At the recent Grand Prix in Monaco, there appeared to have been a secret meeting of minds amongst the senior members of the Formula One Piranha club. The war which has raged between the FIA president and the sport’s commercial rights holders appeared to have been settled for now, as both Stefano Domenicali (F1 CEO) and Mohamed ben Sulayem were singing from the same hymn sheet.
Having opened the door for new F1 team applications early last season, the six month process of analysing every aspect of the prospective new team’s business plans resulted in the FIA giving the green like to Andretti Racing. Six months later Stefano Domenicali finally delivered the verdict on behalf of Liberty Media and it was a very firm “NO” though the door was left open to resist the proposal when General Motors have built a new 2026 F1 specification powertrain.
Liberty president demeans F1 legend
In Miami this year, Greg Maffei who presides over the Liberty Media board was overheard to making a shocking statement which “pierced my heart” according to motorsport legend Mario Andretti.
Mario was chatting with F1 CEO Stefano Domenicali who is an F1 man through and through and is the longest standing Ferrari team principal (2008-14) since the glory days when the team was run by Jean Todt. As the Sprint race came to a conclusion, Maffei stormed over to Mario to inform him, “‘Mario, I want to tell you that I will do everything in my power to see that Michael never enters Formula 1,’” the motorsports icon explained to NBC.
The Andretti application to be the 11th team on the grid was not received well by most team principals in the paddock. They had stupidly agreed a $200m anti-dilution fee in the 2021 Concorde Agreement, which legally binds the FIA, FOM and the teams, to compensate the existing ten competitors should an eleventh team join the sport and dilute the prize money on offer.
Now with a realistic prospect of this facing them, the likes of Guenther Steiner boss of the American owned team Haas, were talking up the number claiming now it should be $600m or even more. Other objections were made citing certain circuits where an eleventh garage would be hard to accommodate, yet the existing agreements with the promoters legally covers them having to provide facilities for up to twelve F1 teams, not merely the ten who currently compete.
Zak Brown backs Andretti F1 entry
Not all the team bosses were opposed to Andretti joining the sport, with McLaren CEO Zak Brown being more than vociferous in his support for fellow American racers. Speaking to Motorsport.com, Brown commented: “I’ve found some Formula 1 teams are very short-sighted in their view on not taking a longer-range view of what are things that can grow the sport, and they kind of think about the here and now.”
“Unfortunately, I’m not surprised some of our competitors are quite short-sighted in their thinking,” he lamented stating if a new team pays the anti-dilution fee they should be allowed to enter F1.
Brown went on to argue the case for Andretti and others bringing added value stating so “whether it’s an 11th team and/or a 12th team, and can help make the pie bigger, drive greater awareness and we all get more sponsors, we get more media deals, and they pay what’s a fair franchise fee, which all sports have, then I see no reason for them not to join.”
Having rejected the Andretti proposal out of hand, Libery Media and F1 find themselves the focus of an investigation from the US Justice department, who believe they may be breaking the law pertaining to anti-competitive practices. F1 is basically a private members club and if they don’t look the like of you, theres no way through the door.
McLaren CEO U-turns
Whilst Domenicali has previously suggested Andretti could buy an existing team, this line of reasoning was not common amongst the team bosses for obvious reasons. Then in Monaco it was all change, now the party line from numerous high profile paddock executives was that this was the best way for Andretti to join the little club.
Yet the conundrum is that no F1 teams are up for sale, like in yesteryear, where one or two were regularly on the brink of collapse.
Even Mohammed ben Sulayem appeared to have backtracked in the principality, citing this route as the quickest way for the American Racing organisation to join the F1 party bus and travel around the world. Brown too now cites this as the best point of entry into the sport and today he explains his thinking in more detail to ESPN.
“That would certainly be the easiest thing to do. There doesn’t seem to be anyone who wants to sell at the moment. But that being said, it just means the offer needs to be bigger,” Brown claimed. I mean if this was a world leader seeking re-election their two opposite faces would be smeared across every front page on the planet.
