But would they all be willing to live without a Concorde Agreement? Does Autosport have it correctly that the FIA must be a part of a Concorde Agreement and that they and FOM must agree before to the document before there is something for the teams to agree to?
from Wiki "The Concorde Agreement is a contract between the Fédération Internationale de l'Automobile (FIA), the Formula One teams and the Formula One Group which dictates the terms by which the teams compete in races, and how the television revenues and prize money is shared. There have been eight versions of the Concorde Agreement, all of which terms were kept strictly secret."
The article makes clear cost factors that need to be addressed, logistics and circuit modifications. Money. That needs to be sorted before a new team is in place. With a new Concorde on the horizon there is zero rush or benefit to Liberty or the teams to see the grid expanded by 2025. We also have a new entrant on the grid with Audi. No new team count additional but a new player. The process is not close to half complete for Andretti. This was never going to be fast as Liberty and team's reactions to it just in the press over the last year.
I still think he'll buy Haas. Maybe as a partnership for a couple of years...but in the end it becomes Andretti.
He has no engine and no matter what mock-up F1 car he has had built it’s already useless. His 26 car is what he needs to focus on. Assuming he is on the grid then.
Wow.......a marketing joke this all is lol! https://www.autosport.com/f1/news/the-questionable-motivations-revealed-by-f1s-predictable-andretti-stalemate/10534711/ The questionable motivations revealed by F1’s predictable Andretti stalemate OPINION: The paddock politics surrounding Andretti Formula Racing’s bid to become Formula 1’s 11th team are nothing if not complex and on the cusp of boiling over. MATT KEW dives into the subtext Given it was the FIA’s idea to launch a formal entry process to potentially allow an 11th team into Formula 1, you might have expected governing body president Mohammed Ben Sulayem to welcome sole successful bidder Andretti with a rousing fanfare. Instead, it was abundantly clear he was having to walk a legal tightrope. When the FIA finally announced that it had given the proposal the green light, the accompanying quote attributed to him read: “The FIA is obliged to approve applications that comply with the Expressions of Interest application requirements and we have adhered to that procedure in deciding that Andretti Formula Racing LLC’s application would proceed to the next stage of the application process.” Hardly a warm reception. But all sentiment and subjectivity had to go out the window since there’s every chance his words will soon be studied by a band of lawyers. After that, Andretti and prospective partner Cadillac will release a damning statement blasting the championship for being a closed European shop to inflict massive reputational damage upon F1 and the FIA. That’s how this new-team saga surely ends. Throughout this application process, the 10 incumbent squads have never desired another playmate. They don’t want to slice their portion of the commercial pie by 10% to feed another hungry mouth. Even if Andretti can comfortably afford the current $200million anti-dilution fee the Concorde Agreement mandates to mitigate this, it still won’t be enough. The same contract also states F1 can house up to 12 teams… A new figure of $600m has been touted by the paddock as more appropriate to offset the financial pain of an additional entry. This would be written into the new Concorde Agreement which takes effect in 2026. But no matter how eye-watering the sum becomes, it seems it’s the principle – not the price – that’s the stumbling block. In the short term, there’s trepidation towards any unknown quantity that risks destabilising the current riches. Further down the line, should F1’s popularity wane (social media figures already show the Red Bull domination in 2023 is turning people off), teams don’t want a later arrival who they don’t fully trust suddenly getting itchy feet. There’s also an underlying element that existing competitors feel they deserve that bit more for having stuck by F1 during its mid-2010s lull. If those already loyally populating the pitlane don’t want the grid to grow, by proxy rights holder FOM most likely won’t allow it, regardless of whether CEO Stefano Domenicali then appears to have been strongarmed into his final decision. Thus, Andretti will not advance beyond the “next stage of the application process”, even if it can demonstrate credible blue-chip sponsor interest, General Motors backing and an ability to engage a sizeable US audience. When F1 tells Andretti there’s no room at the inn – despite the bid having satisfied every financial, sustainability and societal criteria stipulated by the FIA – someone will need to take the blame for the loss of money, time and, worst of all, face. As such, the FIA’s very deliberate wording is to try and spare it from being the party that forks out in an expensive settlement. What a dismal outcome this will be for a process conceived not to boost the health of F1, but to essentially boast about it. The FIA wasn’t motivated by any forecasted gains an 11th team might offer but instead to find out just how many companies really were ready to double down on their F1 interest. It’s been a self-affirming popularity contest.
