Cadillac racing in F1 with Andretti

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FIA APPROVES ANDRETTI FORMULA RACING APPLICATION AFTER RIGOROUS ANALYSIS

https://www.fia.com/news/fia-approves-a ... s-analysis

Ball is in FOM's court now

[hairy_scotsman]

The FIA has called FOM and the teams' bluff, forcing their hand, while covering their own asses and leaving FOM twisting in the wind with no options that they really like very much ... and it's beautiful, imho. I think in the end the teams and F1 will realize the best option is to just put on their big boy pants and let Andretti in. They won't like it ... but they don't have to like it.

They have indeed put the ball squarely in FOM and the teams' court, as I've predicted they would since the beginning. FOM and the teams will have to live with the consequences of whatever decision they make.

With this official move from the FIA, if FOM and the teams do reject Andretti, now they'll have to do it all on their own, without the FIA's help, and take the heat all on their own as well. Everyone will know precisely who's to blame.

[FW17]

Great news that Andretti is in. People at the races will be treated to 11 teams.

Now I guess it is a question if we see them on TV.

[CHT]

Great news that Andretti is in. People at the races will be treated to 11 teams.

Now I guess it is a question if we see them on TV.

One more team will mean less to go around since the size of the pie will likely remain the same. My guess is that after 2 seasons, some team will be sold or change ownership.

[kptaylor]

So which drivers do they target for 2026? I definitely see the need for an experienced driver, so if AM drops I'd watch out for Alonso taking big cash to help them develop their car/team in year 1. Will be like Haas and have pressure to sign a US driver for seat #2...

[Sevach]

Great news that Andretti is in. People at the races will be treated to 11 teams.

Now I guess it is a question if we see them on TV.

One more team will mean less to go around since the size of the pie will likely remain the same. My guess is that after 2 seasons, some team will be sold or change ownership.

The cost as of now, if Andretti doesn't bring any extra revenue, has been calculated in 11 mi a year for each team.
Andretti will pay 600 to FOM.

They should still be easily in the blue.

[hairy_scotsman]

Seems like more and more reasons are coming to light indicating that saying "No" to Andretti might be a bad idea for FOM. They've already been approved by the FIA, and the entry fee is right there in black and white, as part of a process that's been laid out and agreed to by the teams. The teams and Liberty have effectively undermined any argument that they'd suffer financially from an additional team. If they try to deny entry to an entrant that's been approved by the FIA and has the money for the already agreed-upon dilution fee, they might be setting themselves up for some ... eh ... difficulties.

And frankly, given their stated desire to conquer the US market and grow the sport/business, it's never made a bit of sense to me that FOM/Liberty would ever say no to a team like Andretti, esp in a partnership with a manufacturer like GM. I get the feeling that a lot of what we've been hearing on the FOM side is really just lip service to the teams, but when it comes down to the nut-cuttin', they're gonna do what they know is actually right for their bottom line.

[FW17]

The issue is simple......

Chase Carey was brilliant negotiator, He got teams signed to concord agreement with a budget cap, Ferrari bonus gone, column 1 and 2 gone, championship bonus gone. All while still not incurring any loss to FOM share of the revenue pie.

Now they have Stefano Domenicali. The last negotiations he handled ended up with FOTA getting dismantled, Ferrari loosing the test track and signing to an turbo engine formula with a development freeze from day 1.

Stefano has no ability to negotiate with the teams, who will want and are in a position to take more than what they are being offered now. He feels the only way to get this across the line is to cozy up to the team owners and try to paint a picture as teams first and FOM/Teams are the best of friends. No way is he going to get the 2026 agreement signed without FOM loosing a significant portion of revenue. Andretti is just mixed up in the middle of this, with Stefano having no option but to brown nose the teams.

Stefano being cozy with with the team principals is to make himself seem indispensable with this misguided unity message he has always been peddling to the US HQ. But sooner or later Greg Maffei is going to step in to negotiate the contract directly with the teams with Stefano causing more harm to the FOM than they could have ever imagined.

[Polite]

Domenicali didnt negotiate for Ferrari: Montezzemolo negotiated for the PU era and before for the test ban.

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[PlatinumZealot]

In the days of Bernie and Max the current teams would shut up and cpmply. If an extra team is coming and you reward money is affected for a couple years then so be it.

