Andretti’s planned entry into Formula 1 is a really complicated matter. Although the American racing team is a big name in motorsport and would like to pay the entry fee of 200 million dollars, Michael Andretti’s plans in Formula 1 are received with frost.
The son of ex-Formula 1 world champion Mario Andretti recently had some talks with team bosses, Formula 1 managers and also FIA President Mohammed Ben Sulayem at the race weekend in Miami, who, according to Andretti, supports the entry. Nevertheless, the path for potential newcomers remains rocky.
“A lot of people welcome it. It’s just not the right people at the moment,” the American said at the weekend.
Andretti would fit in with the prevailing boom in the USA. Interest is growing in the States (thanks in part to the Netflix documentary Drive to Survive) and soon there will be three races in the US in Austin, Miami and Las Vegas. What is missing, however, is a local driver, which Andretti could change with Colton Herta, for example.
A second US team alongside Haas, but ones that hardly really show their national identity, would be a real coup for the grid – especially when it comes to a name like that. Andretti operates in many championships worldwide such as the IndyCar series, Formula E, Extreme E or Supercars and knows what ingredients you need for success.
Despite the big name: Current teams reserved
“The Andretti name has a long history in Formula 1 and in various forms of motorsport and I think it would represent great added value,” says McLaren CEO Zak Brown. “A very credible racing team with a credible brand, with the right resources, is an asset to the sport in my opinion.”
Andretti would definitely be a different caliber than Caterham, HRT and Marussia, which joined F1 in 2010 and all disappeared within a few years. But precisely for this reason, the other teams are reluctant when it comes to another candidate in their closed society.
“We currently have ten teams and we distribute the prize money among these ten teams,” says Mercedes Motorsport Director Toto Wolff. “We have invested a lot in recent years. All the teams here (in the press conference; editor’s note) have probably invested more than a billion in Formula 1 projects in recent years.”
“So it has to be a win. If a team comes in, how can you prove that you bring in more money than it actually costs?” says the Austrian. “Because the eleventh team means a ten percent dilution for everyone else.”
Wolff: We don’t want to dilute the franchise value
It is precisely this concern that the Formula 1 teams wanted to have addressed when they signed the latest Concorde Agreement 2020. Because a new team means everyone else gets a smaller slice of the pie, an anti-dilution fee of $200 million has been set to be shared among the other ten teams.
This ensures that a new team is serious when they have to shell out so much money, and it also protects the value of the existing teams.
Andretti made it clear from the start that the entrance fee was not a problem and that the sum would be paid. But the business idea in Formula 1 does not end there: Now the other teams fear that this is not enough to absorb the losses caused by an eleventh team.
“The value of Formula 1 is that there are only a limited number of franchises,” says Wolff. “And we don’t want to dilute that value by just adding teams.”
Horner: You don’t get very far with 200 million
Red Bull team boss Christian Horner admits that the issue of money is always an “important factor” in the talks and that ultimately responsibility rests with Formula 1 for the approach they take to their product.
“Obviously if they want more teams, they have to decrease their own share,” he says. “Because it would be unfair to expect the other teams to indirectly pay for the additional new entrants.”
While the $200 million in signing fee would deprive any team of core value, if you look at the long-term picture, he says, “It’s the first time we’ve had 10 healthy franchises that I can remember.”
“$200 million is a lot of money. But if you divide it among the participants in this business, you won’t get far with it,” said the Brit. “And besides, this is a one-time thing. It’s not $200 million every year. At the end of the day, talks like this always come down to economics.”
Alfa Romeo team boss Frederic Vasseur stressed: “It is true that even if the ten teams are sustainable today and we are going in a very good direction with Formula 1 today, it may not remain so in the next five or ten years will”. He wants to avoid going back to the way it was before and during the COVID pandemic, when the bottom third of Formula 1 was struggling to survive.
Convince existing teams: Difficult!
The challenge for Andretti will be that you not only have to prove that you have the resources for a serious and competitive new team, but that you can also absorb the losses caused by the differently distributed prize money.
As an American team that wants an American driver like Colton Herta, you certainly have an argument. In view of the new races in Miami and Las Vegas, skeptics could claim that these will do more for the growth of Formula 1 than a new team.
It will be hard work for Andretti if you want to fulfill your Formula 1 dream. The FIA has not even started a bidding process for a new team. And yet the team has to get down to business now if they want to be there in 2024.
According to Michael Andretti, there are already plans to build a factory in Indianapolis, which should start in August. Even without a firm commitment, the American has to take the risk: “We have to get the ball rolling,” he says.
Formula 1 has to see what value a new team brings and how it affects the distribution of prize money. In addition, you would have security if another team dropped out. However, the current structure works quite well for those who are already at the table. It will therefore take some convincing away from the $200 million.