‘It is about the money’: Andretti’s uphill battle to join the F1 grid

A few days after approving Andretti’s entry to join the Formula One grid on technical, sporting and financial grounds, FIA president Mohammed Ben Sulayem said he is “optimistic” that F1 itself will allow Andretti to become its 11th team. But given the number of issues involved and the clear opposition of the current teams, it will take more than a good feeling to expand the F1 grid.

Andretti has an established racing pedigree in championships such as IndyCar and Supercars, and has agreed a partnership with GM brand Cadillac to support its entry bid. It is investing in a new racing headquarters in Fishers, Indiana, and would also look to establish a satellite F1 base in Europe.

With FIA approval secured, the final decision now lies with Formula One Management (FOM), who will enter commercial discussions with Andretti in the coming months.

Senior F1 figures including CEO Stefano Domenicali and Greg Maffei, the CEO of F1’s owner, Liberty Media, have previously been lukewarm about expanding the grid. And while the teams have no official say in the matter, all 10 have expressed concern about adding to the grid, fearing it could cause financial instability.

In a select media roundtable including The Athletic in Qatar, Ben Sulayem said while he understood the view of the teams, he felt their concerns were solely down to financial considerations.

“Let’s not play a game here,” Ben Sulayem said. “It is about the money.”

Why the teams are against Andretti

All teams rely on prize money revenue from F1 to support their racing operations, meaning if Andretti were to join, the pool would be split between 11 teams instead of 10.

Andretti’s job in the coming months will be to argue that its addition will more than make up for that reduction in returns. If it is accepted, it must also pay a $200 million dilution fee that is split between the 10 teams, as per their commercial agreement with F1, known as the Concorde Agreement.

But most believe this is not enough to make up for the financial hit that they claim could lead to instability, and would like to see the fee tripled under the next Concorde Agreement, set for 2026.

“Williams is against the addition of an 11th team, and very strongly against,” said team principal James Vowles.

Vowles explained that Williams, who finished last in the championship in four of the last five years, was running losses in the “tens of millions” as it invested for a more competitive future and that the team was not alone in making this kind of financial commitment.

“It should be known it is not just us that are not financially stable,” Vowles said. “I’d say probably half the grid aren’t.”

The $200m was set prior to F1’s commercial boom in recent years that has transformed the sport and boosted the worth of the teams. When Williams was sold to Dorilton Capital in 2020, it went for $200m. Earlier this year, when Ryan Reynolds and Rob McElhenney’s group took a minor stake in Alpine, the team was valued around $900m.

The existing teams want their patience and commitment to F1 over the years to be recognized. For Andretti to join the grid for $200m and immediately have an asset that could be worth close to $1bn would leave a sour taste for those who have stuck around and invested heavily into the sport for so long.

“All the teams on the grid, they made a big effort,” Fred Vasseur, Ferrari’s team principal, explained. “We have to keep in mind that three to four years ago, we had almost half the grid quite close to bankruptcy. We have to avoid to be arrogant.”

These concerns have already been met with a dim response by Michael Andretti, who hit out at teams for their “greed” earlier this year, saying they were “not looking at what is best for the overall growth of the series.”

Would expansion cause instability?

As Vasseur notes, it was not very long ago that stories about teams potentially going out of business were a yearly occurrence.

All three teams that joined in 2010 — HRT, Caterham and Manor — went out of business within six years. The most recent F1 team to fold was Force India, which entered administration midway through the 2018 season before a takeover by Lawrence Stroll’s consortium saved the team, which now races as Aston Martin.

The Covid-19 pandemic also hit the smaller teams hard. Haas team principal Gunther Steiner said that when F1 suspended racing, as many as four teams were unsure if they would be competing the following year.

“We were all struggling, trying to keep alive,” Steiner said. “A lot of people and a lot of team owners have put their money into it to stay alive, and to make F1 what it is now. And I think there is value to that as well.”

While teams can seek added investment from their backers, Steiner said the income hit from an 11-way prize money split would need to be made up somewhere.

“If you lose 10% of that, you have to find it somewhere else,” Steiner said. “Whether it’s an investor or a sponsor, it’s still work we have to do.”

The president’s counterpoint

Ben Sulayem argued that expanding the F1 grid could “add value to the sport” and make it more sustainable. The FIA’s F1 regulations allow for up to 12 teams, something he feels he has honored by opening up the expression of interest process at the start of the year.

While this drew interest from a number of teams, including F2 operation Hitech and New Zealand-based Rodin Carlin, only Andretti could promise any kind of manufacturer ties — something Ben Sulayem thought was important.

Another question is whether F1 would be able to cope with an extra team from a sheer numbers point of view.

“When you look at qualifying sessions, already now we’re looking like on a go-kart track, we’re tripping over each other,” Mercedes boss Toto Wolff said in July. “There is a safety concern: We haven’t got the logistics, where to put an 11th team.” A track like Zandvoort in the Netherlands, with a tight pit lane and small garages, has been cited as somewhere that may struggle to accommodate another team.

