Andretti facing biggest hurdle in F1 entry bid

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Andretti Formula Racing LLC, the name under which the FIA has
accepted Andretti's bid to join , has, in effect done the
easy bit. Following what the FIA described as a “comprehensive
application process”, analysing the sporting, technical and
financial merits of four prospective entries, only Andretti has
moved onto what is known as Phase 3. Phase 1 was the initial
‘Expression of Interest' process back in January, with Phase 2
being the FIA's deep evaluation of the plans to see if any
candidate team was worth forwarding onto the final phase. This
involves thrashing out commercial terms with the Commercial Rights
Holder (CRH) which is Formula 1 itself. In response to the FIA's
announcement, 's response was rather lukewarm. The one-sentence
statement simply said: “We note the FIA's conclusions in relation
to the first and second phases of their process and will now
conduct our own assessment of the merits of the remaining
application.” As far as the FIA is concerned, Andretti has met all
the criteria a prospective new team needs to, and as such, there is
no reason to deny moving the application onto discussing terms with
the CRH, with these rights effectively leased out by the FIA to
Bernie Ecclestone back in 2001 and now rest with owner Liberty
Media. Essentially, the FIA takes care of the legal, technical and
regulatory frameworks, which Andretti has passed, while F1 as CRH
takes care of the financial issues – but this is the biggest hurdle
Andretti is facing. Why is F1 so lukewarm towards Andretti? Ever
since the EoI process was opened in January and Andretti
immediately announced its interest, F1 has been rather ambivalent
towards the process. Back at the 2022 Miami Grand Prix, Michael
Andretti was in the paddock and tried to get team bosses to put
their names down to support his then hopes of making it onto the
grid. RacingNews365 understands that only McLaren's Zak Brown and
Alpine's then-Otmar Szafnauer agreed while the consensus from the
others was largely: ‘Go away, come back with a OEM and then we'll
think about it again.' So, Andretti went away and came back with
one of the biggest car manufacturers in General Motors and its
Cadillac brand in tow. Having done what was asked of him, the EoI
process then got underway, with Andretti wisely keeping his powder
dry and not trying to bounce F1 into a decision of the finest
margins. The crux of the argument as to why current teams don't
want an 11th squad on the grid is simply greed. Their argument is
that 1/10th of a smaller pie is a better prospect than 1/11th of a
bigger one, with the fact that they don't believe it to be fair
that they have put the hard yards in to help F1 grow into a
sustainable business model to now reap the rewards while Andretti –
or indeed, any potential new team – could swan in once the boom is
underway and not have the scars to show for it. It is enshrined in
the 2021-2025 Concorde Agreement that prospective new teams must
pay $200 millon for the privilege to join the grid to effectively
offset the loses the incumbent 10 teams would lose. This is known
as the ant-dilution fee which it is understood was set at that mark
for the price Williams was sold to Dorilton Capital in mid-2020,
just as the latest Concorde was being agreed. There has been talk
of tripling this figure to $600 million as a result of the boom in
value of even the ‘smallest' teams and following the model of new
franchises in American sport, with a deal being agreed in May for a
new MLS team in San Diego in the region of $500 million. However,
it must be stressed that even though the teams see themselves as
‘franchises', they are not, with changes to the Concorde requiring
unanimity. The FIA itself is also involved in discussions for the
Agreement with its approval needed before final sign-off. Bluntly,
the current 10 teams are rather happy with F1 being a closed shop,
not open to new business, with time firmly on F1's side, owing to
the fact it has taken most of 2023 for the FIA to merely accept
Andretti's bid. Playing hardball could make 2025 an unrealistic
prospect for the team to join, while 2026 will see the new Concorde
come into force, perhaps with that tripled anti-dilution fee
included. A bad look for F1? One route onto the grid for Andretti
touted in previous months has been to buy an existing team – much
like Audi has down with Sauber, with the team gearing up for 2026.
However, this route has proved fruitless for Andretti, with its own
team being the only realistic way onto the Grand Prix grid. To the
outside world, Andretti has met every requirement for an entry to
the grid, if it had not, the FIA would have sent its application
the same way as it did the others. If F1 was not able, or willing,
to come to terms on a commercial agreement, it would raise some
serious questions. Andretti is not some no-hoper – it is one of the
most recognisable names in global motorsport coming armed with
GM-backing. At a time when F1 has seemingly cracked the American
enigma, to firmly slam the door shut in Andretti's face would take
an almighty marketing campaign to square in the eyes of the fanbase
and casual viewers when money seems to be at the root of why.

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