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Is F1 treating Michael Andretti as an Ugly American?


Michael Andretti, son of 1978 World Driving Champion Mario Andretti, wants to go Formula 1 racing.  The sanctioning body says yes, and the commercial rights owner says no, but maybe later.


The decision was controversial and, to American F1 fans at least, extremely unpopular. Now the issue has become theater of the absurd, with heroes and villains navigating through a script centered around ego, power, and greed.


Let’s meet the cast.



Michael Andretti is a former IndyCar champion who raced F1 for almost one season, as Ayrton Senna’s teammate at McLaren in 1993. After retiring as a driver he built a successful racing organization that competes in IndyCar, IMSA, Indy NXT, Formula E, and other series. His team is well-funded and has an agreement with General Motors to provide the new team's engine.


Mohammed Ben Sulayem is the president of the Fédération Internationale de l'Automobile (FIA), the governing body of many auto racing series, including Formula 1.  Early last year the FIA invited prospective new entrants to apply though an Expressions of Interest process.  Four groups applied, but Andretti Global was the only one approved to join the exclusive grid.


Stefano Domenicali is the chief executive of the Formula One Group who made the decision to deny Andretti Global’s application.  He is much like the NFL’s Roger Goodell, the NBA’s Adam Silver, MLB’s Rob Manfred, and FIFA president Gianni Infantino; they work for the owners, not the fans, to grow the business and increase their league's value.


The curtains opened for act one in February 2022, when Mario announced Michael would be applying to become the 11th F1 team on a grid that allows for 12, according to the last Concorde Agreement.


Andretti Global had hoped to purchase the Swiss Sauber Team, which has been in F1 for more than 30 years, but negotiations failed.  The perception is that the Andretti group waltzed into the Sauber headquarters acting as if they owned the place, offering a lowball offer ($350 million) for a majority stake and veto-proof control.


Sauber declined the offer and a little over a year later, Audi invested $650 million for what will eventually become a 75% share of Sauber.


When it became clear there would be no existing team to buy, Andretti started designing their own car toward racing in 2025, despite knowing the rules would change in 2026, requiring an entirely new chassis.  


Still, the Indianapolis-based team began wind tunnel testing, parts production, and recruitment, claiming key personnel from established teams like Ferrari, McLaren, Mercedes, and Red Bull. They currently have over 120 people working on the project.


Then came the most important task in being approved: convincing the existing teams and the Formula One Group (owned by the Englewood, CO -based Liberty Media hedge fund) that an additional entry would be an investment that would benefit all parties concerned.


They had to pitch how a new entry from one of America’s most successful and popular racing organizations would build both continental and international interest and viewership, increasing the chances for F1 to add a fourth race in the United States.  


They had to argue the value of bringing General Motors, the sixth largest car company in the world, to the FIA as a new power unit supplier, for the first time ever.  


Andretti had to convince all the current teams, from Austria, France, Germany, Italy, Switzerland, and the United Kingdom, that an American entry, especially one named Andretti, would help the series increase profitability enough to compensate those teams for having to split their various revenue streams 11 ways instead of 10.


Act two turned out to be an exercise in futility.  Michael and Mario talked, or tried to talk to every F1 team principal in an effort to persuade them to support their effort.


One out of 10 was in favor.  McLaren chief executive Zak Brown said the Andretti entry to Formula One would add value, rather than diluting the grid.


Which brings us to the final act, which sets up a TBD sequel. 


Act Three was Liberty Media saying Andretti’s entry would fail to reach F1's competitive standards, providing little value to the sport, and worse yet, serving as a burden to those currently invested in the sport.


To many F1 fans, American racing fans, and respected insiders, this was a diss too far. It was an indictment against an American racing organization, essentially discounting, without evidence, Andretti Global’s capabilities and integrity.


So to be clear:  U.S. company Liberty Media owns the commercial rights to F1, but a more detailed description would be that Liberty Media leases the commercial rights to the sport from the FIA, which retains the rights to the Formula 1 championship name and ruleset.


Unless, apparently, Liberty Media says otherwise.


This could theoretically lead to a legal challenge by Andretti Global, which would further support the perception of Michael, Mario, and everyone associated with them as ugly Americans.


Liberty Media is valued at $21 billion.  F1 itself is valued at $17.1 billion. Global media rights are expected to top $1 billion this year, reaching 1.4 billion by 2029, according to a recent report by Seaport Research Partners.  Forbes reports that Disney-owned ESPN valued Formula One’s US media rights at around $83 million per year between 2023 and 2025. 


There is more than enough money to go around.


But here’s the rub. Current rules, according to the previous Concorde agreement, dictate that new entrants must pay an anti-dilution fee of $200m to compensate the existing teams.  Those same teams now feel this is insufficient given the current values of F1 teams, which are in the region of $1 billion.


The current Concorde agreement expires at the end of 2025.  That’s when the anti-dilution fee could jump to $1 billion plus.  And the rules could change to limit the number of teams for F1 at 10.


This story isn't over and there's no way to predict the future.

 

But the question remains, is there a bias against a new U.S. team participating in Formula 1?


Or is F1 correct in believing 10 teams is the magic number, and no additional entries should ever be considered?




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