Ben Sulayem did not buy this argument. “We are running now 11 teams for Hollywood,”  he said, referring to the full garage setup in place at tracks on weekends for the filming of Apple’s F1 movie. He also said that any circuit approved by the FIA to host F1 must be able to house up to the 12 teams that are permitted under the regulations.

The added value question

If teams were guaranteed that adding Andretti would boost F1 revenues and therefore prize money, they would be open to the idea.

“I’ve always said if it can be demonstrated that nothing is going negative for anybody, let’s talk about it,” said Steiner.

Andretti’s challenge now is to prove it would, in fact, deliver that boost. In its statement after the FIA’s announcement, Andretti made reference to “heightening enthusiasm for F1, globally.” Demonstrating it will be additive and grow the fanbase would support its commercial case.

Ben Sulayem claimed a rise in F1’s share price in the wake of the FIA’s approval showed the team would bring that value. According to marketwatch.com, the F1 share price (FWONK) rose from $62.39 on closing on Sep. 29 to $67.80 on Oct. 2 when the Andretti announcement was made, an 8.7% bump.

“We should make sure that a team is accepted because they add value,” said Ben Sulayem. “They add value to the FIA when it comes to sport and sustainability of the sport and the business, and add value when it comes to the commercial side. It was proven to me only that the share price went up.”

At a time when F1 is bigger than ever in the United States and has three American races, what Andretti would do for that fanbase is a focal point. Andretti has said it will race as an “all-American” F1 team, promising to place at least one American driver in a seat. The current plan is for this to be Colton Herta, who races for Andretti in IndyCar and would have got an F1 seat with AlphaTauri this year had he been eligible for a super license.

Ben Sulayem said it was a “dream” to have an American driver in an American car, but some of the team principals raised doubts over how much of a boost this would really have.

“We have already a 10th team that is American, that is Haas,” said Ferrari boss Vasseur. “We have an American driver (Logan Sargeant) on the grid. The question for me around that, is what could be the added value?”

Could GM build an engine?

When Michael Andretti first came to the FIA in 2022 and expressed his interest in establishing a new F1 team after his plan to purchase Sauber fell apart, Ben Sulayem told him he needed to find a manufacturer.

“We challenged Andretti,” said Ben Sulayem. “The first time, I said no, unless you have someone with you. And then I spoke to Stefano, I said, ‘what do you think?’ and he said, ‘they don’t have (a manufacturer)’ and I said you’re right, let’s make sure they have.”

That turned out to be GM, through its Cadillac brand. F1 prides itself on the number of car manufacturers who are on the grid. From 2026, the existing quartet of Ferrari, Mercedes, Honda (who made Red Bull’s engine) and Alpine will be joined by Audi and Ford, the latter linking up with Red Bull Powertrains.

Andretti’s argument is that bringing in a great American carmaker to F1 is a good thing for the series’ stability. The more manufacturers at the table, the better.

While Cadillac has committed to technical support of the Andretti F1 operation, it won’t be building its own power unit, meaning the team would need to take a customer engine at least to begin with. Its involvement would be more akin to that of Alfa Romeo, who enjoys title sponsorship and some technical crossover with the Sauber-run team without the kind of investment a full F1 engine project requires.

If Andretti was coming forward with a fully-fledged GM engine project, like the one Audi is doing, the reaction would likely be quite different. F1 would likely be much more receptive to the idea.

But Ben Sulayem expressed his confidence that GM would eventually embark on a full power unit project in F1. He said it was something the FIA was discussing with Andretti.

“I am optimistic (about) GM coming with a power unit,” Ben Sulayem said. “I am very optimistic, not just optimistic, and you will see.

“In the last 20 months, to have two major OEMs which are Audi and Andretti-GM, and to have a power unit from Audi, and we are on the right track of having a power unit from Cadillac — I think that is an achievement.”

The political battle ahead

F1’s championships may be settled for 2023 with five grands prix to spare, but the coming months will be incredibly important for the sport’s future.

It is now down to F1 to go through its evaluations and considerations with Andretti. While there will be no interference from either the FIA or direct input from the 10 teams, all parties have made their views clear, and will surely continue to do so.

If F1 were to reject Andretti, it is unlikely to be a case that would go away quietly. It would result in outcry from some corners of the fanbase who are eager to see more cars on-track and opportunities for young drivers who may currently miss out with only 20 seats available. There could even be legal action if Andretti feels it has been treated unfairly.

For the FIA to say yes and F1 to say no would also raise questions about the process and the relationship between the two sides — one that has already shown signs of tension in recent years.

Asked by The Athletic what that eventuality would do to the relationship between F1’s regulator and its commercial rights holder, Ben Sulayem replied: “It won’t break it between us.”

For all of Ben Sulayem’s optimism, right now, no one from F1 or the teams seems to share his enthusiasm about Andretti’s bid to join the grid. And it will take a very convincing argument to change that in the coming months.

Whatever the final decision is on Andretti, the fallout is not going to be quick or quiet.

(Lead photo of Stefano Domenicali and Mohammed Ben Sulayem: Clive Rose/Getty Images)