Thanks to the agreement signed a few years ago, Formula 1 had imposed an entrance fee for new teams of 200 million dollars. A figure that, apparently, could have seemed particularly high if you think about what you have to add the costs to create the team, the structures and the means, but which in the perspective of the existing teams would have been redistributed by compensating for the lost income with the addition of a new stable.
The increase in ratings that Formula 1 has experienced, as well as the arrival of new sponsors, has meant that the teams receive more income from Liberty Media. However, with the arrival of another team this amount would once again decrease, an aspect that has made many turn up their noses.
This is why several teams have pushed for a revision of this pact, bringing the figure to around 600 million, three times the current amount. It is no coincidence that Andretti has tried to acquire Sauber directly before moving towards an alliance with Cadillac, with all the doubts of the case that have emerged from the existing teams precisely because of the economic question.
Speaking on this speech, the chief executive of Formula 1, Stefano Domenicali, gave the strongest hint that the cost of entry for new teams could go towards a sharp increase. Incumbent teams have lobbied for a new figure that effectively equates the cost of entry to the theoretical value for acquiring an existing team, the value of which has clearly increased with the recent media boom experienced by the club. sport. For this there was talk of figures up to 600 million dollars.
Domenicali, who has always maintained that any new team must add value to the sport, stressed that times have changed since the original figure was agreed. “The process for accepting another team has been initiated by the FIA,” Domenicali told Formula 1 investors, referring to the FIA’s initiative that opened up entries for a new team.
“In our governance, in our Concorde, there is the possibility of doing so. But the evaluation must be done together to see from a technical point of view, from a sporting point of view, for financial stability and to make the general picture, if a new team will give value to the championship, to sport, and there will be a different position.”
Stefano Domenicali, CEO of Formula 1
Photo by: Simon Galloway / Motorsport Images
“And I’ll come back to one point: the so-called anti-dilution payment was made at $200 million, just a couple of years ago. Because at the time, no one would have expected that the value of this business would increase so much. Today the situation is totally different. And it is our duty to make sure that we protect the business in the best possible way and that we have a bigger picture,” added Domenicali, underlining how the original figure had been agreed at a time when sport had not yet reached the current success from the media point of view.
Although the offer from the Andretti-Cadillac alliance is the most well-known, Domenicali stressed that several potential new competitors have expressed interest in a possible participation in the championship.
“Today there are many who want to come. There are teams that make themselves heard more than others, some are much more silent, but they are really expressing their interest.”
Andretti and Cadillac have announced an alliance to convince Formula 1.
Photo by: Andretti Autosport
“As always in life, someone has to make an assessment. And we’re part of that process, and we’ll be doing the right thing at the right time throughout this year.”
Liberty Media CEO Greg Maffei supported Domenicali’s position and underlined how the value of the teams has increased over the last few years, which is why a serious and reliable investor must be sought, citing the fate of the Manor, then went into receivership after several changes of ownership.
“Let’s go back to the $200 million point,” he said. “Manor were the 11th team. And just before we entered F1 (at the end of 2016), they went into receivership in the UK and were sold for £1. The world has changed dramatically.”
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