Andretti didn’t wake up one morning and do use to apply for an F1 team , there must have been extensive consultations and someone must have told them they had a reasonable chance to get accepted . Hopefully they didn’t lead them down the garden path , these applications cost a lot of money and if they get rejected after satisfying all the conditions , should make for an interesting backlash or lawsuit . I can’t say I blame the other teams , it is about money and not the sport , the 11th team would be good for the sport and F1 , gonna cost the existing teams some $$ . Only solution I see is to come up with a formula that will initially protect the 10 teams $$ initially and have a plan and structure in place to increase the return in the future . No one in their right mind would agree to bring competition that will cost you $$ as the pie is getting diluted and if the competition is good , gonna cost you more money by beating you on track .
The problem is Mohammed Ben Sulayem (FIA) who keeps pouring oil on the fire and interfering where he ought not to. He, more or less, promised the Andrettis an entry in F1 circles, and now acts as their advocate by lobbying Liberty to accept them.
I agree , also F1 is an exclusive club , the want to protect their turf . Theoretically, there is rooms for 2 more teams but I doesn’t look like anyone wants a bigger field . So why even have an application process in place if there is almost no chance for a new entrant . Only lawyers with access to the contracts and familiar with the business and local laws can give an educated answer other wise they just just make it a closed club .
Excellent read with your morning coffee: https://apnews.com/article/andretti-f1-liberty-fia-expansion-grudge-f9245cdac60a2d4811bf7d7b3cb22a61 “Andretti can make a case that keeping him out of F1 is indeed personal: Three different people with direct knowledge of the conversations confirmed to AP that F1 asked General Motors if it would partner with someone other than Andretti.” That’s a crap look for F1 in general, Andretti signs an OEM powerhouse like GM up and Domenicalli and his drones run around embarrassing themselves. Bring back Chase Carey!
No Andretti admits he would do the same as the teams. Zero credibility on this. He is not credible to complain about the treatment!
https://www.autosport.com/f1/news/wed-whats-the-real-prize-money-impact-for-f1-teams-if-andretti-joins-the-grid/10537405/ What's the real prize money impact for F1 teams if Andretti joins the grid Andretti's bid to enter Formula 1 in 2025 remains one of the most divisive topics in the paddock right now. On one side of the debate is the FIA, which is pushing hard to expand the grid beyond the current 10 teams as it sees nothing but positives from the arrival of the Andretti-Cadillac operation. Opposing that push, however, are the teams, who think that an 11th squad will bring no tangible benefit. Furthermore, they fear that sharing the prize pool with another team risks bringing financial uncertainty for operations that just three years ago were on the brink during the COVID pandemic. Sitting somewhere in the middle, but clearly lukewarm to the whole idea, is FOM, which has stated that it will only hand out a commercial deal to Andretti if its analysis shows it would be accretive to F1 as a whole. While the current teams have no formal say on what FOM's final decision will be, their resistance will likely be a key factor in swaying F1 CEO Stefano Domenicali's final opinion on the matter. And, critical to the negativity towards Andretti, is the fear from some teams that adding an 11th squad to the grid could risk their own future. Williams team principal James Vowles made it clear at the recent Qatar Grand Prix that squads like his were still on the knife edge when it came to finances, so losing prize money and value would not be a good thing. "My responsibility is to 900 employees within my company," he said. "If you go look at Companies House, you can go look it up for Williams, we've submitted it now, you can see that we're lossy. We're very lossy. "In fact, compare it from '21 to '22, you'll see that losses are in the tens of millions more. Compare it to '23, which you won't see but I'll guarantee you, it's multiples above that." But would Andretti's arrival and the subsequent reshuffling of the commercial rights income really have that much of an impact in making things worse, especially if it stumps up the $200 million dilution fund payment first? Here we look at the figures involved to get a better picture of what is at stake. Prize money payments Formula 1's exact prize money split is secret, with its details enshrined in the commercial element of the two Concorde Agreements that effectively govern the series. However, using information that is available in the public domain – including the published accounts of both teams and F1 owners Liberty Media – it is possible to ascertain a pretty good idea of how the commercial pot is split up. The best estimation is that, according to the terms of the Concorde Agreement, the team prize pot is made up of 50% of the overall commercial rights profit that the series generates. However, it is understood that after a certain point of revenue, FOM's percentage share shifts up so it keeps more than half from that