All is quiet concerning the politics of Formula One following the recent war of words created by Mercedes and the FIA though the matter looks far from concluded. 

Following press reports Toto Wolff had received ‘confidential’ information from his Wife Susie who works for F1, the sport’s governing body said it was to investigate the processes of F1  to see if any improper information flows had occurred.

 

 

 

Andretti a pawn in FIA/F1 power struggle

This created a furore as team after team came out in support of the wife of the Mercedes boss and the FIA quickly reported it had concluded its evaluation and everything was in order.

Wolff threatened legal action and suggested her lawyers would be looking into the matter over the winter break. Yet this is merely a continuation of the power struggle between the FIA and FOM who manage Liberty Media’s commercial interests.

This was exacerbated a year ago when the president of the FIA announced they were unilaterally opening a process to evaluate new entrants into F1. The teams and FOM are opposed to this yet six months later the FIA announced it had rejected all applicants bar the one from Andretti motorsport who had been given the green light.

The ball then was in the court of FOM to discuss with the teams and Andretti how the commercial arrangements to include the eleventh team would work. Yet three months on there has been nothing but silence from FOM.

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$200m entry fee too low say F1 teams

Andretti says its ready to join the grid in 2025 which coincidentally is the last year under the current Concorde agreement which defines the relationships between the teams, the FIA and FOM. At present the contract allows for a new team to join following the payment of an anti-dilution amount $200m.

This was intended to compensate the existing teams for the loss of their share of price money as the fund is now spread amongst eleven competitors not ten.

A number of team principals have suggested this figure is out of date and should be revised up towards the $600m mark based on other recent US sport’s franchise arrangements.

Andretti must be registered by June this year of they are to compete at the start of the 2025 F1 season.

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Fan polls show they are almost universally supportive of an new F1 team given this creates greater intrigue and an opportunity for two more drivers to join the global motorsport racing series. F1 commentators in general accept the sport would be better with Andretti included, but the teams and FOM are yet to be convinced.

Of course FOM could run down the clock as they “consider” the FIA’s decision which to some extent puts the problem to bed. Yet General Motors recently announced they are building an F1 power unit expected to be used by Andretti F1 in the year 2028.

In the meantime Renault have confirmed they are open to supplying Andretti until Cadillac have had to play catch up with the other power unit manufacturers who have been working on the new power units for over a year.

Of course Andretti would prefer to join F1 while the entry costs are a third of what they may be in two years time and F1 business expert Mark Gallagher now believes a legal. Battle may be inevitable unless FOM reveals its position soon.

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Expert says “personal acrimony” involved

However, its not merely financial concerns that appear to be behind the resistance to a new American based team. Gallagher reveals also there is a personal aspect to the current resistance with a number of F1 team principals holding personal grievances against the racing corporation.

Gallagher reveals he has had a number of meetings with F1 team bosses who were upset about how Michael Andretti arrived in Monaco last year publicly demanding support for his team’s F1 entry.

“Of course, it’s not even just about the money. It is, I’m told, also about the manner of the way in which Michael Andretti has gone about it.

“There is a degree of personal acrimony. It might be too strong a word, but a lot of the teams really did not appreciate the way Michael Andretti went about trying to kickstart his entry, turning up in Monte Carlo with a sheet of paper saying: ‘Sign here and let me have a slice of the action.’

“I think they felt it was a backdoor grab to come in.”

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F1 bosses ridicule Andretti business model

Gallagher also reports a number of team principals have met with Andretti and are bemused by his business model claiming, “at no stage did they see how he has the capability or understanding of what it is really going to take to run a Formula 1 team.”

Of course that was and some say still is the situation with Gene Haas who joined F1 in 2016. Haas believes he can run his team on a shoe string and buy in all the components required to build his F1 challengers.

F1’s CEO appears to be stuck between a rock and a hard place given he must manage the financial interests of his bosses at Liberty Media who are a US based company. Should they refuse to allow Andretti in the infamous US legal system will surely kick in and an anti-competitive law suit would ensue.

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Andretti F1 legal battle looms

“The next few months are going to be fascinating,” notes Gallagher.

“My fear is that if Formula 1 rejects Andretti – they’ll come up with all the reasons why they don’t want to have it – I think we could see a lawsuit develop pretty quickly because Liberty’s an American company, Formula 1 is listed on the New York Stock Exchange, Andretti has raised a huge amount of money, relatively speaking, in the United States.

“And if he [Michael Andretti] has got General Motors lined up behind him, it’s not impossible to see a classic American legal case developed to say: ‘We should be allowed in and there’s no good grounds on which you should be stopping us. It’s an anti competitive to basically run the sport as an elite club.”

The problem is FIA regulations allow for up to 12 teams to compete each year and due to the two vacant slots the teams have become used to splitting the prize fund just 10 ways.

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Teams in knots given Concorde agreement

The teams themselves addressed this issue when the last Concorde agreement was reached by stipulating the $200m anti dilution entry fee and so arguing the sport has moved on since this was signed in 2021-  is an argument that will struggle to stand.

The clause itself demonstrates the teams addressed the topic of a new entry joining their ranks and so its difficult to argue this was never really a possibility.

Further, if it can be claimed the Concorde agreement is now ‘out of date’ or invalid, what other clauses can the three parties then choose to ignore?

Its now close to four months since the FIA gave Andretti the green light to join Formula One and time is running out for Stefano Domenicali and the teams to publish their position and deal with the consequences.

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