Andretti’s bid to join the Formula 1 grid has hit a significant roadblock after being turned down by Formula One Management, despite securing approval from the FIA. However, Zak Brown, CEO of McLaren Racing, has suggested a bold path forward: buying an existing team.
FIA President Mohammed Ben Sulayem recently reversed his stance, advising prospective F1 entrants like Andretti to purchase an existing team. This marks a shift from earlier in 2023 when the FIA was looking to expand the grid and Andretti was the only team to meet their criteria.
Brown indicated that while no team is openly for sale, there’s always a price point that could make a team consider selling. As he put it, “There doesn’t seem to be anyone who wants to sell at the moment, that being said, but that just means the offer needs to be bigger. There’s always a number, but no-one has a ‘for sale’ sign, from what I can see, on their front door.”
The cost for Andretti to join the grid as a new team would involve paying a $200 million anti-dilution fee to the existing teams. However, Ben Sulayem hinted that the booming success of Formula 1 could drive that price even higher for any new teams.
Brown elaborated on the current profitable state of F1 teams under the management of Liberty Media. “Historically in Formula 1, it was enter, show up and the sport didn’t care if you didn’t make it halfway through a year,” he explained. He reminisced about times when teams like Lola would go bust after just a few races. “I think Liberty is now in a position where you’ve got 10 very healthy teams, so they’re going to hold an 11th and 12th team to the extreme highest criteria and extreme due diligence, which I think is right.”
He emphasized that unlike in the past, where a team was almost always on the brink of bankruptcy, more than half the current grid is profitable. “And these franchise values, I think Williams was bought for $150 million, I don’t think five years later you can buy that team for less than a billion and a half. So the value creation has been immense.”
The high cost of buying an existing team is a clear obstacle, but it’s a path Andretti might have to consider if they are serious about joining the Formula 1 grid.
With the profitability and stability of current F1 teams, Andretti’s quest to join the grid by acquiring an existing team will undoubtedly be costly. However, Zak Brown’s insight suggests that despite the absence of ‘for sale’ signs, there’s always a price that might make it possible.
Source: Planetf1
