It has been a big week of investments in Formula 1, and while none of them involved Andretti Global, they are likely to have a big impact on Michael Andretti’s hopes of joining the sport.
Let’s rewind back to late 2021. Colton Herta had been in the Sauber simulator and a deal looked on the verge of being completed that would see Andretti take over the Alfa Romeo team. Then there were disagreements over who would retain control amid the investment, and it all fell apart.
A few months later, Mario Andretti made sure the embers of those F1 hopes were not dying out, re-igniting the flames with the revelation that his son was preparing to do it all on his own following the Sauber shunning, and seeking a spot on the grid with a new entry.
At that point, it looked like the rules were clear. $200 million was the buy-in amount — an anti-dilution fee agreed in 2020 between F1 and the teams to compensate for any lost share of revenues that a new team would result in — and there were spaces on the grid available if the FIA opened up a process to allow one to join.
If we rewind even further — to that 2020 Concorde Agreement — the $200m figure was viewed as massive deterrent to any potential new team, and the initial reaction was that it had created a closed shop. Teams insisted it hadn’t, and 18 months later it was already looking like a fair price to an interested party.
The frustration that Michael Andretti (pictured above) had when his plans with Andretti Cadillac were announced earlier this year was that opposition from the majority of the existing 10 teams was “all about money”– and he was right. Whether or not it was also “greed,” as he mentioned at the time, was up for debate then, and has this week been shown to not be correct.
Not that I’m further criticizing Andretti for comments made six months ago with the benefit of hindsight now — you can certainly understand his point. As F1 and the teams started suggesting half a billion dollars or more was going to be a reasonable entry point, it was hard to fully know if they were simply gatekeeping or naming a fair price.
Alpine’s latest investment that values the team at around $900m has shown now that it was the latter. Don’t forget that figure is only for the Enstone-based racing team and does not include the power unit company that operates separately out of France. Buying a whole F1 setup in that sense would cost comfortably more than $1 billion, in valuations that have risen rapidly since the COVID pandemic.
And that’s why the $200m entry fee that is written into the Concorde Agreement is something that won’t be accepted by the teams or F1 at this stage.
That agreement expires at the end of 2025 — and as it covered the period from 2021, it means we’re actually only halfway through its lifespan – but to try and provide a very clear, agreed price for any new team, F1 wants to get a new version of the Concorde agreed as quickly as possible, and one that would kick in with immediate effect.
But it’s not only the price of an entry that could be going up three-fold in the coming months — the demands on that entry continue to get higher, too.
Hitech Global Holdings Ltd — the holding company for Hitech Grand Prix — confirmed on Monday that it is one of the teams that has submitted an application to the FIA to join the grid in 2026. It joins Andretti and Formula Equal as confirmed applicants (though there are believed to be more), and all three have very different approaches.
At this stage, you’d have to say Andretti holds an advantage over the other two with the January announcement of General Motors’ support, even if Wladimir Kim’s investment in Hitech and Craig Pollock saying Formula Equal will be backed by a Gulf state suggests money won’t be an issue for either of them.
But many have long made it clear to GM — through multiple discussions — that its involvement would need to be more than a simple badging exercise to really move the needle.
Liberty Media CEO Greg Maffei might have sounded more positive about an 11th team than F1’s Stefano Domenicali in a recent interview on the Walker Webcast, but his comments that Ford could be the American OEM that he feels would be positive for the sport came with the caveat that even the Dearborn-based automotive giant would have to increase its input beyond the planned hybrid system support to Red Bull Powertrains.
“Ford is invested in the Red Bull engine process and it’s not inconceivable Ford could get a bigger role,” he said. “There was certainly talk that General Motors were interested around the Andretti bid for an 11th team, and I think there’s reasons to think that could come about.”
Reading between the lines, he suggests GM’s going to need to exceed Ford’s level of involvement to catch the commercial rights holder’s eye, and that’s assuming the Andretti Cadillac is put forward as part of the process.
We’re now at the stage where the FIA is combing through the detail of all of the submissions from new teams, with no firm deadline being kept to on when it might recommend any suitable entrant to F1 to consider. During that review phase, questions will be asked of all the interested parties to ensure they reach the required criteria relating to aspects such as technical capabilities, funding, experience and personnel.
Bringing it all together as one potential new entity is a massive ask for anyone. Even if Andretti looks closest to being able to meet them at this point, F1 now has the examples in terms of both firm existing team valuations and recent partnership deals to stand by its high demands.
