The teams are demanding at least $600 million in registration fees for new entrants
Four months before the FIA's verdict on whether an 11th team will make its debut in F1, Andretti Autosport will likely have to reconsider its business plan with General Motors.
A different context
The FIA has launched at the beginning of this year the selection process to host new teams in F1 for 2025, 2026 or 2027. Three potential teams have reportedly expressed interest, with Andretti being joined by HitechGP and Panthera Asia. However, the VW Group could also submit an application with Porsche.
Agreed as part of the Concord Agreements in 2020, during the Covid time, for the seasons from 2021 to 2025, registration fees were in place to guarantee a $20 million payment to the 10 current teams for any new entrant.
This was supposed to allow the latter to compensate for the loss of income if a team had arrived in 2022 and taken a share of the cake for the last four seasons of the established Concorde Agreements.
Since the end of the pandemic, Formula 1 has become much more popular, partly because of the interest generated by the series “Drive to Survive,” which has just released its fifth season, and of course, due to cost capping which has reduced expenses and increased teams’ revenues.
Their values have therefore been significantly enhanced and they are wary of the potential impact of an 11th competitor, and would like to review the registration fees, so that they are raised to at least $600 million.
What options for Andretti?
In the past, the former Formula 1 driver, who had attempted to buy an existing team such as Sauber in 1993, without success. Michael Andretti has therefore partnered with Cadillac and has stated his intention to bring the required 200 million dollars to the table for an entry as the 11th team. However, the possible increase in costs to enter F1 will likely force the American to reconsider these plans.
Andretti wants to join Formula 1 in 2025, because starting in 2026, the new promulgated Concorde Agreements will propose a much higher entry fee.
However, the existing teams also wish to modify the fees related to 2025, even though the bidding process has already started.
In order for this to be possible, it is necessary for all teams and the organization of Formula 1 to unanimously agree to change the fees, and it appears that such a decision is about to be made.
And as luck would have it, at the same time, the sale of the AlphaTauri team could be announced by Red Bull’s executives.
Andretti, who had already inquired about acquiring the team, could once again be interested, even if the price set by the Austrians would probably be more substantial than the mentioned 600 million dollars.
In the event that Andretti were to acquire AlphaTauri, they would have a strong foundation with the Faenza factory and an aerodynamics department in Bicester. This would also save them from having to compensate rival teams.