[Cs98]

The issue is simple......

Chase Carey was brilliant negotiator, He got teams signed to concord agreement with a budget cap, Ferrari bonus gone, column 1 and 2 gone, championship bonus gone. All while still not incurring any loss to FOM share of the revenue pie.

Now they have Stefano Domenicali. The last negotiations he handled ended up with FOTA getting dismantled, Ferrari loosing the test track and signing to an turbo engine formula with a development freeze from day 1.

Stefano has no ability to negotiate with the teams, who will want and are in a position to take more than what they are being offered now. He feels the only way to get this across the line is to cozy up to the team owners and try to paint a picture as teams first and FOM/Teams are the best of friends. No way is he going to get the 2026 agreement signed without FOM loosing a significant portion of revenue. Andretti is just mixed up in the middle of this, with Stefano having no option but to brown nose the teams.

Stefano being cozy with with the team principals is to make himself seem indispensable with this misguided unity message he has always been peddling to the US HQ. But sooner or later Greg Maffei is going to step in to negotiate the contract directly with the teams with Stefano causing more harm to the FOM than they could have ever imagined.

Because all those things Chase Carey negotiated were actually beneficial for the teams on the whole. It made them much easier to fund and in some cases profitable, that's not a difficult pitch for a decent negotiator. Domenicale on the other hand is being asked to cut their revenue share whilst FOM keeps its share as is. They'll get some compensation for it initially, but it's probably going to be a losing proposition in the long run. And the idea that Andretti's presence will increase revenue is hopeful at best. There will be some hype initially but it will die down, and 2-3 years after they join it will be business as usual, but with 11 teams sharing the pie instead of 10. And those 11 teams will undoubtedly be very demanding when the next concorde agreement is to be negotiated. In the end the revenue of the sport will not be affected by the nationality of one team, but rather the quality of the competition. I'm not convinced Andretti has the resource, know how, or even the ambition to actually become a contender. They'll get in and be content with their billion dollar valuation and annual revenue from F1 and sponsors. Americans will not embrace their mediocrity, and Andretti is anyways mostly unknown to the demographics that F1 is targetting in the US.

[FW17]

The issue is simple......

Chase Carey was brilliant negotiator, He got teams signed to concord agreement with a budget cap, Ferrari bonus gone, column 1 and 2 gone, championship bonus gone. All while still not incurring any loss to FOM share of the revenue pie.

Now they have Stefano Domenicali. The last negotiations he handled ended up with FOTA getting dismantled, Ferrari loosing the test track and signing to an turbo engine formula with a development freeze from day 1.

Stefano has no ability to negotiate with the teams, who will want and are in a position to take more than what they are being offered now. He feels the only way to get this across the line is to cozy up to the team owners and try to paint a picture as teams first and FOM/Teams are the best of friends. No way is he going to get the 2026 agreement signed without FOM loosing a significant portion of revenue. Andretti is just mixed up in the middle of this, with Stefano having no option but to brown nose the teams.

Stefano being cozy with with the team principals is to make himself seem indispensable with this misguided unity message he has always been peddling to the US HQ. But sooner or later Greg Maffei is going to step in to negotiate the contract directly with the teams with Stefano causing more harm to the FOM than they could have ever imagined.

Because all those things Chase Carey negotiated were actually beneficial for the teams on the whole. It made them much easier to fund and in some cases profitable, that's not a difficult pitch for a decent negotiator. Domenicale on the other hand is being asked to cut their revenue share whilst FOM keeps its share as is. They'll get some compensation for it initially, but it's probably going to be a losing proposition in the long run. And the idea that Andretti's presence will increase revenue is hopeful at best. There will be some hype initially but it will die down, and 2-3 years after they join it will be business as usual, but with 11 teams sharing the pie instead of 10. And those 11 teams will undoubtedly be very demanding when the next concorde agreement is to be negotiated. In the end the revenue of the sport will not be affected by the nationality of one team, but rather the quality of the competition. I'm not convinced Andretti has the resource, know how, or even the ambition to actually become a contender. They'll get in and be content with their billion dollar valuation and annual revenue from F1 and sponsors. Americans will not embrace their mediocrity, and Andretti is anyways mostly unknown to the demographics that F1 is targetting in the US.

