If you want to own a Formula One team, get that paperwork in today.
The Switzerland-based governing body of the race circuit, the Fédération Internationale de l’Automobile (FIA), has set Feb. 15 as the date preliminary applications are due for teams wishing to gain entry into the league. The first application is a straightforward expression of interest detailing who is applying, accompanied by a non-refundable deposit of $20,000. Full applications and the balance of the $300,000 application fee are due by the end of April, with the FIA making its decision on any expansion by the end of June.
How many teams FIA will add is a matter of speculation. The organization, which didn’t respond to a request for comment, hasn’t even publicly committed to adding any teams to the 10 that currently race. However, people familiar with the process, who asked not to be named because they’re not authorized to speak on behalf of the organization, suggest that the FIA wouldn’t entertain expressions of interest unless it felt confident of finding at least one worthy applicant.
Plus, Liberty Media Corp., which owns the commercial rights to F1 under a 100-year contract with the FIA, has generally expressed a belief that popularizing the sport will probably require more teams, not fewer, especially as it seeks to expand the league’s fan base beyond its western European core. “There are a lot of people who would like us to do it, most of them want to buy in,” said Liberty Media CEO Greg Maffei, at a Miami conference last year. Expanding the roster would add to the momentum F1 has seen in recent years thanks to the hit Netflix Series Formula One: Drive to Survive, the addition of a race in Miami last spring, the second in the U.S., and another coming this November in Las Vegas. A representative for Liberty Media didn’t respond to requests for comment.
The highest profile bid is coming from Michael Andretti and General Motors. Andretti Global and GM announced last month they have teamed up to field an F1 entry. “I feel very strongly that we are suited to be a new team for Formula One and can bring value to the series and our partners, and excitement for the fans,” Andretti said in a press release. Since 2017, Cadillac has had a car in the prototype circuit of the IMSA, which is governed by FIA. Andretti’s team would be the second American outfit after Haas Formula LLC, owned by industrial equipment maker and NASCAR team owner Gene Haas. A representative at Andretti didn’t respond to a request for comment.
A second known bidder is Panthera Team Asia, an organization co-founded by London-based Benjamin Durand, who has told F1 industry publications that its application will emphasize expanding F1’s appeal into Asia, where it would be the first team based in the region, though its specific location is to be determined. Durand’s group sees Asia, especially China, as the next logical focus for F1 after its current emphasis on cementing the circuit in the U.S. The executive confirmed in a message the group is applying to F1, but declined to comment further. Durand has managed racing teams in France, Monaco and the U.S.
Andretti and Durand appear to be the only two publicly proclaimed bidders, and since a non-disclosure agreement governs applications, it’s unlikely any more will leak. But it is believed there are other interested parties that could produce a legitimate wildcard contender, though there are few public details—a potential advantage since the FIA, befitting its Swiss roots, has been critical of public jockeying for a team.
“There’s not only Michael Andretti,” FIA chief Stefano Domenicali said to Sky Sports in early 2022. “He is maybe the most vocal one.” And he was even more pointed in his criticism of Andretti’s open campaigning in an August interview with Associated Press: “… we will listen not only to Andretti but to others that are respecting the silence on trying to be more productive on proving who they are and respecting the protocol.”
The prize for an expansion team is entry into a small, highly valuable club. Valuations among the 10 teams can vary widely, but American investors bought a minority stake in McLaren Racing at an $800 million valuation two years ago. Even the worst performing F1 team is worth $400 million, according to Maffei. That’s thanks in large part to steps Liberty Media has taken since gaining ownership of F1 in 2017 for $4.6 billion. Primarily, Liberty has capped how much teams can spend in a season, currently $154.7 million. That’s a dramatic drop from the $450 million the circuit’s largest teams would spend in a year. Liberty’s efforts have made F1, not including the independently owned teams, worth nearly $15 billion, according to the tracking stock’s market capitalization. Liberty’s progress also means more cash goes back to teams. In 2021, Liberty paid out $1.07 billion to competitors; in the first three quarters of 2022, payments were up more than 20% year-over-year, to $838 million. (Liberty fourth quarter results will be announced March 1).
Those payments are, however, unevenly distributed, with Ferrari receiving an annual stipend just for participating, and the rest divvied up among all teams depending on victories. Still, Liberty has made the payment system less biased toward the old guard, and expansion will only continue the shift of F1 away from a league where only two or three teams dominate. That has some teams vocally opposed to expansion, but there’s a consolation prize: New teams need to pay a $200 million entry fee to the existing 10.