'Andretti is serious about a bid to bring a racing dynasty into F1': Mark Hughes
There’s a dissatisfaction brewing between Formula 1 and the FIA. And it is about money. And it is colouring everything. As always in such matters, personal dynamics assume huge significance and those between Mohammed bin Sulayem and Stefano Domenicali are key. Ross Brawn, John Elkann and Dietrich Matesitchz will play into this too.
It’s difficult not to see the current petty stand off about drivers wearing jewellery with Lewis Hamilton as a proxy argument between FIA president bin Sulayem and F1, with Hamilton caught in the crossfire. It’s about establishing authority and control. Hamilton’s initial reaction was to text the president saying he wants to be a positive force and to work together – the subtext perhaps being, ‘don’t pick a fight with me’. If that particular spat escalates, one can imagine Hamilton countering with ‘if we are going to apply the rules to the letter, will that include a revisit to the season finale of last year?’ An empowered free-wheeling global figure isn’t likely to respond well to an authoritarian approach.
Neither will Liberty. These are the currents and undercurrents. The FIA is looking for a greater income from F1. Liberty Media, as well as being unimpressed with how the FIA handled the Abu Dhabi race last year and the aftermath, is looking to recoup the losses incurred during the first Covid season of 2020. It provides more than half of the FIA’s income. The question of whether Liberty actually needs the FIA is being seriously asked.
In the middle of all this Michael Andretti is making a serious bid to bring a racing dynasty into F1 – and finding his way blocked. Having failed to buy Sauber because of a big difference in opinion in what the team was worth, he’s now trying to enter as a new team from 2024 and was in Miami pleading his case.
But he’s walked into these volatile currents. And it’s not only between Liberty and the governing body. There’s some tension too between the teams and Liberty. With the Liberty business model now an NFL-like one of teams as franchises in a flourishing business, the existing outfits don’t want to slice the cake 10% thinner to allow in a new team. If Liberty wants a new team, they counter, then Liberty – and not the existing teams – should pay for it.
“We have had 10 entries today,” says Toto Wolff. “We divide the prize fund among those 10 entries. We have invested considerable amounts over the last 10 years. I mean, each of the organisations that’s sitting here on the podium has probably put more than a billion into the Formula 1 projects over the years, so it needs to be accretive.
“If a team comes in, how can you demonstrate that you’re bringing in more money than it’s actually costing? Because an 11th team means a 10% dilution for everybody else. So, if one is able to demonstrate that [the new entity would bring more to F1 than that], then we should all be sitting cheering for such an entry. But that hasn’t been demonstrated yet. And that may sound dry, because it comes down to the numbers, but the value of Formula 1 is that it’s a limited amount of franchises. And we don’t want to dilute that value by just adding teams.”
Christian Horner: “Theoretically, it should be a Liberty issue to address if they want new teams to come in. And to expand the number beyond 10, then fiscally, it was always going to come down to a question of how does that affect the distribution of the prize fund? So, money is ultimately going to be a significant factor. Ultimately, I see a question really for, you know, for the promoter [Liberty], that if they want more teams, they’re obviously going to have to dilute their share of the fund, because it would be unfair to expect the other teams to pay for the additional new entrants to come in indirectly. So that’s always going to be the conflict you have. I think it’s great that there’s the interest from both OEMs and a brand like Andretti. It’s a great name. But it’s Liberty’s business model that they need to work out for the future.”
The Concorde Agreement has within it the facility of a $200m (£165m) ‘anti-dilution fund’ for this eventuality. But it’s inadequate. Spread between the 10 teams, it would cover about two years’ loss of earnings for a top team. After that it would be worse off.
“This is the first time in memory that we’ve got 10 healthy franchises, 10 healthy teams,” says Horner. “Now they’re in a position where they can actually plan for the future, they can look forward rather than just being in the present. Two-hundred million is a significant amount of money. But you know, in this business, and when you divide it by the participants, it doesn’t go a long way. And it’s a one shot. It’s not $200m every year. So, you know, at the end of the day, a conversation like this will always come down to economics.”
Yes, F1 cannot stay in stasis for any length of time. Conflict between governing body and the commercial rights holder was briefly a thing of the past when Liberty and Jean Todt reached an accommodation. There’d been an Ecclestone/Mosley happy partnership before that, but with the teams frequently at war with them both. Liberty changed that, saved the teams from themselves with the cost cap and helped keep the FIA funded in the process.
But now? More is never enough.
Since he began covering grand prix racing in 2000, Mark Hughes has forged a reputation as the finest Formula 1 analyst of his generation
Follow Mark on Twitter @SportmphMark