$700 Million Demanded of American Giants Andretti as F1 Takes a Leaf Out of NHL’s $650 Million Move

The saga of Mario Andretti entering Formula 1 is refusing to end. Every time it looks like he is close to realizing his dream of floating a team in F1, something blocks his path. The former F1 champion announced a partnership with General Motors last week. With it, he looked one step closer to his aim. However, recent developments show just how much resistance he is facing from incumbent teams.

F1 teams, including Mercedes, were always against the idea of having an 11th team. The reason they gave was that it will dilute the prize money shared by them currently. To do away with that worry, they agreed to charge a fee of $200 million from the newcomer, dividing the sum equally among them. However, as the news of Andretti’s partnership with Cadillac broke, dissatisfaction with the 200 million figure emerged.

“As interest in F1 has increased in recent years, team bosses are now asking whether $200m is enough,” BBC’s Andrew Benson recently reported. “One senior insider pointed out that $200m effectively compensates the other teams for just over two years’ loss of prize money, and suggested that a figure closer to $600-700m – representing more like five years – would be more appropriate.”

He added, “Teams are also arguing that $200m significantly undervalues an F1 entry spot. And point to the recent establishment of a new franchise in the North American ice hockey league, the NHL, which cost a group from Seattle a $650m ‘expansion fee’, another name for a dilution fee.”

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The FIA president hasn’t taken well to the recent opposition to Cadillac and Andretti’s entry in the championship.

F1 Group and existing teams lock horns with FIA over the Andretti issue

While the demand for $600-700 million is a new development, the opposition to Andretti’s entry isn’t new. While teams expressed their concerns, F1’s CEO Stefano Domenicali joined the chorus as well. The different line taken by Mohammed Ben Sulayem shows things might not be well between him and other parties on the issue.

He wrote on Twitter, “It is surprising that there has been some adverse reaction to the Cadillac and Andretti news. The FIA has accepted the entries of smaller, successful organizations in recent years. We should be encouraging prospective F1 entries from global manufacturers like GM and thoroughbred races like Andretti and others. Interest from teams in grown markets adds diversity and broadens F1’s appeal.”

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Do you think the Andretti family will give up on the F1 dream? Or will the existing teams give in to the pressure?