F1 should drop revenue for 11th entry, not teams – Horner
Formula 1 owner Liberty Media would have to cut its revenue share if the grid exceeds 10 teams to protect existing entries, believes Red Bull boss Christian Horner.
There are several major entities interested in entering F1 in some capacity in the next few years, including Porsche, Audi and the Andretti organisation.
However, F1 went into closed shop to increase the so-called franchise value of the existing 10 teams, so all interested parties were encouraged to partner up or buy a team already on the grid.
The FIA even said in February, following Andretti’s public expression of interest in a 2024 entry, that it was unable to consider a new entry.
Andretti is determined to push ahead with his project, though, and over the weekend Liberty Media President Greg Maffei appeared to open the door to growth beyond 10 teams.
“Naturally, for the current signatories to the Concorde agreement, it makes perfect sense to say that the 10 teams or 10 franchises have intrinsic value and you dilute that by increasing the number,” Horner said when interviewed by The Race. .
“Theoretically it should be a freedom issue to solve if they want new teams to come in. And to increase the number beyond 10, then fiscally it will always come down to a question of ‘how does that affect there the distribution of the price fund?’.
“Money is ultimately going to be a big factor. I see it as a matter really for the promoter that if they want more teams they are obviously going to have to dilute their share of the fund.
“Because it would be unfair to expect other teams to pay for additional new entrants to arrive, indirectly.
“That will always be the conflict you will have.
“I think it’s great that there is interest from OEMs and from a brand and a team like Andretti. He’s a big name. It would be better if Mario gets back behind the wheel!
“But I think it’s something really Liberty, it’s their business model that they have to work out for the future.”
The Concorde agreement, which sets out the commercial terms under which the teams operate, provides for an anti-dilution fund of $200 million – this would be paid for by any new entry and spread across the current 10 teams.
This would effectively provide short-term insurance against teams having to share the same F1 revenue pot with an additional entry.
However, as this is a short-term protection, F1 stakeholders all seem to agree that any new entry should do more than just pay these fees – they should argue that they would add additional value that would increase long-term revenue. .
“You have to look longer term,” Horner said when asked if the anti-dilution fee was indeed unnecessary.
“This is the first time in memory that we have 10 healthy franchises, 10 healthy teams.
“The last two teams would always be fighting to survive, whereas now they’re in a position where they can actually plan for the future, they can look ahead rather than just being in the present.
“I think the $200 million is a lot of money, but in this industry when you divide it by participants, it doesn’t go very far.
“And that’s a one-off, it’s not $200 million every year.”
Andretti’s push to join a new team comes after the failed takeover of the Sauber organization last year.
Sauber, which currently operates as Alfa Romeo in F1, is now seen as a target for Audi.
Sauber CEO and Alfa Romeo F1 team boss Frédéric Vasseur said: “If we have a new team coming in, with mega added value for the championship, that could make sense.
“But we don’t need to welcome someone new, to endanger two or three teams on the grid.
“In the Concorde agreement, we touch on these points, and ultimately it would be up to FOM to decide what they want to do.
“I think we have enough space to find partnerships with the existing teams on the grid, more than to welcome another one.
Haas was the last new team to enter F1, in 2016. It is the only American F1 team, and another that Andretti had previously wanted to buy.
Team principal Guenther Steiner said: “We currently have 10 stable teams, which for a long time was not possible in F1. Or was not happening in F1.
“Now, for five years, everything is quite stable and very good.
“Why would the 10 teams say we’re diluting our value to bring in someone new? What’s in it for us?
“We have been here a long time. If FOM wants to hand out more money or something that’s another discussion.
“But having more teams, more does not mean being better.”