I never thought I’d write words to this effect, especially as a journalist who desperately wants to know as much as possible all of the time, but: Michael, for your own sake, please just stop talking.
It has been a rollercoaster week regarding Formula 1 interest in the United States, triggered by with Mohammed Ben Sulayem’s tweet that he wants to open up Expressions of Interest from prospective new teams. That led to the big news about the Andretti Cadillac project through the partnership with General Motors, and there was optimism.
That optimism came from the fact that Andretti had – on the face of it at least – ticked the biggest box lacking from his previous entry bid. Having a major global manufacturer behind the project was huge, and he clearly had the FIA’s support, even if Ben Sulayem wasn’t saying that automatically meant approval for the team.
But F1 as a sport was less effusive. No teams made any public statements, while F1 itself said “there is great interest in the F1 project at this time with a number of conversations continuing that are not as visible as others” and reminded everyone that “any new entrant request requires the agreement of both F1 and the FIA.”
The lack of a clear push from behind the scenes to let Andretti in clearly angered Ben Sulayem, because he then put out another tweet criticizing what he described as an adverse reaction, though there hadn’t really seemed to be one at all.
And Andretti soon followed with a pretty explosive set of quotes in an interview with Forbes this week, accusing the teams of being “very greedy” and “not looking at what is best for the overall growth of the series.”
Part two might have been accurate, but part one could even be labelled as hypocritical. And neither needed saying.
Andretti is a racer, his family is full of them, so I don’t doubt that a huge driving force behind his desire to enter F1 is simply to compete in the championship. But he’s also not an idiot, and neither are the backers from Group 1001 and GM, and the potential value of being an F1 team now and moving forward is not lost on any of them. It’s not just a sporting decision, it’s a business one, too.
So is the thinking behind the response from F1, and more specifically, the current teams.
The biggest question I get from readers is, ‘What has F1 got against Andretti?’, completely overlooking the fact that just because the sport hasn’t gone crazy at the prospect, it doesn’t mean it’s specifically against it. But it won’t give a team an entry purely on the basis of it publicly saying it wants one, and has actually warned Andretti against trying to go about it in that way.
It’s not a warning that has been heeded.
Just because boxes appear to have been ticked doesn’t mean they all have to the desired degree. It’s like a job interview when you have to prove you have the skillset and experience to go with a title, and F1 is digging deeper into the GM aspect of the project. A Renault power unit renamed Cadillac isn’t a bad thing by any stretch, but it’s not as compelling or as significant a commitment as making your own power unit components…
And if F1 has other manufacturers showing interest – such as Porsche on the Volkswagen Group front – and laying out more involved plans that make a short-term exit less likely than a simple sponsorship deal, then you can see why Andretti and GM don’t necessarily have it all sewn up on the OEM front, even if Michael insists it wouldn’t be a badging exercise.
That’s of less concern to the teams themselves of course, who are simply protecting their position, just as Andretti is. The existing teams have been through peaks and troughs in F1, under multiple owners and amid financial crises and pandemics. The $200 million anti-dilution fee was agreed under the new Concorde Agreement in 2020, at a time when so many teams were struggling enormously and facing very real threats of disappearing.
It had to be a figure that was attractive to the existing teams then but not off-putting to prospective entrants. It achieved both, boosting the value of those on the grid and still leading to Andretti’s interest.
But since then, revenues have grown significantly, commercial interest in the sport has boomed and the teams are worth a lot more. In fact, they’re worth so much that in the end Andretti couldn’t afford Sauber at a price that got him full control (as late as those goalposts appeared to be moved, to be fair).
There is space to expand, but any new team certainly has to pay to join a very select group that has played a critical part in making the sport as attractive as it is today. The teams now think they should be paid anything between $400m and $700m (so, $40m-$70m each) depending on who you speak to.
Sound excessive? Let me repeat the stat I gave in a Mailbag answer this week: The most recent expansion team in the NFL is the Houston Texans. When it was approved in 1999 – by the existing team owners – before an entry in 2002, it came with a $700 million price tag. That’s worth $1.25bn today. And that was to become one of 32 teams at the time. Not one of 11 or 12.
So, yes, it is about money, but in exactly the way a successful sports business works. And it has been pretty successful under Liberty Media, which is exactly why there’s such a strong desire from Andretti, Group 1001 and GM to be involved.
I really want them to be involved – believe me, I do – and this isn’t at all a reflection on the impressive ingredients that are in place and ready to be mixed, but I also get that there is far more too it all than just the desire of those behind the project. Andretti needs everyone onside if he’s to be successful in getting a team on the grid, and hitting out at the existing constructors was a big mistake.
Had he not done so, he might have found teams more willing to negotiate on the compensation they want that hits the sweet spot of immediate payment, increased franchise value and a stronger grid overall.
Instead, even with GM’s partnership, he’s on the back foot even more than he was when he only got McLaren and Alpine to sign a letter of support in Miami last year.
That approach led to Domenicali’s warning, and he’s further alienated the project from the F1 CEO by backing Ben Sulayem and talking up his influence. He needs approval from both, so needs to talk up both.
Or, the safer way, not talk at all.