figure onwards. It means teams do not always get a straight 50% of the money. In 2022, for example, with F1 generating $2.57 billion in revenue, team payments totalled $1.157 billion, which equates to roughly 45% of the total income. These payments are not shared equally among all the teams, however. First of all, Ferrari continues to have an extra payment for its historical significance, which is believed to be 5% of the total pot. Teams that have achieved success in the constructors' championship in recent years also qualify for a simple bonus (from having won one title) or a bigger payment (for winning two or more). There is also understood to be a separate pot based on extra payments for teams that have finished in the top three of the constructors' championship in the previous 10 years. This currently includes Mercedes, Red Bull, Williams, Ferrari, and McLaren. It is estimated that all these bonus payments account for around 25% of the total prize pot distributed to teams. Once these payments have been made, the rest of the money is distributed among the teams on a sliding scale basis, with the top team getting 14% and the bottom squad getting 6%. With F1's predicted earnings expected to rise by around 8% - 10% annually, it means that team payments totalling around $1.25-1.3 billion can be anticipated over the next few years. The 11th team impact Should Andretti arrive on the grid, then the impact will only be on the pot of money that is distributed after the bonuses for the top squads. So, for simplicity reasons, if we judge that the final payment pot is $1 billion with the extra bonuses that have been taken out, here is how the payments would shift with an 11th team on the grid. Based on a 10-team grid distributing $1 billion, the payout would be as follows based on constructors' championship position. Team prize money payouts for 10 teams based on $1 billion fund Position Percentage Prize money ($) 1 14% 140m 2 13.1% 131m 3 12.2% 122m 4 11.3% 113m 5 10.4% 104m 6 9.5% 95m 7 8.7% 87m 8 7.8% 78m 9 6.9% 69m 10 6% 60m Should an 11th team arrive, then the figures would shift slightly, with everyone's percentage of the pot being reduced. This means that those who got a bigger slice of the pie will stand to lose the most. Projection for 11 teams based on $1 billion distribution Position Percentage Prize money ($) 1 13.3% 133m 2 12.5% 125m 3 11.6% 116m 4 10.8% 108m 5 9.9% 99m 6 9.1% 91m 7 8.3% 83m 8 7.4% 74m 9 6.5% 65m 10 5.7% 57m 11 4.9% 49m Comparing the two tables, it shows that the arrival of Andretti – if the prize pot did not increase – would trigger a $7m loss for constructors' champions Red Bull. The team that finished fifth would lose $5 million, while the 10th placed squad would drop $3 million per year. This loss of commercial income for everybody is why the 2021-2025 Concorde Agreement included the famous $200m dilution fee, which was intended to cover any such losses in prize income for several years. On a basic level and distributed as a straight upfront payment of $20 million each, the dilution fund would offset TV losses across half the grid for some time. And that is before taking into account potential increases in revenue, which could go up by 8% each year anyway, based on FOM's success. Furthermore, in financial terms, having a $20 million upfront payment is worth more than having it spread out over several years. This is especially true when talking about what is known as the discount rate that accountants use to balance the value of income now versus it arriving later. Still resistance But while the year-by-year losses for teams do not look that dramatic, what they do not take into account is the biggest element of concern, which is related to the impact that Andretti's arrival would have on the value of teams. With the current price tag of an F1 operation being around the $1 billion mark, Andretti getting into F1 for just $200 million is something that could potentially set a precedent in dropping the value of the current squads. It is little wonder then that there is talk of the dilution fee being raised to $600m or more in 2026 when the new Concorde Agreement comes out. That may seem excessive in terms of the prize money impact. But, for the current teams, they believe it makes more sense to stabilise the value of those involved in F1 right now. As Red Bull team boss Christian Horner told Sky Sports F1 recently: "I think that when you look at how Audi has come into the sport, they've acquired an existing team and an existing franchise, should it be different for the others? "I think that's where Liberty and the FIA need to get together and come to us with a collective position. Because you can't have one rule for one, and another for others. "Obviously, money makes the world go round. And that's what every team will be acutely sensitive of, and the franchise value being diluted. Suddenly you go from 10 to 11. So, of course, the stakeholders, the shareholders of each individual team will have a concern about that." The key thing for Andretti is whether those concerns are enough to convince FOM to not give it the deal it wants.
Is there a signed agreement between Andretti and GM? And if there is and the AP report about an end-around by F1 to GM is accurate, is that grounds for immediate legal action by Andretti v F1?