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F1 self hype producing ridiculous numbers
F1 has been enjoying boom times in recent years, and the numbers being cited as valuations for teams and the sport are astronomical when compared to just five years ago. A recent article published in Bloomberg suggested the sport itself was now worth $20bn and that an approach had been made from Saudi representatives which confirmed this number.
In late 2016 Liberty Media acquired the commercial rights to F1 for a reported $4.4bn from previous owners Bernie Ecclestone and CVC Capital partners. So in just over seven years they believe the value has risen almost five times.
Five years ago the struggling Williams team was acquired from the family of founder Frank Williams for a reported $150m which Zak Brown refers to when making a bold rather bold statement about how values have rocketed.
“I don’t think five years later you can buy that team for less than a billion and a half. The value creation has been immense,” claims there McLaren CEO. “Historically in Formula 1, it was enter, show up and the sport didn’t care if you didn’t make it halfway through a year,” he recalled. “So in the past you had Lola start a team and go bust after three races.
International sporting comparisons
Now with the budget cap preventing teams spending several hundreds of million dollars a year and the number of sponsors even on the lowly Sauber team having exploded, half the grid is now profitable. Thise who aren’t just limit their spending underneath the cost cap, yet are competing in a closer packed field than F1 has ever known.
In April this year the NHL’s board of governors officially approved the transfer of the Arizona Coyotes’ current hockey assets to the Smith Entertainment Group, controlled by Ryan and Ashley Smith and based in Salt Lake City. The transaction cost the new franchise owners $1.2bn. Sportico valued the assets on the open market to be around $675m, so the price of entry to the league was in reality $525m.
The previous two entries into the NHL cost $500 million (Las Vegas) and $650 million (Seattle), although these were complete start up operations. Bearing this in mind, the valuation Zak brown is placing on the likes of Alpine or Haas F1 – both are struggling and their owners do not invest in the teams properly – is ridiculous.
Haas F1 outsource their chassis design and body work manufacturing to Italian motorsports company Delara and Alpine like Williams have ageing infrastructure and a demotivated workforce, which would require significant investment to bring the team up to scratch.
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F1 not a healthy competition
Further, why would Andretti want to buy the chaos that is the Renault owned F1 team, when it could take them years to sort out the mess before they can become competitive?
Of course F1 is the largest global sport which competes each year in terms of audience, which is a huge attraction for sponsors and partners of the sport and teams alike. So were the new Concorde agreement to raise the anti-dilution fee to $600m as some insiders believe is being discussed, this seems a fair proposition when comparing the entry fee to huge worth American sporting leagues.
Renault have only got themselves to blame for the basket case of an F1 team they run, the team has suffered under investment since the French automaker bought them back in 2016. Sacked team boss Otmar Szafnauer revealed just last year, the Alpine budget was tens of millions below the cost cap.
Brown continues his optimistic analysis of the F1 grid stating, “Liberty is now in a position where you’ve got ten very healthy teams. So they’re going to hold an 11th and 12th team to the extreme highest criteria and extreme due diligence – which I think is right.”
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Two F1 teams will be gone in time
If a healthy competition includes four teams at the bottom of the pile who share a mere eleven points between them, while the rest have accumulated eight hundred and seventy six, then Brown is talking rubbish. Given time
Gene Haas will get bored of his F1 adventure and Renault will ship out of the sport considering no one even wants to buy their under powered engines.
Andretti gained agreement from the FIA to join the sport while the anti-dilution fee is $200m. Whether the US Justice department will rule against F1 for anti-competitive practices and insist this is the fee they can pay on entry, only time will tell.
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With over 30 years of experience in Formula 1 as an insider journalist, I have built trusted connections across the paddock, from race engineers and mechanics to senior team figures. At The Judge 13, I and a handful of trusted colleagues share exclusive Formula 1 news, expert analysis and behind-the-scenes stories you will not find in mainstream motorsport media.
Gene Haas wants out of F1 so surely that is Andretti’s entry? Zak Brown is right, F1 teams are short sighted, selfish & greedy. If the maximum pit facility is 12 teams, then that is the maximum number of teams. If a team wants to run 3 cars instead of 2 they can but at more expense versus a 33% chance of more points scoring? F1 teams, get over yourselves. Your egos are tripping you up.