Insider: What Andretti Global's FIA approval means for joining the Formula 1 grid
Andretti Global has passed the first monumental step in joining the Formula 1 grid as soon as 2025.
It comes nearly two years after Michael Andretti’s 11th-hour deal to purchase a controlling stake in the Alfa Romeo F1 team fell through, 20 months after Mario Andretti told the world of his son’s plans to enter the pinnacle of motorsports with an expansion franchise and 30 years after the younger Andretti’s own F1 driving career flamed out after just 13 races.
The toughest test, however, still remains.
On Monday, the FIA announced that Andretti Formula Racing LLC was the sole application it approved and sent to FOM (Formula One Management) for further consideration in expansion of what is currently a 10-team grid. The expressions of interest process received more than a half-dozen inquiries and a second, more rigorous application and interview phase included four programs.
"The FIA has applied a robust process of due diligence, during which the applicants were assessed on their sporting and technical ability, the ability of the team to raise and maintain sufficient funding to allow participation in the championship at a competitive level and the team's experience and human resources," the FIA noted in its release on the news. "Selection criteria also included sustainability management in line with the FIA's ambition of achieving the sport's goals for net-zero by 2030.
"Any prospective F1 team was also required to illustrated how they intend to achieve a positive societal impact through its participation in the sport."
Added FIA president Mohammed Ben Sulayem.: "Andretti Formula Racing LLC was the only entity which fulfills the selection criteria that was set in all material respects. I congratulate Michael Andretti and his team on a thorough submission.”
On Jan. 2, the FIA president tweeted that he’d asked his team to look into launching an expressions of interests process toward potentially expanding the F1 grid in the near future. Three days later, in the wake of Andretti Global’s announcement of its partnership with General Motors to promote the Cadillac brand, Ben Sulayem said he “welcomed the news” of the pair’s partnership.
With few specifics to offer as to GM and Cadillac’s level of involvement, several team principals voiced their displeasure through paddock media channels, denouncing what they called Cadillac’s “badging exercise.” To several teams, the luxury car brand appeared to be prepared to throw its sticker on an already existent manufacturer’s product and use the F1 brand to raise its status in the racing and automobile worlds – an assertion Andretti has long denied.
“The FIA has accepted the entries of smaller, successful organizations in recent years,” Ben Sulayem tweeted Jan. 8. “We should be encouraging prospective F1 entries from global manufacturers like GM and thoroughbred racers like Andretti and others.
“Interest from teams in growth markets adds diversity and broadens F1’s appeal.”
2022 served as momentum-building year for Andretti
After not becoming one of F1’s 10 current team owners in the fall of 2021 when Andretti balked at the idea of paying a controlling price for Alfa Romeo without receiving the controlling interest in return, he and his father formed a plan to launch a new team named Andretti Global that initially gained traction through the sheer force of the court of public opinion. The elder Andretti announced its existence with a single tweet in Feb. 2022, telling IndyStar at the time that the team had filed some form of paperwork with F1 and had plans to build its cars out of its central-Indiana homebase.
Without any true formal application filed, F1 teams largely balked at the news and said Andretti needed to offer solid plans before he could be taken seriously.
Three months later, Michael, Mario and Andretti Global’s backers touched down in Miami for the debut south-Florida F1 race with hopes of meeting with every team and garnering their public support. Michael went as far as printing out a makeshift petition at the Miami Dolphins facility – the hosts of the race weekend – and carrying it from hospitality suite to hospitality suite.
Those face-to-face conversations only produced two signatures, Laurent Rossi (the then-CEO of Alpine, Andretti’s presumed lineup engine manufacturer) and Zak Brown (McLaren Racing CEO and longtime Andretti partner and friend).
But Andretti began hiring engineers and management personnel and in August of 2022 unveiled plans for a 575,000 square-foot, $200 million Taj Mahal of a new racing headquarters in Fishers. Construction began in December, though it’s currently understood to be stalled due to an ongoing lawsuit filed by the projects design-builder against the project manager.
Andretti opponents steadfast: 'Our position is clear: buy a team'
Andretti’s opponents in the F1 world turned their ire to the claim that any new team would fail to generate enough new revenue to make up for splitting the pot 11 ways instead of 10. Presently, there's a $200 million anti-dilution fee under the current Concorde Agreement that binds the teams, F1 and the FIA together – essentially a ‘joining fee’ split with the existing teams to make up for their first couple years of lost revenue due to a smaller percentage of the prize pool.
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At the time it was agreed upon, Williams F1, one of the most storied programs in the sport, had fallen on hard times and just sold for $180 million, so $200 million was seen as roughly the price of entry. That notion, though, came just as the sport began to explode in the wake of Netflix’s ‘Drive to Survive’ phenomenon that sparked rapid growth in the U.S. and helped plant the seeds for three races in the U.S. and five in North America in 2024.