Legal action on what grounds. IF GM breaks the agreement to enter F1 with another party, not Andretti thats a GM / Andretti issue. FOM can ask and inquire all they like under no jeopardy of any kind. Asking questions or making proposals is not actionable in most courts lol. Who would be the injured party to begin with if FOM simply makes an inquiry and nothing happens? Andretti is really adept at keeping himself in the press.
I just can't understand for the life of me any fan of the sport opposing a major OEM joining the sport, in partnership with a proven race outfit. More cars makes for better competition. Unless you have a vested interest there is no reason to oppose it. Vijay Mallya was able to connive around for years in the sport, why are the Andretti family such a poor proposition?
The Andrettis claim that their participation would "add value" to F1, but nothing is more uncertain. Who can say that a 11th team would draw more spectators worldwide, bring more TV viewers, and increase substantially the audience.? All that is pie in the sky, and one can understand the reluctance of the present stakeholders to enlarge their number. They are, after all, the ones most likely to lose, and some could be at risk.
More competition doesn't mean more money for the participants. We are talking about 10 enterprises with more of 600 staff each, that made big investments to get where they are, and each risking losing money to accept Andretti? Haven't you read the Autosport article underlining the financial losses they each could suffer ?
Your reasons are all pertinent to those within formula 1. I explicitly said if you don’t have a vested interest I can’t comprehend a reason to oppose it. GM will not settle for AT/Haas performance. They will be better than those teams and therefore introduce better competition.
I think you have the financial impact argument skewed. My take is that the affected ones are the bottom of the grid. Williams, Hass and Alpha Tauri. [I do not include Alfa Romeo/Sauber as they are becoming Audi which means big OEM funding.] The bottom team loses $3 mil and the other 2 lose $4 mil. This is offset by a $20 mil cash payment that means that they are getting pre-paid for at least 6 years. Whether they invest that money in the team or pocket it is an internal decision for the team ownership. If the FOM wants to further appease these under performers then do not give Andretti full distribution of the prize money the first year. As for the talks with GM about switching their partnership to an existing team. Depending upon how it is done and by whom, it could get to a point of interference. Ask Texaco about how that played out against them in the Texas court over their acquisition of Getty Oil.
"A bird in the hand is better than 2 in the bush" I don't believe in the tale that Andretti will bring more competition in F1 overnight. In between, I am quite happy with what he have now, with 5 teams potentially capable of winning races, possibly 2 or 3 the championship. I do not think for one minute that joining from scratch Andretti would be a contender before 5 years for a win, and 10 years for a title. Those who believe that are not living in the real world, or know little about F1. That may be true in a specs series, not in F1. In GP, it's increasingly hard to climb the greasy pole of success. So, no I do not see Andretti to introduce better competition before many years.
ALL the teams would be affected by the arrival of a 11th team, in the AUTOSPORT projection, quite conservative, IMO. The top teams would have even more to lose. I think the $200M dilution fee hardly compensates that.
If we had 26 cars that would be great.... I think the more the merrier. its healthy for the sport, and gives junior drivers more access and chance to grow. the way it is now is just so limited. the grid looks small, and has for quite some time. to the point that many people cant remember the large grids of the late 80's and early 90's... what a pity!
I think both things can be true at once. Andretti is not doing this to lose money just to win a race or championship... they are in this to make money... 100% for sure. Indy Cars is a shadow of its former self... the cars are super ugly, the races boring... the entire thing is engineered for close tight racing to produce a show... the problem is there is no real promotion of the series like there used to be.
I totally agree it wouldn't be overnight, but I think it would eventually come But I see this as a benefit. Haas/AT are wasting grid space, they must adapt and become competitive to survive. The pre payment from the anti-dilution fee puts them in good stead to cover the losses for a few years. After that, sink or swim. This may shake up the stagnancy that has developed in the sport. No one here is genuinely a fan of Haas/AT because they aren't taking it seriously. AT is a side piece for RB to sweeten supplier relationships (Yuki) or test drivers (Lawson/Ricciardo). Haas is a billboard for Haas CNC. No one is accusing them of being pioneering race teams, they are bloated and lazy organisations who are in the sport today because they happened to be participating when a documentary was made. It's bollocks, if you aren't good enough the team should go under and make way for new, exciting teams who will fight tooth and nail to stay there.
