As the Formula One teams arrive in Qatar the big topic on everyone’s lips will be the FIA’s approval of an 11th team to join the F1 grid. Andretti Motorsport has been asking to join the sport since 2021 so the FIA was duty bound to open an application route which the American outfit have now satisfied.
With the exception of McLaren’s Zak Brown and Alpine, the other eight teams have made their view clear that the sport does not need an eleventh team and are concerned about how they will be impacted financially.
Team finances a red herring
They complain about becoming diluted in the prize money awards, yet in reality they are more worried about Andretti sucking in sponsors which are either supporting a current team or ready to join the sport.
The number of US based sponsors rose by two thirds in the two years to the end of 2022 and Andretti being the first properly based American team will clearly be an attractive proposition for US based technology companies looking for global exposure.
Formula One teams are not suffering as they did just five years ago, many have their cars filed with partner’s logo’s and Red Bull announced last season they were now completely self funding -not requiring support from the wider Red Bull Group any more.
Alpine have just reported a £26m profit for 2022 and their revenues grew from just over £200m to around £250m, and this despite Renault reducing their marking support from £60m to around just £40m.
Williams can’t spend all their money
The Williams team who have it seems forever been bereft of cash are now complaining the regulations restricting their annual capital spend is preventing them from developing new factory infrastructure to compete with the rest of the Formula One grid.
“The team has, over the last 15 years, been through a tremendous amount of difficulty, financially and otherwise and it’s survived all of that,” he said.
“It was just survival, compared to other organisations that have had finance.”
Williams now have the finance not only to deliver a competitive in season development programme but to begin addressing the ageing machines and software the team is stuck with, but the rules prevent them from making a number of updates immediately.
Capital expenditure limited
“The cost cap is just a limiting factor on all of these things, simply just because it puts us in a position where there’s a limited amount of capex (capital expenditure) allowed, that won’t be enough to spend our way to success.
“So the pathway is to a certain extent the number of years required to get some of the core facilities to the level required to compete with the funds and that’s not the work of six months or 12 months.”
Yet as ever inside the Piranha club, self interest reigns even ahead of the interest of the fans and the sport and the Andretti approval will meet with resistance this weekend in Qatar.
Of course as did Haas F1 in 2016, prior to joining F1 the spending limits and other regulations such as testing restrictions would not apply to Andretti, giving them a he advantage in the area of cost cap rationing. Billionaire Lawrence Stroll owner of Aston Martin is the first F1 team principal to respond to the news.
Stroll rejects need for new F1 team
“I think F1, at the moment, the business is on fire,” Stroll said to Sky.
“The sport has never been in a better place. I believe if it isn’t broken, you don’t need to fix it.”
Stroll who has benefitted from the growth in F1 since he happened upon the opportunity to buy the defunct Racing Point (Force India), appears to have the mentality of having just made it through the paddock door he now wants to pull up the drawbridge behind to prevent others participating.
“So, I’m a strong believer that it’s working really well with 10 teams right now. And I believe that’s the way it should stay,” adds Stroll.
“There’s never been more fans or spectators, the audience is the highest its ever been and we continue to see substantial growth particularly in the United States which is the largest coster market in the world.”
Andretti may suck up sponsorship
Of course the market for Formula One is growing exponentially in the US and Aston Martin have seen a revival in the car sales fortunes there. Another team like Andretti could of course knock them down the F1 pecking order making them appear less attractive.
“We now have three races in the States, our second year in Miami, we’re going to Las Vegas in November – so I see tremendous growth possibilities going forward,” concluded Stroll.
In may ways the attitude of the current F1 teams towards another competitor is in reality based upon they concern Andretti may affect their ability to maximise the points they have currently.
Andretti are funded by huge private equity backers Guggenheim and Will Buxton noted earlier this year:
New F1 team with deep pockets
“Speaking to a lot of folks in the IndyCar paddock this weekend. The Andretti F1 project is serious. Very serious.
“They could pay the entry fee as chump change. And in a non budget capped era have funding to make the top 3 wince. No wonder the establishment are worried,” Buxton tweeted.
To compete in Formula One and maintain a top three position before the cost cap would require a team to have around $500m a year to spend on car design, build and development.
Andretti clearly have deep pockets and this is of concern to the F1 establishment.
Andretti join with or without an F1 money deal
The media consensus is that now Andretti must wait for Liberty Media and the teas to agree with them a commercial deal before they can join the grid. Yet as TJ13 writes, this is not necessarily the case and Andretti could join without a commercial deal and pay no entrance fee.
Article 8.5 of the F1 Sporting Regulations Staes the FIA is the “sole arbiter” when deciding the applicants and entrants for an F1 season and given the exhaustive process they set out, Andretti have clearly proven they are no HRT, Virgin or Marrusia half baked projects.
Lawrence Stroll is the first of a number of F1 team principals who will object to this weeks news from the FIA, but it appears there’s little they can do about it.