This summer, Hollywood actor Ryan Reynolds headlined an investor group that purchased a 24% stake in Alpine, which has run in the middle of the pack and is currently 6th in the Constructers Championship. The new minority stake for Reynolds and company valued Alpine at $900 million, with F1 CEO Stefano Domenicali saying at the time that some teams were turning down $1 billion offers for full control.
The sale further solidified teams’ belief that its current anti-dilution fee is nowhere near a reasonable bar for entry – with most suggesting a fee hike to $600 million or $700 million.
For some, not even that would be enough.
“Our position is very clear: buy a team,” Mercedes team principal Toto Wolff told reporters at this year’s British Grand Prix. “There is no mature sports league in the world where you can say, ‘I’m setting up a team and joining, thank you very much for making me part of the prize fund.’ You have to qualify. You have to go through the ranks. You have to showcase the commitment to the championship that we’ve done over the many years, and so far, what we’ve seen hasn’t convinced the teams, though we haven’t seen the applications and submissions that were made to the FIA.”
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Those against Andretti’s bid also worry that it’s impossible for Andretti Global, or another prospective entry, to be additive enough in a sport where annual revenues have increased by nearly 50% from 2018 ($1.827 billion) to 2022 ($2.573 billion) – with two years of setbacks during the pandemic in the middle, no less.
Amidst the criticism, Andretti fired back in January, telling Forbes that teams were “all about greed and looking out for themselves and not looking at what is best for the overall growth of the series." He has since stated he regretted using the word “greed” and that he could understand teams’ financial concerns. “But I think once everything goes public and people see what we submitted, they’ll understand (GM’s involvement).”
Lucky for Andretti, teams hold no official vote in the final step of their admittance process, with the responsibility solely resting on the shoulders of Liberty Media, the owners of the sport that controls its commercial rights. Presently, Andretti technically has the green light to join the grid but lacks FOM’s blessing. Joining without that blessing would be more than foolish.
And though the issue hadn’t reached his desk until now, Stefano Domenicali, the F1 CEO, has frequently argued that the sport simply doesn’t need to expand to continue on its healthy, successful, profitable path.
“I think 10 teams are more than enough to create the show, the business and the attention that we want to see on-track,” he told reporters in June, going so far later on as to say it was his own personal opinion not to see the grid expand.
McLaren's Zak Brown paints different picture
Presently, the Concorde Agreement also allows for as many as 12 teams on the grid, which Brown, the McLaren Racing CEO, said this month should be all the more reason for “the right team” to be awarded entry.
“It has to be the right team with the right resources, and if they pay the right franchise fee – let’s say it’s $700 million – then I get $70 million. The dilution of an 11th team is about $10 million a year, so if I get ($70 million), it will cover me for seven years,” Brown reasoned. “And if it costs $700 million just to enter, that adds $700 million more in franchise value, so whatever (McLaren F1) is worth today, pick a number, $2 billion, now I’m worth $2.7 billion.
“And if you have an 11th team, the scarcity is even greater because there’s only room for 12. As soon as there’s 12, now you’re sold out, and that drives the demand up.”
Additionally, Brown also argued that, should General Motors sponsor a race or spend significant funds on suites or other marketing, 70% of that money filters back to the teams, “and at the right franchise number, I’m not getting diluted."
“If someone’s prepared to pay the right franchise fee, if it’s a qualify racing team, if we know who they are and where their money is from and they’re bringing an OEM, then I don’t see it as diluting," Brown said. "I see it as additive.”
Waiting game continues
In response to Monday’s news, FOM released a brief statement that didn't mention Andretti Global by name and simply acknowledged that it was now in charge of “conducting our own assessment of the merits of the remaining application.”
Andretti’s hope for success lies in the particulars of that application, which hasn't been made public. That makes it difficult to gauge his chances.
How dug in is Domenicali, or are his frequent statements this summer public bargaining ploys? How much can the vote-less teams influence Domenicali and company? And if Andretti receives a ‘no’ from FOM, are there avenues through the European legal system, as has been suggested, that might guarantee them eventual admission?
In a few weeks, we should know.
“I think in the right set of circumstances, we would work to get the 11th team – somebody who could bring a lot of value to the sport, a lot of value to the fans, because of their position in technology, their position as an OEM and their position in marketing,” said Liberty Media president and CEO Greg Maffei this summer. “You could imagine coming to some kind of agreement with them.
“But it’s not without controversy, certainly among the 10 teams.”
This article originally appeared on Indianapolis Star: Andretti Global lands FIA approval in F1 expression of interest process