I disagree. Chase created all those points of negotiations with the teams.

There was no reason for the top 3 teams (Ferrari, Mercedes and Red Bull) to agree to a budget cap when they had no issues with their cashflows, or for them to give up on their championship bonuses.

These were well handled by Chase. On the other hand Domenicali has not put forward anything that would be a point of discussion towards signing the next deal. The only thing we have heard is him unloading on any new team proposal and talking about franchise.

Anyway when Cadillac joins, and if they finish last for the next 5 years, the teams would loose about 276 million (4% of revenue with a base of 1.15 bn and 8% yearly teams price money growth). If they finish 6th every year teams would loose 613 million. If they progress steadily from last to 6th over the 5 years, teams loose 421 mn. From all of this the 200 mn dilution fee need to be deducted.

[Cs98]

The issue is simple......

Chase Carey was brilliant negotiator, He got teams signed to concord agreement with a budget cap, Ferrari bonus gone, column 1 and 2 gone, championship bonus gone. All while still not incurring any loss to FOM share of the revenue pie.

Now they have Stefano Domenicali. The last negotiations he handled ended up with FOTA getting dismantled, Ferrari loosing the test track and signing to an turbo engine formula with a development freeze from day 1.

Stefano has no ability to negotiate with the teams, who will want and are in a position to take more than what they are being offered now. He feels the only way to get this across the line is to cozy up to the team owners and try to paint a picture as teams first and FOM/Teams are the best of friends. No way is he going to get the 2026 agreement signed without FOM loosing a significant portion of revenue. Andretti is just mixed up in the middle of this, with Stefano having no option but to brown nose the teams.

Stefano being cozy with with the team principals is to make himself seem indispensable with this misguided unity message he has always been peddling to the US HQ. But sooner or later Greg Maffei is going to step in to negotiate the contract directly with the teams with Stefano causing more harm to the FOM than they could have ever imagined.

Because all those things Chase Carey negotiated were actually beneficial for the teams on the whole. It made them much easier to fund and in some cases profitable, that's not a difficult pitch for a decent negotiator. Domenicale on the other hand is being asked to cut their revenue share whilst FOM keeps its share as is. They'll get some compensation for it initially, but it's probably going to be a losing proposition in the long run. And the idea that Andretti's presence will increase revenue is hopeful at best. There will be some hype initially but it will die down, and 2-3 years after they join it will be business as usual, but with 11 teams sharing the pie instead of 10. And those 11 teams will undoubtedly be very demanding when the next concorde agreement is to be negotiated. In the end the revenue of the sport will not be affected by the nationality of one team, but rather the quality of the competition. I'm not convinced Andretti has the resource, know how, or even the ambition to actually become a contender. They'll get in and be content with their billion dollar valuation and annual revenue from F1 and sponsors. Americans will not embrace their mediocrity, and Andretti is anyways mostly unknown to the demographics that F1 is targetting in the US.

I disagree. Chase created all those points of negotiations with the teams.

There was no reason for the top 3 teams (Ferrari, Mercedes and Red Bull) to agree to a budget cap when they had no issues with their cashflows, or for them to give up on their championship bonuses.

These were well handled by Chase. On the other hand Domenicali has not put forward anything that would be a point of discussion towards signing the next deal. The only thing we have heard is him unloading on any new team proposal and talking about franchise.

Anyway when Cadillac joins, and if they finish last for the next 5 years, the teams would loose about 276 million (4% of revenue with a base of 1.15 bn and 8% yearly teams price money growth). If they finish 6th every year teams would loose 613 million. If they progress steadily from last to 6th over the 5 years, teams loose 421 mn. From all of this the 200 mn dilution fee need to be deducted.

The reason is called profitability. Even if it was sustainable for them to spend all of that money it was wasteful. No extra exposure but a lot of extra cost, the budget cap put an end to that and saved them a lot of money.

[chrisc90]

Interesting piece from Vowles on Sky about how he is partially against Andretti joining F1. Its because Williams are running at a loss (20Million in 2021? and multiplied in 2022/23), but because the sponsorships and dilution would mean they are running at even more of a loss.

Seems like a team issue rather than the sporting issues. Sky really gave him some tough questions on that one.