Source: EURLEX
Language: en
Format: md

27 . 11 . 97 | EN Official Journal of the European Communities C 361 / 7

Notification of agreements relating to the FIA Formula One World Championship

( Case No IV / 36.638 — FIA / FOA )

( 97 / C 361 / 05 )

( Text with EEA relevance )

1 . On 5 September 1997, pursuant to Article 4 of a number of Broadcasting Agreements and a number of
Council Regulation No 17 (') the Federation Inter ­ Promoters Contracts .
nationale de l'Automobile ( the FIA ) and Formula One
Administration Ltd ( FOA ) submitted to the Commission
a number of agreements for the organization and
operation of the FIA Formula One World Championship
( the Championship ) and for the exploitation of television 6 . The Concorde Agreement, agreed on 5 September
rights . The parties wish to establish that the 1996, runs for five years from 1 January 1997 . The
arrangements under which FOA acquires the broad ­ agreement is between the FIA, which organizes the
casting rights for the Championship and markets them as Championship, and the signatory teams . The agreement
a single event are compatible with Article 85 ( 1 ) or merit sets out the organization and running of the Cham ­
exemption within the meaning of Article 85 ( 3 ). and the structure for its control

2 . The FIA is an international federation of 149

national automobile clubs, associations, touring clubs
and national federations for motoring and motor sport .
Through its sports division and its affiliated national
sporting authorities ( ASN ), the FIA regards itself as the
world governing body for 4-wheel motor sport,
including Formula One . FOA ( formerly called FOCA
Administration Ltd ) is a limited company, which is
engaged in the promotion of Formula One motor sport .

3 . The notifying parties are the FIA and FOA . Also
relevant to the notified agreements are the parties to the
various agreements — the teams which participate in the

Championship, the promoters, organizers, and the
broadcasters of the Championship . The teams fall into
two categories, the signatory teams and the
non-signatory teams . The signatory teams are : Ferrari
SpA, Prost Grand Prix SA, Jordan Grand Prix Limited,
PP Sauber AG, Benetton Formula Limited, Minardi
Team SpA and Arrows Grand Prix International
Limited . The non-signatory teams are : Williams Grand
Prix Engineering Limited, McLaren International
Limited, Tyrrell Racing Organization Limited and
Stewart Grand Prix Limited .

4 . The Championship comprises 16 or 17 events held
each year in different countries around the world,
including at present seven Member States of the
European Union . The Championship is broadcast in over
200 countries worldwide .

5 . The notified agreements consist of the following :
the Concorde Agreement, the Formula One Agreement,

o OJ 13, 21 . 12 . 1962, p . 204 / 62 .

6 . The Concorde Agreement, agreed on 5 September
1996, runs for five years from 1 January 1997 . The
agreement is between the FIA, which organizes the
Championship, and the signatory teams . The agreement
sets out the organization and running of the Cham ­
pionship and the voting structure for its control, by
reference to other agreements, contracts, FIA rules,
regulations and ruling bodies . As a condition of their
participation in the Championship, the signatory teams
assign to the FIA on an exclusive basis any media rights
they may have in relation to the Championship events
and recognize that the FIA has the right to appoint a
commercial rights holder for the exploitation of those
rights, and that FOCA Administration Limited ( now
called FOA ) is that entity . The FIA arranges for FOA to
make agreements, the terms of which are annexed to the
Concorde Agreement, between FOA and each Team,
whether signatory of non-signatory . The Concorde
Agreement sets out the allocation of the prize fund and
television payment to be paid by FOA each year . Of the
total amount payable in any year 50 % is to be divided
equally among the signatory teams . The remaining 50 %
is divided among all competing teams as to 25 %
according to their performance in the Championship for
the preceding year, and as the remaining 25 %,
according to their performance in all relevant years since
the Championship started in 1950 . Non signatory teams
may become signatory teams only with the consent of all
signatory teams . FOA as the commercial rights holder
enters into agreements with promoters for each event .
FOA proposes to the FIA the calendar for the events in
the Championship and the FIA is then responsible for
finally determining the calendar .

