It is no mystery that Formula 1 must clearly define its medium-term aims. The Concorde Agreement (which regulates the commercial and financial agreements between teams, F1, and the FIA ) is crucial in this regard. Normally, the agreement focuses on regulation and governance – aspects of which remain confidential.
The seventh Concorde Agreement is currently active, having been signed in 2020 during the first wave of the global pandemic.
At the time, it was decided to postpone F1’s new technical regulations by twelve months. The implementation of a budget cap was also delayed by a year.
Liberty Media, then led by Chase Carey, in collaboration with the teams and the FIA, transformed a time of instability – particularly for the smaller teams – into an opportunity.
Over the decades, we have seen many teams come and go – with the exception of Ferrari.
Generally, this was because competing in F1 often turned into a financial black hole. Currently, Formula 1 is not only healthy in terms of global interest, but it is also a business that has become economically profitable.
It is no coincidence that big names are knocking on the door of Fia and Stefano Domenicali, presenting important projects. However, it seems there is no room for everyone.
Audi chose to enter early by acquiring the historic Sauber team. The German giant gradually began its commitment towards 2026.
However, the German manufacturer is still understood as being slightly behind its rivals – in terms of engine development.
Red Bull decided to join forces with Ford rather than Porsche, rejecting an offer months ago of hundreds of millions of dollars for Alpha Tauri. Just a few years ago, such an offer would have been difficult to conceive.
In any case, Red Bull is working to optimise its connection between AlphaTauri (based in Faenza) and Milton Keynes as much as possible.
Last but not least, not to lose the decision-making power of the Austrian group, trade agreements are being established for 2023.
Now, while the talks over Andretti have been ongoing for some time, it is clear that political posturing has begun.
Nobody wants to reduce their slice of the pie after enduring 18 months of global uncertainties from the pandemic.
The big teams, like Ferrari, are generally not against the entry of a new team.
However, it is clear that an entry fee over the current 200 million dollars will be advocated for. This means a new Concorde agreement is being worked on.
Andretti pushes with all his might to enter F1
For a long time now, the American group has presented a plan to the FIA for entry into F1.
The FIA has done little to hide its approval, confident that Andretti can form a competitive team – despite the scepticism of some detractors.
In legal terms, the FIA can issue Andretti a License to race in F1. They objectively have all the requirements. – provided they are with a Power Unit supplier who has signed up to the 2026 rules.
F1, on the other hand, can formally reject Andretti if they consider their commercial contribution inadequate.
However, this would damage the reputations – directly or indirectly – of all the parties involved.
Still, there is agreement on one thing. The teams who resisted the financial crisis during the Pandemic must be rewarded with a better dilution of income.
On this issue, Gunther Steiner declared before the summer that “we are talking more intensely of the new agreement. The sooner it is closed, the better for everyone.”
F1 and teams earn significant profits. The value of the teams has quintupled.
The FIA may grant Andretti eligibility to participate to demonstrate to the Liberty Media and other teams that F1 is not just a business.
This is why the entry fee cannot be reasonably used as an excuse to block the American team’s efforts to join.
Every scenario is possible. Every actor has legal angles and consequences to consider. Nevertheless, a shared solution would eliminate the possibility of collateral damage.
It is possible to create a new commercial agreement that guarantees Andretti’s entry but for the right price. A timetable could be arranged for the design of a presentable car, which would avoid possible legal battles.
Author: Giuliano Duchessa
Translation: Jaden Diaz-Ndisang
