The rapid increase in the popularity of Formula One means the piraña club – which was always squabbling over money – is now even more invested in its primary activity. Whilst some of the team bosses and primary sponsors are more interested in the competition, sadly they are in the minority. Prior to Mercedes buying the Brawn team and committing to a full works team in 2010, there German brand was well known for producing reliable cars which ended their life in Africa and the sub-continent as hard working durable taxi’s.
Yet as the Mercedes AMG F1 boss admitted to Martin Brundle during an interview in 2020, “I looked at some data and you could see the audience we were able to generate, the advertising value for Mercedes and all the partners on the car.”
Mercedes advertising value rockets 5000% from F1 participation
“In 2012 we [Mercedes brand] had an advertising value of, believe it or not, $60 or 70million, and today we are at $4.5billion, and that has unlocked so much potential.
“A Mercedes today is perceived as a sporty car. It wasn’t 10 years ago. Of course, the road cars you buy, the AMG cars, they have an edge. We have become a really cool brand.
“I think we [the F1 team] have played our part in helping the brand change its image by being in Formula 1, by being successful and triggering some emotion because fundamentally this is what you want to trigger, with all your marketing activities: an emotion. This is what we do.”
Dominating the F1 landscape paid Mercedes handsomely
Clearly those numbers suggest it was well worth the reported $1bn plus spent by Stuttgart in the research and development to build the most dominant V6 hybrid turbo power unit to launch on there F1 world in 2014.
Yet as a leading voice in the Piranha club, Toto speaks with a forked tongue. When refusing to contemplate a new team in the form of Andretti Autosport joining the sport the Mercedes boss decided to argue that given the cost Mercedes and others had suffered in F1 to date made it unfair for them to suffer a dilution of 10% in value with and 11th team.
Speaking at the team principals’ press conference in Miami Wolff argued the grid should remain as just 10 entrants.
Wolff opposes Andretti F1 entry
“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 the 11th team means a 10 per cent dilution for everybody else.”
Not all the teams oppose the Andretti new entrant proposal in fact Zak Brown of McLaren has been positive over the possibility.
2020 F1 Concorde agreement permits new teams
Further, he Concorde Agreement signed between the FIA, FOM and the teams in 2020 makes a provision to prevent the dilution of value should a new team be allowed to join the grid.
Any new team must pay a US$200 million fee, which gets split evenly between existing entrants to offset the loss in revenue caused by splitting prize money between 11 teams instead of ten.
Gunther Steiner believes that this number should now be revised given that Formula One has moved on.
Steiner wants Concorde agreement renegotiated
Speaking to motorsport.com in June 2022 the Haas team boss observed, “The dilution fund was set a few years ago, when the value of Formula One was different. “I think one of the things will be, should we readjust it to current market rate, which is a lot more than that one? But I think that’s a very difficult process to do.
“But if you’re really honest, and you look at when we signed the contract in 2020, teams were going for a lot less money than these days.
The problem with Steiner’s argument is the Concorde agreement provides a binding set of rules between all the parties in Formula One for the set term of the agreement. If the teams have failed to factor in their growth in value when setting the dilution clause value, then that is either negligent or stupid.
FIA shifts position on more than 10 teams
When asked about a new F1 entrant in February 2022, the FIA issued a statement: “The FIA is not currently in a position to consider or comment on any expressions of interest or applications received from potential new entrant teams in respect of the FIA Formula One World Championship.”
However in a blow to Wolff and others opposing the entry of Andretti Autosport, FIA president Mohammed ben Sulayem appears to have shifted his position.
Ben Sulayem posted on twitter: “I have asked my @FIA team to look at launching an Expressions of Interest process for prospective new teams for the FIA @F1 World Championship.”
— Mohammed Ben Sulayem (@Ben_Sulayem) January 2, 2023
The twitter responses were on the whole positive as fans appear to believe the more competition on the F1 grid the better the sport will be.
FIA in perpetual power struggle
The FIA, Formula One commercial and the teams are in a perpetual struggle over one thing or another. When discussing the increase of sprint races from 3 to 6, the FIA indicated it would need more money to police the additional responsibilities. At the time neither the teams nor FOM were forthcoming with any cash, so the FIA refused at that time to sanction three more sprints.
Mercedes star Lewis Hamilton has pitched a season long running battle with Mohammed Ben Sulayem over wearing his jewellery in the car. Hamilton is winning the battle so far given his doctor’s note appeared to stay the stewards hands from sanctioning the British driver.
Whether the FIA’s change of heart over new F1 entries is a reaction to any of the current and many niggles doing the rounds in the upper eschaton’s of F1, is uncertain.
Timing of FIA announcement coincides with Andretti factory launch
Yet the timing is interesting given the big Andretti media event as they broke ground on their new $200m state of the art factory in Indianapolis just before Christmas. Andretti Racing at the time stated this would be the base of operations for their F1 programme and they were progressing to be ready with an entry for 2024.
The last time new teams were allowed into the sport was an unmitigated failure as each of them fell by the way with only Marussia Manor scoring any points.
Yet the Andretti proposal is in another stratosphere when compared to the failed Lotus, Virgin and HRT entries of 2010. Andretti Autosport, led by Michael Andretti, operates worldwide in seven racing championships and focuses in eight different categories of motorsport with 17 full-time drivers.
Andretti worlds apart from Lotus, Virgin and HRT
Michael Andretti first became a team owner in 2003 after retiring from his full-time driving career. Nearly two decades later he has built a diverse, global enterprise competing at the highest levels of motorsport and reaching all five habitable continents.
In his time as a team owner, Andretti has collected 17 championship titles and 257 race wins – including five Indianapolis 500 victories, victory at the Bathurst 1000, a Sebring 12 Hour title and wins in the ABB FIA Formula E World Championship and Extreme E series.
Andretti have secured the $200m F1 entry fee from their sponsors Guggenheim Partners, who have also provided another $200m for the new facility build in Indiana.
Could it be that Wolff and Mercedes fear the arrival of such a successful and diverse racing organisation?
This wholesome moment from Lando and Daniel ❤️🟠 pic.twitter.com/iogUmermT0
— Sky Sports F1 (@SkySportsF1) December 23, 2022