7 . The Formula One Agreement is between the FIA
and FOCA Administration Limited ( now called FOA ). It
is dated 19 December 1995, took full effect on 1 January

1997 and is effective until 2010 . FOA acquires from the
FIA for 14 years all commercial rights to the Cham ­
pionship which the FIA has, including the right to exploit
the sound and moving picture agrees to pay fees and
other amounts to the FIA and all teams to reflect their
contribution to the Championship . It confirms that FOA
is authorized to enter into contracts, as principal, with
promoters who wish to host an event . The arrangements
are said to be designed to provide separation between the

# C 361 / 8 PEN " Official Journal of the European Communities 27 . 11 . 97

FIA and FOA of the supervisory and commercial aspects
of Formula One in order to avoid conflict or interest .

The FIA is concerned to ensure that the Grand Prix
races proceed fairly and with full regard to the safety
regulations, whereas commercial matters are dealt with
under the agreements between FOA and promoters .

8 . The Broadcasting Agreements have been concluded
by FOA with 60 broadcasters worldwide . For each
Grand Prix, FOA contracts with a broadcasting company
in the host country to serve as host broadcaster, who is
responsible for the production of moving images of the
Grand Prix and making its signal, the ' International
Feed ', available to non-host broadcasters transmitting the
race in their territories . All events in each year 's Cham ­
pionship are sold as a package to each broadcaster .
Broadcasters are obliged to broadcast every event in the
Championship . Some of the broadcasting agreements
provide for a discount of 33 % on the price paid by the
broadcaster if the broadcaster does not broadcast any
' open wheeler racing ' other than Formula One . There
are two categories of broadcasting agreements . For free ­
access television, contracts are typically concluded with
one broadcaster in a territorially defined area and with
certain limited exclusivity granted . Typically, the
agreements have a duration of between one and five
years but several are for 10 years . Typically, the licence
grants rights to show live and / or on a delayed basis each
main race fo each Grand Prix, in return for an annual
fee . For pay-television, FOA has entered into pay-TV
contracts covering 94 countries for the ' Supersignal ', a
service providing by FOA using state-of-the-art digital
technology to produce six separate channels, showing
different aspects of the race, on a pay-per-view basis .
The duration of the agreements is up to 11 years .

9 . The Promoters Contracts are between FOA and

around 20 promoters, who may be circuit owners or
national motoring associations or any other commercial
entity . These typically run for five years . The contracts
are substantially in the form agreed under the Concorde
Agreement between the FIA and the signatory teams .
They set out the terms under which the promoters agree
to stage events, including adhering to various safety and
technical regulations of the FIA and providing insurance
cover . Promoters propose a sporting organizer for the
event they wish to promote and the sporting organizer
has to enter into an organization agreement with the
FIA . The sporting organizer is typically the ASN and has
responsibility for ensuring that the event is run in
accordance with the Sporting Regulations laid down by

the FIA and for ensuring the safety of competitions and
spectators . Promoters assign any intellectual property
rights they may have, including all broadcasting rights,
to FOA . The conclusion of a contract does not neces ­

sarily ensure the event will appear on the Grand Prix
calendar for any season during the term of the contract .
It is claimed that, in order to avoid, confusion between
Formula One and the American series called the ' Cart
World Series ', promoters undertake to ensure, during
the term of the agreement, that no race for open wheels
single seat cars equipped with engines with a capacity in
excess of 1 000 cubic centimetres other than the event or

a race in the FIA Formula 3000 International Cham ­
pionship will take place on the circuit where the Cham ­
pionship event is to take place, whether promoted by the
promoter or otherwise, without prior consent of the
Formula One Commission . The Formula One

Commission is the body which rules on all matters
concerning the Championship and in particular on any
changes to the regulations governing the Championship .

10 . On preliminary examination, the Commission
considers that the agreements affect the organization and
televising of the Championship, and other motor sports .
In addition, the agreements have an effect on sponsors,
promoters, circuit owners, organizers, broadcasters,
teams, advertisers and viewers and viewers in relation to
the Championship, other auto motor sport and other
major sporting events . The notified agreements fall
within the scope of Regulation No 17 .

11 . The Commission invites interested third parties to
submit their observations on the FIA / FOA arrangements,
and their operation in practice, including views on the
relevant market(s ) affected . In accordance with Article
20 or Regulation No 17, such observations will be
protected by professional secrecy .

Observations must reach the Commission no later than
30 days following the date of this publication . They may
be sent to the Commission by fax ( 32-2 ) 296 98 04 ) of by
post quoting reference IV / 36.638 FIA / FOA, to :

European Commission,
Directorate-General for Competition ( DG IV ),
Directoraat C,
Office 3 / 103,
Avenue de Cortenberg / Kortenberglaan 150,

B-1040 Brussels .