 race car

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The current Formula 1 Concorde Agreement, which defines the terms of competition as well as the disbursement of television revenue and prize money, expires at the end of the 2012 season.

As czar of Formula 1, part of Bernie Ecclestone’s job is negotiating a new Concorde Agreement with the teams in the sport. So far, the new proposed document has been accepted by a number of teams, including Red Bull, McLaren and Ferrari.

Absent from that list are teams like Williams, Caterham, HRT and, most significantly, Mercedes GP. While the other teams exist to race, Mercedes GP can pull out of the sport at any time, with little damage to its parent’s primary business.

According to The Telegraph, Mercedes GP is unhappy about the favoritism displayed to certain teams in the new Concorde Agreement, and is considering a withdrawal from the sport. As written, the new proposed agreement would likely provide bonus money to teams like Red Bull, Ferrari and McLaren, but not Mercedes.

Then there’s the issue of a Formula 1 IPO to consider. Rumor has it that both Ferrari and Red Bull would be given a seat on the board of Formula 1’s holding company if an IPO were to proceed. Once again, Mercedes would be excluded from this offering.

There’s even talk that Mercedes is considering legal action against the sport, claiming restriction of competition and abuse of a dominant position. If this is accurate, it could very well come down to who blinks first, Daimler’s lawyers or Bernie Ecclestone.

In addition to fielding the Mercedes GP team, the company supplies engines to McLaren and Force India, both of which have allegedly signed the proposed Concorde Agreement. Should Mercedes pull out of F1, that leaves both teams in the somewhat delicate position of finding a new engine supplier, and doing so quickly.

As is usually the case with F1, the 2012 season promises to be full of drama, both on track and off.
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