Michael Andretti recently upped the stakes in his attempts at taking his team Andretti Global into Formula 1 with the announcement that GM was part of the bid and the intention would be to race under the Cadillac brand. Yet still, F1’s response to the idea can only be described as lukewarm at best. It’s a complex subject and the root of it, as ever, is money.
Since Liberty took ownership of F1’s commercial rights from Bernie Ecclestone we have entered the era of teams being franchises in the F1 business. Without having actual equity in the business, the existing 10 teams share between them around 60% of F1’s profits. In the era of the cost cap and F1’s commercial expansion, this makes them valuable entities.
The value of any one franchise will be a function of the size of F1’s profits and how many other franchise holders there are. In their agreements with Liberty, the existing teams have a certain amount of protection regarding new entrants. Under the current Concorde Agreement any prospective new team must provide an ‘anti-dilution fund’, $200m which is distributed between the existing teams.