US Judiciary Committee launches F1 investigation. Formula One has gotten itself into a right pickle and in the market it most hopes to “crack” in the United States of America. The FIA who writes and polices the rules for the sport has green lighted the Andretti organisations F1 application to join the grid from as early as 2025.
Yet the F1 commercial rights holder, Liberty Media, subsequently rejected the Andretti bid citing various reasons for their decision. The FIA has yet to respond publicly to Liberty’s decision, but for now Andretti have been told to go away and return only when they have an engine manufacturer behind their bid.
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The Andretti name is a household one in the USA with Mario winning the F1 championship back in 1978. Since then the family have built a motor racing empire which races on three continents and in a number of different racing series, but for now has been rejected by F1.
Now the US Judiciary committee has launched an investigation into Liberty Media’s refusal to include Andretti. Jim Jordan the chairman has written to Liberty Media demanding documents relating to the Andretti decision. 12 members of congress have signed the document expressing fears that antitrust laws have been violated which has been sent to FOM CEO Stefano Domenicali and Liberty chairman Greg Maffei.
“The Committee on the Judiciary is responsible for examining the sufficiency of federal competition laws to protect against monopolies and other unfair restraints on trade,” states the letter, according to NBC.
“Sports leagues, like Formula 1, operate in a notable area of antitrust law in which some degree of collusion is necessary for the creation of the product.
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”However, when a sports league deviates from its rules and practices in a manner that reduces competition and depresses consumer interest in the product, the collusion may amount to anti-competitive conduct.”
Those behind the committees letter have done their homework and call out the reasons given for refusing them entry to F1 before 2028.
“The excuses put forward for denying Andretti Cadillac’s entry appear to be pretextual, arbitrary, and unrelated to Andretti Cadillac’s suitability to compete in Formula 1,” it states.
“For example, Formula 1 alleged that a new team could only add value to Formula 1 by ‘competing for podiums and race wins’. However, the FIA had already analysed – and approved of – the technical capabilities of Andretti Cadillac to compete among current teams, and most current teams in Formula 1 do not meet Formula 1’s standard of regularly competing for ‘podiums and race wins’.”
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This is a slam dunk rejection of this explanation offered by Liberty when they issued their response to the Andretti F1 application. Jordan now attacks FOM’s demands that Andretti find themselves a new F1 power unit manufacturer.
“Formula 1 also faulted Andretti Cadillac for attempting to use an existing engine manufacturer because it could ‘be damaging to the prestige and standing of’ Formula 1. At the same time, however, Formula 1 stated that if Andretti Cadillac used a new engine manufactured by General Motors in the team’s first year, a new engine would create a challenge for the new team.”
Jordan picked up on the response from the FIA when Liberty Media first rejected Andretti proposal. Disappointed with FOM’s decision, FAI President Mohammed Ben Sulayem claimed the refusal to allow Andretti in was “all about money,” something to which Jordan alludes next.
“Weak teams want to be protected from competition to the detriment of consumers and an additional team would compete for prize money and sponsorships.
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“If Formula 1 must hinder competition and harm consumers to protect failing competitors, then the entire Formula 1 model may be broken and the entity cannot hide behind the necessity of a sports league to pursue anti-competitive conduct.
“Delaying Andretti Cadillac’s entry into Formula 1 for even one year will harm American consumers to benefit failing Formula 1 teams.”
The letter establishes a clear legal line of attack that the Judicial Committee will follow up on. In addition to requesting data and documents relating to the Liberty review of the Andretti bid, Jordan has demanded all communication between the teams regarding new proposed entries as well as information relating to anti dilution fees as stated in the Concorde Agreement.
Liberty Media have until 21st of May to respond.
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Legal threat may solve Liberty’s problem
Legal pressure from the USA may well get Liberty Media out of a bind they find themselves in. Having fought several duels with the FIA over the past two years, FOM found itself in the dubious position where it was forced to represent the teams post of view on Andretti.
The teams clearly don’t want an eleventh competitor given they failed to set the entry fee at a proper level. The Concorde agreement provides for entry following a $200m anti-dilution payment which would be shared out amongst the ten existing teams.
At $200m this would provide for one year’s compensation and from then on there would be 11 teams sharing the money once divided amongst ten. Talk now is that the new 2025 Concorde Agreement will up the entry fee to around $600m.
Of course Liberty Media could increase the prize pot and silence all talk of losing out financially and the F1 commercial rights holder may secretly want Andretti to join the sport as it would indubitably increase the F1 interest particularly in the USA.
Having been seen to defend the interest of the teams, were Liberty forced by US authorities to accept Andretti into F1, it solves a political problem they currently face.
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Formula One delivered on its return to the streets of Miami. Daniel Ricciardo scored an improbable P4 in the Sprint and Lando Norris finally broke his duck in an eventful Grand Prix on Sunday.
Carlos Sainz rued the timing of the safety car claiming, “From there I had good pace as I said, if we could have extended for one more lap we could have won this race like Lando did, because we boxed just one lap before the Safety Car and we were ahead of Lando at the time so a bit frustrated there again.”…. READ MORE
I think the Andretti’s knew exactly what was coming down the pipe when they opened up shop in England. “Get the 2025 car ready boys, we’re going racing!”