It’s been no secret that the F1 teams are not interested in letting Andretti on the grid, or at least 9 out of 10 of them. However it now appears like this all could be a power play for something that F1 teams have been obsessed with for decades. Money.
Dilution fund
Unless all 10 teams agree to wave the current $200 million entry fee, any new team joining the grid would need to pay this fee to secure a place on the grid. This fee would then be split among the current 10 teams. This was agreed upon in a document called the Concorde Agreement that all 10 teams signed in 2020, essentially agreeing to stick around for another 5 years.
GET ONE MONTH FREE AND LEARN HOW TO BUILD YOUR OWN WEBSITE HERE
The idea of this fund was to make up for the prize money that teams would lose by a new team coming in and adding an 11th share to the pot of money paid out.
As a side note, that money paid out is made up of a percentage of the profits that the F1 commercial rights holder makes, who is currently Liberty Media.
The Problem
The issue now though, is that given the significant growth the F1 since the Cost Cap was introduced and after a bigger play into the American market, this fund would only make up for at most two years of losses from the dilution.
Now then the teams are asking for that dilution fund to be re-written as anywhere from $500-700 million. This would allow the teams to offset roughly 5 years worth of losses.
Whether this is just a tactic to make the stakes to high for Andretti is yet to be seen, but one question it brings to my mind, is why are the teams so short sighted if this is a genuine concern.
Surely they could’ve argued for a growth based increase in 2020?
