Michael Andretti’s prospective Andretti Global racing team entry into Formula 1 is certainly splitting the F1 paddock in more ways than one, with rival team principals in particular keen to make their concerns heard.
Over the past few weeks when the Andretti’s entry seems to have ramped up in its likelihood of joining F1, not just for the next new regulations but for as early as the 2024 season, it has only had Alpine and McLaren as keen backers.
This is down to vested interests in the American organisation for both of these teams, with Alpine seemingly having struck a Renault power unit supply deal for the Andretti team and McLaren’s CEO Zak Brown being a business partner of Andretti’s whilst also keen to evaluate Andretti’s Colton Herta for its own F1 team.
The rest of the F1 grid are seemingly less enthusiastic about an all-new eleventh team rocking up and enjoying a slice of their hard-earned cash whilst reducing their long-term earnings too. Andretti must prove to F1’s owners, Liberty Media, that they’re entry would not only be of value, but more valuable from a marketing and audience sense than any of the other aspiring F1 teams.
What it has at its disposal over the existing ‘American’ team in the championship, Haas, is the promise of true American talent, backing, sponsors and personnel based out of the United States, unlike Haas. However the fact of whether ultimate unanimity is required from the existing ten teams to allow the entry, or whether the newly-fangled Concorde Agreement, whereby only eight teams need to agree on regulation changes, applies in this case.
Red Bull’s Christian Horner, for example, believes that “it should be a Liberty issue to address if they want new teams,” and not down to the teams to take the financial hit, even with the $200million anti-dilution fee. It should be remembered however that F1 has had more teams than ten over the years, with 2016 the last time the grid was made up of eleven teams (before the unfortunate demise of Manor Racing), and 2012 the last time it was formed of twelve before HRT disappeared from the series.
The vocal nature of Andretti’s bid to join, inaugurated by its failed attempt to purchase the Sauber team last year, is what is prompting all the questioning from fans and media alike, with many wanting answers from F1 and the FIA on how such a historic name seriously bidding to join could cast any doubts over its authenticity.
Several F1 team principals, including Mercedes’ Toto Wolff, McLaren’s Zak Brown, Alpine’s Laurent Rossi, Christian Horner, Alfa Romeo’s Frederic Vasseur and Haas’s Guenther Steiner.
Favour of Andretti joining F1 –
Toto Wolff: “Yeah, I got a WhatsApp from Mario [Andretti] during Miami weekend. And I think so many things have been said around an American entry. So on the plusses, I’m sure that if we have a true American team, with an American driver, that would be very beneficial. But we have 10 entries today, we divide the prize fund among those 10 entries. We have invested considerable amounts over the last 10 years.
“I mean, each of the organisations that’s sitting here on the podium has probably put more than a billion into the Formula 1 projects over the years, so it needs to be accretive. If a team comes in, how can you demonstrate that you’re bringing in more money than it’s actually costing: because an eleventh team means a ten percent dilution for everybody else. So, if one is able to demonstrate that, then we should all be sitting on the table, and cheer for such an entry. But that hasn’t been demonstrated yet. And that may sound a bit dry, because it comes down to the numbers, but the value of Formula 1 is that it’s a limited amount of franchises. And we don’t want to dilute that value by just adding teams.”
Zak Brown: “Yeah. I agree with Toto. We’ve got ten great teams, and an eleventh and the twelfth team need to add value to the sport. Obviously, the Andretti name has a huge history, in Formula 1, in various forms of motor sport, and I think would add a lot of value. So as long as it’s a team that helps build the sport, unlike some of the other entries that we’ve seen, over the years that have come and gone in year two or three, I think we can’t accept teams like that. But a very credible racing team with a credible brand, with the right resources, I think is additive to the sport. And that appears to be what Michael has put together. So, on that basis, we are supportive.”
Laurent Rossi: “It’s a bit of a deja-vu moment? Right? We had the same kind of questions, and Christian was actually sitting here instead of Zak saying exactly the same thing. So nothing really new here. It needs to be accretive. I’m very favourable, I’ve talked to Michael as well. It goes along with the expansion in the US. I think that will contribute to the show, an American team will directly generate, I guess, interest in the US. And therefore, revenue. then we need to demonstrate that it’s enough to compensate for the dilution that Toto was mentioning. Gut feeling? I think he would – but let’s do the job properly and we’ll see.”
Position with FIA encouraging Porsche, Audi, Andretti to partner –
Christian Horner: “Well, obviously, you know naturally for the current signatories to the Concorde Agreement, it makes total logical sense to say that the ten teams or ten franchises have an intrinsic value and you dilute that by increasing the number. You know, theoretically, it should be a Liberty issue to address if they want new teams to come in. And to expand the number beyond 10, then fiscally, it was always going to come down to a question of how does that affect the distribution of the prize fund? So, money is ultimately going to be a significant factor.
“Ultimately, I see a question really for the promoter, that if they want more teams, they’re obviously going to have to dilute their share of the fund, because it would be unfair to expect the other teams to pay for the additional new entrants to come in indirectly. So that’s always going to be the conflict you have. I think it’s great that there’s the interest from both OEMs and a brand and a team like Andretti, you know, it’s a great name… [it would] be better if Mario came back driving, but, you know, I think it’s something that really Liberty, it’s their business model that they need to work out for the future.”
Frederic Vasseur: “If we have a new team coming in, with mega added value for the championship, this could make sense. But as Christian said before, that we don’t have welcoming someone new, to put at risk two or three teams on the grid, and to stay at the same thing, the same situation. I think that by the Concorde agreement we are touching these points, and at the end of the day, it will be up to the FOM to decide what they want to do. I think that we have enough space to find partnership with the team existing on the grid, more than to welcome another one.”
Guenther Steiner: “I think Christian and Fred explained it very well. And just to adapt on that one, as businesses, I think, first of all, we have got in the moment 10 stable teams, which for a long time was not possible in F1, or was not happening in F1. Now, since five years, everything is pretty stable. Very good. And why would the 10 team say we dilute our value to bring somebody new in, you know, what’s in it for us? You know, we have been here a long time. So as they said, I mean, if FOM wants to distribute more money or something that is another discussion, but just to have more teams, more doesn’t mean being better. So I fully agree with Fred and Christian, what they said.”
$200 million anti-dilution fee a pointless addition to the latest Concorde –
Horner: “What that essentially does, it puts an intrinsic value or minimum value on any entrant, you know, from P10 upwards, I think that you’ve got to look longer term. And I think, as Guenther was just saying, it’s the first time in memory that we’ve got ten healthy franchises, ten healthy teams. There was always a team, you know, the last couple of teams would always be fighting to survive, whereas now they’re in a position where they can actually plan for the future, they can look forward rather than just being in the present. And I think that, you know, the $200million is a significant amount of money. But you know, in this business, and when you divide it by the participants, it doesn’t go a long way. And it’s a one shot, it’s not 200 million every year. So, you know, at the end of the day, a conversation like this will always come down to economics.”
Vasseur: “For sure, it will come down to economics and as Christian said, it’s not a one-off. When you spoke about the $200million, it’s the fee to join, but then you have to think about the factory, you have to anticipate the project two or three years before without incomes and so that we are speaking about a huge amount. And it’s true also that even if the 10 teams today are sustainable, and we are going in a very good direction, with F1 today, perhaps it won’t stay like this over the next five years or ten years and that we have just to take care to avoid to be in the situation that it was before COVID and during COVID that you are the last third of the grid just on the survival mode.”
Steiner: “I think there’s not a lot more so I think that and…. Yeah, it’s always the same. Yeah, they’re all saying the same between them. So nothing more to add.”