Formula One has for decades to ‘crack’ America. From the lows of the farce at Indianapolis in 2005, where just six cars took the start, to now three Grand Prix each year in the USA the sport has made significant progress.
Sponsorship and partner relationships from US companies has trebled since the acquisition of F1’s commercial rights by Liberty Media and TV audiences in the states have also rocketed in recent years.
Yet when American based global racing organisation Andretti Motorsport came knocking on the door, F1 collectively slammed it firmly in their face. Despite the FIA scrutinising the team’s business plan and green lighting their application, the teams petitioned Liberty Media via FOM to deny Andretti a place on the grid.
F1 reject Andretti
The condition set for the US team was should they come back in 2028 with a new power unit supplier – namely General Motors (Cadillac) – they would be adding value to the sport and the no would become a yes.
Whether inspired by Andretti or just sparked by the concern of a number of US senators, an investigation was announced during the Miami Grand Prix weekend by the US Justice department. The accusation is that F1 is in breach of US ‘anti-competition’ laws by refusing Andretti or any other willing F1 entrant access to the competition.
The threat is were F1 shown to be in breach, the three races in Miami, Austin and Las Vegas would be banned by US authorities.
The appointment of Flavio Briatore as an advisor to Alpine has seen the unveiling of Renault’s desire to exit Formula One. There have been open conversations in the media about Alpine becoming a power unit customer team as the Renault facility in Viry-Chattilon is paired back.
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Alpine to be sold
As an independent F1 team, Alpine and its facilities in Enstone could then be sold by Renault and end a sorry decade of failure and expense by the French auto manufacturer. So why don’t Andretti snap up the opportunity given there are few FIA regulations not who can buy an existing F1 team?
Firstly, F1 being a closed shop creates valuations which cant be verified properly and has been accused of quoting ridiculously inflated figures. Alpine was valued in a Forbes survey at $1.4bn recently and although this included the engine facility which would not be part of a future sale process, the remaining valuation would still be approaching $1bn.
The Enstone based outfit has suffered under investment for over a decade and any potential new owner would be forced to embark on a capital spending spree like Williams. James Vowles has cited over time this to be “hundreds of millions” which of course for any new owner of Alpine inflates the cost of acquisition even further.
Andretti has invested in a facility at Silverstone for its F1 project and has recruited a reported 100 people to date who are are full time on the project. Further, Alpine comes with baggage as many of the experienced engineers have left for pastures new. Those who remain are clearly not being targeted by other teams which suggests the asset that is Alpine’s workforce could even be seen as a liability.
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Andretti prefer a blank sheet of paper
Yet a deal could be done if Andretti so wished taking into account all the above factors and at $5-600m with a required investment of a further $200m this could be around the new ‘anti-dilution’ fee which will be inserted into the coming Concorde agreement later this year.
Clearly Andretti’s preference is to start with a blank sheet of paper and not have to waste time problem solving the copious issues which Alpine currently is experiencing. As the US Justice department investigation progresses, Andretti have become more confident the ruling when it comes will bring huge pressure to bear on Formula One.
Liberty Media don’t really care how many teams compete in the sport because the prize money on offer from the American company would cost them the same. Its the teams who are rejecting any dilution of these funds and for now it suits Liberty to support their cause.
The moment a US Justice Department ruling comes down against F1 for anti competition, Liberty will roll over in an instant to protect its investment in racing in the states. They have spent a reported $750m on the facilities in Las Vegas and in return have a ten year contract to recoup their investment – and a lot more.
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“They don’t think F1 can keep them out”
To lose this together with the huge promotion fees paid by the organisers in Miami and Austin Texas would be a blow to F1 and would not be replaced quickly.
Renown F1 writer Ed Stark gives his expert opinion on the matter writing for The Race: “I think Andretti are backing themselves to get on the grid, partly through the anti-trust route and F1 realising they cannot justify keeping them out.”
“They don’t think F1 can keep them out.”
Excuses have been offered from the paddock such as the fact certain certain circuits have pit lanes too crowded to fit an eleventh team, yet the Concorde agreement currently provides for up to twelve teams and the race promoters obliged to facilitate them.
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Reasoning doesn’t make sense
Other complaints over an eleventh team include the fact smaller teams are concerned they will lose some of their sponsorship deals to the new competition. Yet Williams recently declared their portfolio if partners is now closed. They now have the ability to spend up to the cost cap and so anyone looking to partner with Williams at present will find the door firmly shut.
Of course there’s now reason to expect the growth in sponsor names on each team’s livery since Liberty’s acquisition in 2017 won’t continue at its current rate and Andretti have their own portfolio of global partners which would presumably come with them to the sport, so again the reasoning is flawed.
There will be other suitors for Alpine when they decided the time is right to sell so will Andretti regret their decision to ignore the Enstone team opportunity? Their confidence in the US investigation and the subsequent pressure piled onto F1 appears to suggest not.
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Their dominance with Sebastian Vettel claiming eight titles in four consecutive years (2010-2013) appeared to change the way a top F1 team was organised. Gone was the corporate interference from Ford as the Austrian Holding company gave Horner, Newey et al almost complete freedom to go about racing however they wished.
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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.
