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Tuesday, October 3, 2023

Liberty Media CEO Sees Potential for American Manufacturer in Formula 1

The current Agreement is valid until 2025 when Andretti wishes to enter

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Aditya Saikrishna
Aditya Saikrishna
I am 21 years old and an avid Motorsports enthusiast.

UNITED KINGDOM: Liberty Media’s CEO, Greg Maffei, expressed his optimism about the possibility of an American manufacturer joining Formula 1. With discussions underway regarding the potential entry of an 11th Formula 1 team, Maffei’s comments have ignited hope for the Andretti Global prospect.

The sport’s governing body, the FIA, and commercial rights holder, Liberty Media, are currently evaluating the 11th team present. The FIA has set a soft deadline of June 30th to inform prospective entrants about the continuation of the entry process.

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Andretti Global, run by the well-known Michael Andretti, is one of the prominent candidates in contention. The team already boasts an impressive portfolio in various racing series, including IndyCar, IMSA, and Formula E. 

However, they have faced resistance from F1 CEO Stefano Domenicali and the existing teams. To strengthen their application, Andretti has secured the support of American original equipment manufacturer (OEM) General Motors, a significant achievement for the team. 

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This move aligns with Red Bull’s recent partnership with Ford for engines starting in 2026.

Andretti’s collaboration with General Motors goes beyond mere badges.

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While targeting a 2025 entry, the team has secured an initial supply deal with Renault until GM Cadillac can become a full-fledged engine manufacturer. 

Eric Warren, GM’s motorsport executive director, emphasized their active involvement in the car’s design and the entire process, highlighting their commitment to more than just engine labelling.

During an interview on the Walker Webcast, Greg Maffei discussed the ongoing efforts to introduce an American entry into Formula 1. 

Maffei hinted at the possibility of General Motors supporting the Andretti bid for the 11th team, along with the potential involvement of other interesting original equipment manufacturers. 

He expressed the desire to welcome more OEMs, particularly American ones, to the sport, seeing it as a positive development.

However, the existing teams are less enthusiastic about adding another outfit to the grid due to the current terms of the Concorde Agreement. The Agreement requires new entrants to pay a $200 million “anti-dilution” entry fee. 

Although this fee provides a short-term financial boost to the current teams, as it is divided equally among them, an 11th team dilutes the prize money fund, affecting each team’s share based on their finishing position in the championship.

The Concorde Agreement continues until 2025, coinciding with Andretti’s desired entry year. 

If Andretti’s application is unsuccessful, the entry fee will likely surge to $600 million, bringing it in line with valuations of prominent franchises in other sports like the NHL. 

Additionally, fitting an 11th team into existing pitlanes poses logistical challenges for the FIA and Liberty Media.

Maffei acknowledged the difficulties in accommodating an additional team in certain pitlane areas. 

However, new circuit builds, such as the one in Las Vegas, will not face this problem, indicating Liberty Media’s direction for future developments.

The prospect of an 11th team in Formula 1 is not without controversy, as current groups are concerned about profit sharing and dilution. 

Maffei acknowledged the teams’ apprehension and discussed the franchise fee, which the FIA had introduced to create value for the teams. While Maffei believes the teams can reach an agreement under the right circumstances, it will require extensive negotiations.

The anticipation surrounding an American manufacturer’s potential entry into Formula 1 brings excitement and intrigue to the sport. Fans and stakeholders eagerly await further developments, hoping for a positive outcome to enrich the racing series both on and off the track.

Also Read: Fernando Alonso’s Overtaking Skills Questioned: F1 Pundit Favours Max Verstappen in Potential Showdown

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